TaxTMI 
TaxTMI 
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2025 (8) TMI 1302
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....passed by the National Company Law Tribunal, Chandigarh Bench ('Adjudicating Authority') in I.A. No. 792 of 2023 in C.P.(IB) No. 94/CHD/HRY/2020). 2. Mr. Satyendra Sharma, who is the Resolution Professional of Arkin Creations Pvt. Ltd. is the Respondent No. 1 herein. 3. The Corporate Insolvency Resolution Process ("CIRP") was initiated against the Corporate Debtor, Arkin Creations Private Limited, on 07.10.2022 vide order in CP (IB) No. 94/Chd/Hry/2020. 4. The Appellant submitted that, prior to CIRP, the Corporate Debtor initiated arbitration against the Appellant under the Micro, Small and Medium Enterprises Development Act, 2006 ("MSME Act, 2006") for alleged non-payment towards supply of goods, claiming a principal amount of Rs. 21,50,332 plus interest. The Appellant contended that the arbitration was referred to Shri P.P. Chhabra as Sole Arbitrator on 17.06.2016 by the Haryana Micro and Small Enterprises Facilitation Council ("HMSEFC"), as the Corporate Debtor was registered as a small-scale industry under the MSME Act, 2006. 5. The Appellant submitted that the arbitration proceeded ex-parte against the Appellant's erstwhile company, JSL Architecture Limited, culminating in....
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....ted that the prayers in IA No. 152/2023, allowed by the impugned order, do not fall within Section 60(5) of the Code, as recovery of Rs. 21,50,332 plus interest does not constitute a question "arising out of" or "in relation to" the Corporate Debtor's CIRP. 11. The Appellant submitted that the Adjudicating Authority failed to recognize that the Arbitral Award dated 23.01.2017 is unenforceable under Section 36 of the Arbitration and Conciliation Act, 1996, as no execution proceedings were initiated by the Corporate Debtor pre-CIRP. The Appellant submitted that the demand notice dated 18.01.2023 under Section 60(5) of the Code is invalid, as the claim for Rs. 21,50,332 plus interest does not "arise out of" the CIRP but stems from a pre-CIRP award. 12. The Appellant submitted that the ex-parte nature of the Arbitral Award dated 23.01.2017 is invalid due to lack of proper service of notices on JSL Architecture Limited's registered office, violating procedural fairness. The Appellant submitted that no notice under Section 21 of the Arbitration and Conciliation Act, 1996, was served, rendering the proceedings void ab initio. 13. The Appellant submitted that the Arbitral Award dated 23....
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....rt's judgment dated 04.10.2007 in U.P. State Sugar Corporation Vs. Jain Construction Co. (2007) 8 SCC 601 holds that limitation for execution starts from the date the award becomes enforceable. 20. The Respondent No. 1 submitted that the NCLAT's judgment dated 14.02.2023 in MBL Infrastructures Ltd. Vs. Manish Kumar Bhagat (Company Appeal (AT) (Insolvency) No. 769 of 2020) confirms that awards are enforceable within 12 years under Article 136. Further, the Respondent No. 1 submitted that the Hon'ble Supreme Court's judgment dated 16.09.2020 in Govt. of India Vs. Vedanta Ltd. (2020) 10 SCC 1 affirms that limitation for execution commences when the award is final and enforceable. 21. The Respondent No. 1 submitted that limitation for enforcement starts from the date the award becomes enforceable, not from knowledge or receipt. The Respondent No. 1 contended that the Appellant's argument of first receiving the award via demand notice dated 18.01.2023 is irrelevant, as limitation runs from the award date of 23.01.2017. it is further submitted by the Respondent No. 1 that the Hon'ble Supreme Court's judgment dated 13.09.2019 in P. Radha Bai Vs. P. Ashok Kumar (2019) 13 SCC 445 holds th....
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....ro and Small Enterprises Facilitation Council (Writ - C No. 19385 of 2020) supports that non-compliance does not invalidate awards. 26. Concluding his arguments, the Respondent No.1 requested this Appellate Tribunal to dismiss this appeal with exemplary cost. Findings 27. A short point in the present appeal is regarding power of the Adjudicating Authority to deal with claims of the Corporate Debtor under CIRP against the Appellant arising out of an Arbitral Award. The Arbitral Award is amounting to Rs. 44,99,365/- comprising the principal amount of Rs. 21,50,332/- and interest of Rs. 23,49,032/-. It is the case of the Appellant that he received the Arbitral Award for the first time along with demand notice dated 18.01.2023 sent by the Respondent No.1 which he disputed. The Appellant has also taken several legal/ technical grounds in his defence including that Arbitral Award dated 23.01.2017 was merely a report on finding referred to Arbitrations and further the sole arbitrator did not submit it report to HMSEFC, thus, the alleged Arbitral Award is not binding. 28. The Appellant has also taken a plea that Arbitral Award is covered by Arbitration and Reconciliation Act, 1996 and ....
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.... any question of law or facts, arising out of or in relation to the insolvency resolution or liquidation proceedings of the corporate debtor or corporate person under this Code. " ( Emphasis Supplied ) 33. From above reading of Section 60(5) of the Code, it becomes clear that once the Adjudicating Authority is required to deal any matter brought before it, which is within the domain of the Code, no other forum have any jurisdiction to entertain such proceedings. Taking into this consideration, we find that the Adjudicating Authority was well within rights to entertain the relevant IA filed by the Respondent No. 1 regarding enforcing the Arbitral Award, we noted earlier. 34. In this connection, we would like to refer to Section 238 of the Code which clearly mandate that in situation where the Code is in conflict with any other prevailing law, the code will prevail and override other laws. In this connection, we note that there are several judgments supporting this ratio. We will refer to this Appellate Tribunal's earlier judgement in the matter of K.S. Oils Limited. Vs. The State Trade Corporation of India Limited and Anr. passed in Comp. App. (AT) (Ins.) No. 284 of 2017 where s....