TaxTMI 
TaxTMI 
2026 (3) TMI 1254
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....sal of the present appeal, are as follows: a. Respondent floated an e-tender on 15th February, 2017, for manufacture, procurement, installation, etc. of grid connected rooftop solar PV power plant etc. at various locations of West Bengal. b. Appellant, which is an MSME engaged in the business of supply, installation and commissioning of solar PV power plants, successfully participated in the bid process, whereupon a Letter of Award (LOA) dated 12th May, 2017 was issued in its favour. c. More than three years later, on 17th September, 2020 to be precise, the appellant was admitted into Corporate Insolvency Resolution Process [CIRP] under the Insolvency and Bankruptcy Code, 2016 [IBC]. d. Due to certain disputes relating to performance of the contract, the appellant, through the resolution professional, invoked the arbitration clause vide a notice dated 31st December, 2021. A statement of claim was filed on 17th January, 2023 and the respondent filed its statement of defence as well as a counterclaim on 18th April and 12th May, 2023, respectively. e. It is apposite to mention here that the claim raised in the counterclaim was never pursued....
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....ng exception to the impugned order, Mr. Abhijit Sinha, learned senior counsel for the appellant argued that since the respondent failed to raise its claim before the Resolution Professional within the prescribed time, it could not subsequently assert the same by way of counterclaim in the arbitration proceedings, as the claim stands barred upon approval of the resolution plan. He further contended that the Tribunal and the Single Judge rightly ruled that, after such approval, the respondent cannot maintain any counterclaim in respect of a claim that was not submitted to the Resolution Professional prior thereto. Allowing such a course, it was submitted, would defeat the 'clean slate' principle. According to him, the resolution plan represents the culmination of the CIRP; once it is approved by the Committee of Creditors (CoC) and the adjudicating authority, it completes the CIRP and extinguishes all claims against the corporate debtor as of that date. 5. On the other hand, Mr. Jishnu Choudhury, learned senior counsel for the respondent while supporting the reasoning set out in the impugned order also submitted that the 'clean slate' principle should not be applied so rigidly as ....
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....r this sub-section, satisfy that the resolution plan has provisions for its effective implementation... (emphasis ours) 11. The terms of Section 31(1) are clear. The effect of the said provision is that the plan's terms are binding, as they stand, and it attaches finality to the resolution plan. Terms of the plan are to be read strictly, given the binding nature and extinguishment of claims not part of it which aligns with the resolution objective of the IBC. 12. In Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. (2021) 9 SCC 657, this Court speaking through the Chief Justice reiterated this principle thus: 102.1. That once a resolution plan is duly approved by the adjudicating authority under sub-section (1) of Section 31, the claims as provided in the resolution plan shall stand frozen and will be binding on the corporate debtor and its employees, members, creditors, including the Central Government, any State Government or any local authority, guarantors and other stakeholders. On the date of approval of resolution plan by the adjudicating authority, all such claims, which are not a part of resolution plan, shall stand e....
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....aim in view of the moratorium and such objection stood rejected by the Tribunal on 22nd December, 2023. The resolution plan, which we propose to quote hereafter, does reflect exclusion of a counterclaim in connection with any arbitration proceedings. The language in which the relevant paragraph is couched gives rise to an impression that the Resolution Professional, despite being aware of the counterclaim raised by the respondent in the arbitration proceedings (initiated by the Resolution Professional itself), did not take the same into consideration while formulating the resolution plan and getting the same approved by the CoC and the adjudicating authority. These facts, in our opinion, though not decisive in any manner prompt us to slightly drift towards considering whether some equity in favour of the respondent does accrue or not. 18. For this purpose, we need to take note of the definition of the term "claim" as provided under Section 3(6) of IBC. It reads: (6) "claim" means- (a) a right to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured; (b) right to remedy for breach ....
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....ssly covered, an intention to exclude it would ordinarily be inferred by application of the maxim expressio unius est exclusio alterius. 24. In the light of the alternative plea of the respondent, as noted above, vis-à-vis the contents of paragraph 12.4.1 of the resolution plan, we are inclined to take a path different from the one taken by the Single Judge and the Division Bench. 25. Upon a cumulative consideration of all relevant factors, we hold that the respondent, although not entitled to independently pursue its claim by way of counterclaim post approval of the resolution plan, ought to be permitted to raise the plea of set-off at least by way of defence. It is ordered accordingly. 26. We, however, clarify that the respondent shall not derive any positive or affirmative relief on the basis of the said defence and may only defend itself against the claim raised by the appellant. In other words, the respondent may rely upon the same in defence, to the extent necessary to prevent the appellant from succeeding in the arbitration proceedings either entirely or in part. 27. We also clarify as follows: a. In the event the amount claimed in the counterclai....