TaxTMI 
TaxTMI 
2026 (7) TMI 663
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.... is stated that on 03.09.2012, Haryana PWD (B&R) Sonipat Circle, issued a Letter of award bearing Memo No.4107 for the work titled "Construction of four lane ROB at Rai Nahra Bahadurgarh Road level crossing No. 21 on Delhi-Ambala Railway line in Sonipat Distt". Thereafter, vide Memo No.5185 dated 28.09.2012, instructions were issued to commence the work, fixing 12.10.2012 as the date of commencement and 11.10.2014 as the stipulated date of completion. iv. It is further stated that a formal agreement was executed between the Petitioner and Haryana PWD (B&R) Sonipat Circle on 09.10.2012, for the aforesaid work. v. Subsequently, the Petitioner issued Work Order No. MBL/ND/1728 dated 22.11.2012 in favour of the Respondent for "Construction of Bored CAST-IN-SITU RCC Pile foundation for ROB at Rai Nehra Bahadurgarh road on Delhi-Ambala Railway line near KMP at Sonipat on Piece Rate basis" (hereinafter referred to as "the contract") on piece rate basis, governed by the terms & conditions along with Bill of Quantities ("BOQ") forming part of the work order. vi. It is stated that the Respondent mobilized the Kelly machine in the month of February 2013, which was a....
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....LC crane, DMC Tripod, wielding set from 23.11.2012 to 10.05.2013. Claim No.3: A sum of Rs. 25 lacs being the idling charges/under-utilization of TMR/DMC @ Rs. 3.5 lacs/month with effect from 11.05.2013 to 31.12.2013. Claim No.4: A sum of Rs. 1,10,000/- being the loss of turnover for the period between 21.01.2013 to 31.12.2013 for the prolonged period /extended period of stay at site by Claimant. Claim No. 5: A sum of Rs. 1,10,00,000/- on account of harassment, mental agony, financial monetary & business loss pegged at Rs. 5 lacs per month for 15 months. Claim No. 6: A sum of Rs. 7,00,000/- being the loss of profit on the balance work remained executed due to breaches, lapses, delays and defaults committed by Respondent. Claim No. 7: A sum of Rs. 21 lacs being the escalation for the work executed from the period 22.01.2013 to 31.12.2013 based on 1st to 6th RA bill. Claim No. 8 & 9: Presuit, pendentilite and future interest (a, 18% p.a. on claim no. 1 to 5. Claim No. 10: A sum of Rs. 5,00,000/- being the cost of Arbitration. Claim No. 11: A sum of Rs. 26 lacs being idle/under-utilization charges of labour and sta....
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....er dated 30.12.2017, the Arbitral Tribunal kept the arbitral proceedings in abeyance till the completion of the Debt reduction process. xvii. Pursuant thereto, a Resolution Plan was submitted before the Hon'ble NCLT, Kolkata on 18.04.2018 and was duly approved by the Adjudicating Authority. xviii. It is further stated that on 16.08.2019, the Hon'ble NCLAT upheld the approved Resolution Plan and dismissed the appeals preferred by certain creditors challenging the same, whereupon the Resolution Plan attained finality and was made effective from the date of approval by the Adjudicating Authority. It is stated that these developments were duly brought to the notice of both the Arbitral Tribunal and the Respondent. xix. It is stated that the Arbitral Tribunal rendered its Award dated 26.07.2021 in Arbitration Case No. 158/2014. xx. The learned Sole Arbitrator recorded that both parties had unequivocally stated that they did not intend to lead oral evidence, and that the dispute would be decided solely on the basis of the documents placed on record. xxi. The learned Sole Arbitrator also undertook an examination of the terms of the agreement be....
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....justing the amount awarded under the counter-claims, the net amount awarded in favour of the Respondent/Claimant worked out to Rs. 20,42,287/-, together with simple interest at the rate of 9% per annum from the date of the Award until realization. 3. The preliminary objection raised by the learned counsel for the Petitioner is that the learned Arbitral Tribunal lacked the jurisdiction to adjudicate upon the claims preferred by the Respondent/Claimant and to render the impugned Award, as the Petitioner had been subjected to insolvency proceedings under the IBC during the pendency of the arbitral proceedings, which ultimately culminated in the approval of a Resolution Plan by the NCLT, Kolkata. It is further contended that by virtue of Section 31(1) of the IBC, upon approval of the Resolution Plan by the Adjudicating Authority, the same becomes binding on the Corporate Debtor, its creditors, employees, members, governmental authorities and all other stakeholders, thereby extinguishing all claims not forming part of the approved Resolution Plan. 4. The question raised by the learned Counsel for the Petitioner as to whether the dues payable to a creditor can survive post the Reso....
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....herefore will be effective from the date on which the I&B Code has come into effect. 102.3. Consequently all the dues including the statutory dues owed to the Central Government, any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 could be continued." 7. In the said case, the Apex Court reiterated that upon approval of a resolution plan under Section 31 of the IBC, all claims not forming part of the resolution plan stand extinguished. The Apex Court further held that any arbitral award rendered in respect of such extinguished claims is incapable of enforcement and cannot survive the approval of the resolution plan. The Apex Court emphasized that the IBC overrides all inconsistent proceedings and that continuation of arbitral adjudication in respect of claims extinguished by operation of the approved resolution plan would defeat the very object of the insolvency framework. The Court specifically held that once the claim itself stands extinguished, the adjudicatory forum l....
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....solution process so that the process can be proceeded with and concluded without further complications. View taken by the High Court cannot be accepted in the light of the clear cut provisions of the IBC as well as the law laid down by this Court. In view of the resolution plan, as approved, the claim of the respondent stood extinguished. Therefore, the Facilitation Council did not have the jurisdiction to arbitrate on the said claim. Since the award was passed without jurisdiction, the same could be assailed in a proceeding under Section 47CPC. View taken by the High Court that because the appellant did not challenge the award under Section 34 of the 1996 Act, therefore, it was precluded from objecting to execution of the award at the stage of Section 47CPC, is wholly unsustainable." 9. Applying the aforesaid principles to the facts of the present case, it is evident that CIRP against the Petitioner was initiated by order dated 30.03.2017 passed by the NCLT, Kolkata. Consequent thereto, a moratorium under Section 14 came into operation and a public announcement under Section 13 was issued inviting all creditors to submit their claims before the Resolution Professional. The Resp....