ELECTROSTEEL STEEL LIMITED (NOW M/S ESL STEEL LIMITED)versusISPAT CARRIER PRIVATE LIMITED

                [2025] 4 S.C.R. 1373 : 2025 INSC 525

                       Electrosteel Steel Limited
                     (Now M/s ESL Steel Limited)
                                   v.
                     Ispat Carrier Private Limited
                      (Civil Appeal No. 2896 of 2024)
                                 21 April 2025
               [Abhay S. Oka and Ujjal Bhuyan,* JJ.]


                           Issue for Consideration
       Whether upon approval of the resolution plan by the NCLT, the claim
       of the respondent being outside the purview of the resolution plan
       stood extinguished; whether the arbitral award dated 06.07.2018
       was capable of being executed.

                                  Headnotes†
       Code of Civil Procedure, 1908 – s.47 – Arbitration and
       Conciliation Act, 1996 – s.34 – Insolvency and Bankruptcy
       Code, 2016 – s.31 – Micro, Small and Medium Enterprises
       Development Act, 2006 – Respondent filed claim petitions
       against the appellant before the Facilitation Council under
       the provisions of MSME Act – On 07.06.2017, arbitral
       proceedings commenced – On 27.06.2017, financial creditors
       of appellant invoked s.7 of IBC before the NCLT – NCLT
       imposed moratorium and an interim resolution professional
       was appointed – Therefore, arbitral proceedings were kept in
       abeyance – Respondent filed its claim before the resolution
       professional – Ultimately resolution plan was approved by
       NCLT settling all the claims of operational creditors at nil
       value – No appeal was preferred by the respondent – On
       lifting of moratorium, Facilitation Council resumed the arbitral
       proceedings – An award passed on 06.07.2018 against the
       appellant – Appellant did not challenge the award u/s.34 of
       the 1996 Act – Respondent instituted execution proceeding –
       At the stage of execution, appellant filed petition contending
       that arbitral award was nullity and not executable as claim
       of respondent was settled at nil – Petition was dismissed
       and the Executing Court by order dated 03.03.2023 directed
       to comply with award dated 06.07.2018 – The said order was

* Author
1374                                                            [2025] 4 S.C.R.

                          Supreme Court Reports


    challenged by the appellant by filing writ petition before the
    High Court, which was dismissed – Correctness:
    Held: High Court is correct in answering the issue that a plea
    of nullity qua an arbitral award can be raised in a proceeding
    u/s.47 CPC but such a challenge would lie within a very narrow
    compass – However, objection to execution of an award u/s.47
    CPC is not dependent or contingent upon filing a petition u/s.34
    of the 1996 Act – High Court was not justified in taking the view
    that since the appellant did not file a petition u/s.34 of the 1996
    Act, therefore, it was precluded from filing an application before
    the Executing Court to declare the award as void and hence non-
    executable – In so far the other issues framed by the High Court
    are concerned, it is by now well settled that once a resolution plan
    is duly approved by the adjudicating authority u/s.31(1), all claims
    which are not part of the resolution plan shall stand extinguished
    and no person will be entitled to initiate or continue any proceeding
    in respect to a claim which is not part of the resolution plan – In so
    far the resolution plan is concerned, the resolution professional, the
    committee of creditors and the adjudicating authority noted about
    the claim lodged by the respondent in the arbitration proceeding –
    However, the respondent was not included in the top 30 operational
    creditors whose claims were settled at nil – If the claims of the top
    30 operational creditors were settled at nil, it goes without saying
    that the claim of the respondent could not be placed higher than
    the said top 30 operational creditors – Moreover, the resolution plan
    itself provides that all claims covered by any suit, cause of action,
    arbitration etc. shall be settled at nil – Therefore, it is crystal clear
    that in so far claim of the respondent is concerned, the same would
    be treated as nil at par with the claims of the top 30 operational
    creditors – 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 u/s.47 CPC – The
    award dated 06.07.2018 is incapable of being executed – Impugned
    order of the High Court is set aside. [Paras 47, 49, 50, 50.1, 52]

    Words and Phrases – Lifting of Moratorium – Meaning of:
    Held: Lifting of the moratorium does not mean that the claim of
    the respondent would stand revived notwithstanding approval of
    the resolution plan by the adjudicating authority – Moratorium is
    intended to ensure that no further demands are raised or adjudicated
[2025] 4 S.C.R.                                                           1375

        Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                       Ispat Carrier Private Limited

     upon during the corporate insolvency resolution process so that
     the process can be proceeded with and concluded without further
     complications. [Para 50.1]
     Insolvency and Bankruptcy Code, 2016 – ss.30, 31, 32, 238 –
     Finality and binding value of Resolution Plan – Discussed.
     [Paras 25-33]

                             Case Law Cited
     Ajay Kumar Radheshyam Goenka v. Tourism Finance Corporation
     of India Ltd. [2023] 4 SCR 986 : (2023) 10 SCC 545; Essar Steel
     India Ltd. Committee of Creditors v. Satish Kumar Gupta [2019] 16
     SCR 275 : (2020) 8 SCC 531; Ghanshyam Mishra & Sons (P) Ltd. v.
     Edelweiss Asset Reconstruction Co. Ltd. [2021] 13 SCR 737 :
     (2021) 9 SCC 657; Ruchi Soya Industries Ltd. v. Union of India
     (2022) 6 SCC 343; RPS Infrastructure Ltd. v. Mukul Kumar [2023]
     12 SCR 150 : (2023) 10 SCC 718; Adani Power Ltd. v. Shapoorji
     Pallonji & Co. Pvt. Ltd, Civil Appeal No. 1741 of 2023; Sarwan
     Kumar v. Madam Lal Aggarwal [2003] 1 SCR 918 : (2003) 4 SCC
     147; M/s. JSW Steel Ltd. v. Pratishtha Thakur Haritwal, 2025 INSC
     401; Vasudev Dhanjibhai Modi v. Rajabhai Abdul Rehman [1971]
     1 SCR 66 : (1970) 1 SCC 670 – referred to.

                                List of Acts
     Micro, Small and Medium Enterprises Development Act, 2006;
     Insolvency and Bankruptcy Code, 2016; Arbitration and Conciliation
     Act, 1996; Civil Procedure Code, 1908; Companies Act, 2013.

                             List of Keywords
     Section 7 of Insolvency and Bankruptcy Code, 2016; Section 31
     of Insolvency and Bankruptcy Code, 2016; Moratorium; Arbitration;
     Facilitation Council; Arbitral award; Section 47 of CPC; Execution
     proceedings; Resolution plan; Operational creditors; Claim
     extinguishment; Jurisdiction; Plea of nullity qua an arbitral award
     raised in execution proceeding; Lifting of moratorium.

                            Case Arising From
     CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2896 of 2024
     From the Judgment and Order dated 17.07.2023 of the High Court
     of Jharkhand at Ranchi in CMP No. 376 of 2023
1376                                                         [2025] 4 S.C.R.

                         Supreme Court Reports


                         Appearances for Parties
     Advs. for the Appellant:
     Gopal Jain, Sr. Adv., Ms. Anusuya Sadhu Sinha, Siddharth Naidu,
     M/s. KSN & Co.
     Advs. for the Respondent:
     Rajshekhar Rao, Sr. Adv., Sameer Kumar, Shahrukh Ahmad,
     Ms. Somi Sharma, Mandeep Baisala.

                Judgment / Order of the Supreme Court

                                Judgment

     Ujjal Bhuyan, J.

     This appeal by special leave is directed against the judgment and
     order dated 17.07.2023 passed by the High Court of Jharkhand at
     Ranchi in CMP No. 376 of 2023 filed by the appellant.
2.   Appellant had filed CMP No. 376 of 2023 before the High Court
     of Jharkhand at Ranchi (briefly ‘the High Court’ hereinafter) under
     Article 227 of the Constitution of India assailing the order dated
     03.03.2023 passed by the learned Presiding Officer, Commercial
     Court/District Judge-1, Bokaro in Commercial Execution Case No.
     21 of 2022 (Execution Case No. 77 of 2018). It may be mentioned
     that by the aforesaid order dated 03.03.2023, learned Presiding
     Officer, Commercial Court/District Judge-1, Bokaro (referred to
     hereinafter as ‘the Executing Court’) had dismissed the application
     dated 14.05.2019 filed by the judgment debtor (appellant), further
     directing the judgment debtor (appellant) to comply with the award
     dated 06.07.2018 passed by the West Bengal Micro, Small and
     Medium Facilitation Council, Kolkata within fifteen days of the order.
3.   Relevant facts may be briefly noted.
4.   On 02.12.2014 and 20.12.2014, respondent filed claim petitions before
     the West Bengal Micro, Small and Medium Facilitation Council (briefly
     ‘the Facilitation Council’ hereinafter) for a total principal outstanding
     amount of Rs. 1,59,09,214.00 which were registered as Case No.
     330/2014 and Case No. 331/2014. In Case No. 330/2014, the claim
     amount was Rs. 1,36,69,981.33, whereas in Case No. 331/2014 the
     claim amount was Rs. 22,39,233.00, thus the total amount being
[2025] 4 S.C.R.                                                      1377

        Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                       Ispat Carrier Private Limited

     Rs. 1,59,09,214.00. The claims were made under the provisions of
     the Micro, Small and Medium Enterprises Development Act, 2006
     (hereinafter referred to as ‘the MSME Act’).
5.   As per the requirement of the MSME Act, conciliation proceedings
     were initiated but attempt for conciliation failed. Thereafter, the
     arbitration proceedings were commenced on 07.06.2017.
6.   On 27.06.2017, the financial creditors of the appellant invoked Section
     7 of the Insolvency and Bankruptcy Code, 2016 (‘IBC’ hereinafter)
     before the National Company Law Tribunal, Kolkata Bench (NCLT)
     which was registered as C.P. No.(IB) 361/KB/2017.
7.   On 21.07.2017, NCLT imposed moratorium and an interim resolution
     professional was appointed.
8.   On 24.07.2017, the interim resolution professional issued a public
     announcement calling upon all the creditors to submit their claims
     before him.
9.   In view of the moratorium declared by the NCLT, arbitral proceedings
     before the Facilitation Council were kept in abeyance.
10. Respondent filed its claim before the resolution professional, who
    partly admitted the claim of the respondent.
11. On 29.03.2018, a resolution plan was submitted by Vedanta Limited
    before the NCLT wherein all the claims of operational creditors were
    settled at nil value.
12. However, claim of the respondent was not included in the resolution
    plan as approved by the committee of creditors. Ultimately, the
    resolution plan was approved by NCLT on 17.04.2018 under Section
    31 of the IBC on and from which date the moratorium period came
    to an end.
13. In the order dated 17.04.2018, NCLT declared that the claims of all
    the operational creditors were settled at nil. No appeal was preferred
    by the respondent. However, the aforesaid order of the NCLT dated
    17.04.2018 was challenged before the National Company Law
    Appellate Tribunal, New Delhi (NCLAT) in Company Appeal (AT)
    (Insolvency) No.175 of 2018 by some of the operational creditors.
    But the same was dismissed on 10.08.2018. Other creditors
    also approached NCLAT in Company Appeal (AT) (Insolvency)
    No.265/2018 and in analogous appeals. Specific ground taken was
1378                                                      [2025] 4 S.C.R.

                        Supreme Court Reports


     that in the resolution plan, the resolution applicant had not taken
     proper care of the operational creditors. These appeals were also
     dismissed by the NCLAT vide the order dated 20.08.2018. The
     matter was carried forward to this Court in Civil Appeal No. 1133 of
     2019. However, this Court dismissed the said appeal vide the order
     dated 27.11.2019.
14. It appears that on lifting of the moratorium, Facilitation Council
    resumed arbitral proceedings. Appellant did not contest the arbitral
    proceedings. Ultimately, an award was passed on 06.07.2018. As
    per the award, the Facilitation Council directed the appellant to pay
    a sum of Rs.1,59,09,214.00 along with interest to the respondent in
    terms of Section 16 of the MSME Act.
15. Appellant did not challenge the award dated 06.07.2018 under
    Section 34 of the Arbitration and Conciliation Act, 1996 (briefly ‘the
    1996 Act’ hereinafter).
16. Respondent instituted execution proceeding which was initially
    registered as Execution Case No.77 of 2018 and thereafter as
    Commercial Execution Case No.21 of 2022 before the Executing
    Court. At the stage of execution of the award, appellant filed a
    petition dated 14.05.2019 contending that the arbitral award was
    a nullity and hence not executable as the claim of the respondent
    was already settled at nil as per the resolution plan and, therefore,
    nothing was payable to the respondent.
17. Executing Court by the order dated 03.03.2023 dismissed the petition
    of the appellant and directed it to comply with the award dated
    06.07.2018 within fifteen days.
18. As noted above, this came to be challenged by the appellant
    before the High Court by filing a petition under Article 227 of the
    Constitution of India. High Court framed the following questions
    for consideration:
          a. The arbitral award having not been challenged under
          Section 34 of the Act of 1996, whether the objection to
          execution of the arbitral award referrable to Section 47 of
          the Civil Procedure Code, 1908 (CPC) was maintainable
          by alleging that the arbitral award itself was a nullity and
          hence non-executable?
[2025] 4 S.C.R.                                                              1379

        Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                       Ispat Carrier Private Limited

           b. Whether the arbitral award in the present case could
           be assailed as a nullity and hence non-executable within
           the permissible grounds of raising such a plea?
           c. Irrespective of maintainability of the objection to the
           arbitral award under Section 47 of the CPC, whether on
           facts, the Facilitation Council lost its jurisdiction to proceed
           and pronounce the arbitral award in view of the insolvency
           resolution plan of the petitioner which was duly approved
           under Section 31 of the IBC?
19. Insofar the first question is concerned, High Court opined that the
    plea of nullity qua an arbitral award can be raised in an execution
    proceeding under Section 47 of the CPC. However, the scope of
    interference would be very narrow. As regards the second question,
    High Court rejected the contention of the appellant that since the
    award suffered from patent or inherent lack of jurisdiction and therefore
    was a nullity, it can be questioned at the stage of execution without
    challenging the award under Section 34 of the 1996 Act. High Court
    answered the third question by holding that the Facilitation Council did
    not lose its jurisdiction to procced and pronounce the arbitral award
    notwithstanding approval of the resolution plan by the NCLT under
    Section 31 of IBC. Reasoning given by the High Court is that the
    arbitral proceedings were initiated prior to the insolvency resolution
    date, kept suspended during the moratorium period and resumed
    after lifting of the moratorium; the approved resolution plan simply
    determined the claim of the respondent as nil. Accordingly, vide the
    impugned judgment and order High Court dismissed the petition
    filed by the appellant under Article 227 of the Constitution of India.
20. Hence, the present appeal.
21. On 04.08.2023 notice was issued in the related SLP (C)
    No.15823/2023. It was submitted on behalf of the respondent that
    a sum of Rs.15,48,70,890.00 was withdrawn but gave an undertaking
    to deposit the said amount. This Court directed the respondent to
    deposit the said amount with the Executing Court with further direction
    to the Executing Court to invest the said amount in an interest bearing
    fixed deposit until further orders. In the hearing held on 20.02.2024,
    leave was granted.
22. Learned senior counsel for the appellant submits that the High Court
    had erroneously held that the resolution plan did not determine the
1380                                                       [2025] 4 S.C.R.

                         Supreme Court Reports


     claim of the respondent at nil and, therefore, the Facilitation Council
     had the jurisdiction to decide on the claim of the respondent.
     22.1. He submits that the High Court had misread and misinterpreted
           the resolution plan which would be evident from a perusal of
           the relevant paragraphs of the resolution plan. Respondent had
           submitted its claim as an operational creditor to the resolution
           professional. Such claim was the same claim which formed
           the subject matter of the proceedings before the Facilitation
           Council. Resolution applicant had submitted a resolution plan
           in respect of the appellant (corporate debtor) in accordance
           with the provisions of Section 30 of the IBC to enable the
           appellant to continue as a going concern. A reading of the
           relevant paragraphs of the resolution plan i.e. paragraphs
           3.2(v), 3.4(ii) and 3.8(i) would indicate that the claims of the
           operational creditors including the debt of the respondent
           were settled at nil and, therefore, they were not entitled to
           any payment.
     22.2. On 17.04.2018, NCLT approved the resolution plan under
           Section 31 of the IBC. Paragraph 50 of the order dated
           17.04.2018 specifically recorded that the claims of all the
           operational creditors were settled at nil. This Court in Civil
           Appeal No. 1133 of 2019 after going through the resolution
           plan had observed that there was nil payment to be made to all
           the operational creditors as per the resolution plan submitted
           and approved.
     22.3. Learned senior counsel submits that on 17.04.2018 when
           the NCLT had approved the resolution plan, claims of the
           operational creditors were settled at nil. This became binding
           on the respondent and all other authorities as per Section
           31(1) of the IBC. In this connection, learned senior counsel
           has referred to and relied upon the decision of this Court
           in Ajay Kumar Radheshyam Goenka Vs. Tourism Finance
           Corporation of India Ltd.1 In the said decision, this Court had
           made it abundantly clear that the creditor has no option but
           to join the process under the IBC. Once the plan is approved,
           it would bind everyone under the sun. He contended that


1   (2023) 10 SCC 545
[2025] 4 S.C.R.                                                          1381

        Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                       Ispat Carrier Private Limited

             the respondent had submitted its claim before the resolution
             professional but the same was not included in the resolution
             plan as was approved by the committee of creditors and then
             by the adjudicating authority i.e. NCLT which became binding
             on the respondent. Even if the respondent had not submitted
             its claim before the resolution professional, the approved
             resolution plan would still have been binding on the respondent.
     22.4. He, therefore, submits that on approval of the resolution plan
           by the NCLT, claim of the respondent stood extinguished.
           Thus, respondent had no claim against the appellant (corporate
           debtor) in law. Respondent was also estopped from pursuing
           its claim before the Facilitation Council and also from seeking
           execution of the award after approval of the resolution plan.
     22.5. After adverting to the objectives of the IBC, learned senior
           counsel submits that the appellant (corporate debtor) has
           been given a fresh and clean slate upon approval of the
           resolution plan. The same cannot be allowed to be defeated or
           frustrated by raising claims relatable to the period covered by
           the corporate insolvency resolution process. In this connection,
           learned senior counsel has placed reliance on the following
           decisions:
                   (i)    Essar Steel India Ltd. Committee of Creditors
                          Vs. Satish Kumar Gupta2
                   (ii)   Ghanshyam Mishra & Sons (P) Ltd. Vs.
                          Edelweiss Asset Reconstruction Co. Ltd.3
                   (iii) Ruchi Soya Industries Ltd. Vs. Union of India4
                   (iv) RPS Infrastructure Ltd. Vs. Mukul Kumar5
     22.6. On the basis of the above decisions, learned senior counsel
           submits that it would lead to an absurd situation if the
           respondent and other operational creditors are permitted to
           pursue their individual claims even after the corporate debtor


2   (2020) 8 SCC 531
3   (2021) 9 SCC 657
4   (2022) 6 SCC 343
5   (2023) 10 SCC 718
1382                                                          [2025] 4 S.C.R.

                                    Supreme Court Reports


               goes through a successful corporate insolvency resolution
               process (CIRP) where the claims of the operational creditors
               were settled at nil in the resolution plan which was approved
               by the committee of creditors and finally by the adjudicating
               authority (NCLT). In such a case, the corporate debtor would
               once again have to struggle to sustain itself as a going concern
               to satisfy such claims. Thus, the object or the purport of IBC
               would be defeated.
     22.7. Adverting to a decision of this Court in Adani Power Ltd. Vs.
           Shapoorji Pallonji & Co. Pvt. Ltd.6, learned senior counsel
           submits that this Court has held that the resolution plan, as
           approved, is binding on all and cannot be made subject matter
           of arbitration or any other proceedings. Once the resolution
           plan is approved, the resolution applicant cannot be settled with
           any liability except what is mentioned in the resolution plan.
     22.8. Learned senior counsel further submits that the resolution
           plan or the terms thereof could have been challenged by the
           respondent in the manner provided under Section 32 read with
           Section 61(3) of the IBC. Further, Section 63 of the IBC makes
           it abundantly clear that no civil court or authority shall have
           jurisdiction to entertain any suit or proceedings in respect of
           any matter over which NCLT or NCLAT has jurisdiction under
           the IBC and that a civil court would not have any jurisdiction.
     22.9. He submits that respondent had accepted the resolution plan
           as approved and did not prefer any challenge thereto or the
           order of the NCLT approving the resolution plan. On the other
           hand, some operational creditors challenged the order dated
           17.04.2018 passed by the NCLT approving the resolution plan.
           However, those challenges were dismissed by the NCLAT.
           When the matter reached this Court in Civil Appeal No. 1133 of
           2019, this Court vide the order dated 27.11.2019 had clarified
           that implementation of the resolution plan was not stayed while
           dismissing the appeal.
     22.10. Thus, the Facilitation Council lacked jurisdiction in respect
            of the claim of the respondent which was part of the subject


6   Civil Appeal No. 1741 of 2023
[2025] 4 S.C.R.                                                        1383

        Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                       Ispat Carrier Private Limited

               matter of the resolution plan. Facilitation Council could not
               have continued with the arbitration proceedings and could
               not have passed the award in view of Section 63 read with
               Section 238 of the IBC. Therefore, learned senior counsel
               would submit that the award passed by the Facilitation Council
               is a nullity and non est in the eye of law. This award has been
               passed in respect of a claim which stood extinguished and
               did not exist in law.
     22.11. Learned senior counsel submits that an award can be
            challenged in an execution proceeding on the ground of it
            being a nullity. In the instant case, Facilitation Council lacked
            jurisdiction to pass the award. Even if the appellant had not
            challenged the award under Section 34 of the 1996 Act, the
            issue of nullity could still be raised at the stage of execution.
            In this connection, learned senior counsel has referred to
            a decision of this Court in Sarwan Kumar Vs. Madam Lal
            Aggarwal7. In the circumstances, learned senior counsel
            submits that appellant was well within its right to object to
            execution of the award by contending that the award itself
            is a nullity since the Facilitation Council inherently lacked
            jurisdiction to arbitrate on the claim of the respondent post
            approval of the resolution plan.
     22.12. In view of the above, learned senior counsel for the appellant
            submits that the execution petition filed by the respondent for
            execution of the award ought to have been dismissed by the
            Executing Court. High Court committed a manifest error in
            declining to entertain the objections filed by the appellant to
            execution of the award. That being the position, impugned
            order of the High Court is liable to be set aside, so also the
            execution proceedings.
23. Learned senior counsel for the respondent on the other hand supports
    the impugned order passed by the High Court.
     23.1. He submits that the corporate debtor (appellant) which was
           being managed by the resolution professional, had knowledge
           of the arbitral award. As a matter of fact, appellant had taken


7   (2003) 4 SCC 147
1384                                                       [2025] 4 S.C.R.

                        Supreme Court Reports


          shelter of the arbitral award to get the revision petition filed by
          the respondent before the Calcutta High Court disposed of.
          The revision petition was filed against an order passed under
          Section 14 of the 1996 Act. It was submitted before the High
          Court that an arbitral award was passed by the Facilitation
          Council and on the basis of such submission, Calcutta High
          Court had disposed of the aforesaid proceedings observing
          that Section 14 proceedings had been rendered infructuous
          leaving the partes to avail their remedies in accordance with law.
    23.2. Learned counsel submits that upon approval of the resolution
          plan, the proceedings which were stayed by the Facilitation
          Council in view of the moratorium, did not automatically
          get terminated. On the contrary those stood revived. He
          submits that operational creditors whose claims were pending
          adjudication at the time of initiation of the corporate insolvency
          resolution process, formed a different class. Proceedings
          initiated by them would continue post lifting of moratorium for
          the purpose of quantification of their claims.
    23.3. It is evident from the order passed by the Calcutta High Court
          that the appellant was aware of the arbitral award. Appellant
          did not challenge the award despite liberty granted by the High
          Court. Without challenging the award under Section 34 of the
          1996 Act, it was not open to the appellant to challenge the
          same in a proceeding under Section 47 of the CPC.
    23.4. Learned senior counsel for the respondent distinguished
          the case of Ghanshyam Mishra (supra) by contending that
          the said judgment was rendered in a distinguishable factual
          situation where the creditor had failed to lodge its claim
          upon public announcement by the resolution professional.
          Therefore, this Court held that such a creditor cannot file
          its claim thereafter and such claim gets extinguished. This
          judgment does not deal with claims filed before the interim
          resolution professional or resolution professional and not
          included in the resolution plan. High Court had noticed this
          fact and has rightly observed that since the respondent does
          not fall in the category of operational creditors whose claims
          were rendered nil, there was no occasion for the respondent
          to challenge the resolution plan.
[2025] 4 S.C.R.                                                       1385

        Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                       Ispat Carrier Private Limited

     23.5. Learned counsel submits that there is no inconsistency between
           IBC and the MSME Act. Therefore, High Court rightly did not
           examine the plea of inconsistency.
     23.6. He has referred to various provisions of the IBC as well as
           to the decision of this Court in Ghanshyam Mishra (supra)
           and submits that imposition of moratorium and consequential
           approval of resolution plan does not terminate or put an end to
           pending proceedings but those were merely stayed. Legislature
           has not provided that upon approval of a resolution plan, all
           pending proceedings would get extinguished. Therefore, post
           expiry of the moratorium period, pending proceedings such
           as arbitral proceedings would stand revived and taken to their
           logical conclusion.
     23.7. Learned senior counsel submits that in the present case,
           respondent had lodged its claim before the interim resolution
           professional and had also informed about the pendency of
           proceedings before the Facilitation Council. Interim resolution
           professional had published an information memorandum on
           20.10.2017 mentioning therein a list of claimants which did not
           include operational creditors whose claims were sub-judiced
           before different judicial fora. Validity of such claims would
           be decided after the judicial proceedings were complete. He
           submits that after lifting of moratorium, notices were duly issued
           to the appellant by the Facilitation Council but the appellant
           decided not to appear and contest the proceedings. After the
           award was passed, appellant did not challenge the same under
           Section 34 of the 1996 Act. Having not challenged the award in
           the forum designated by law, he could not have challenged the
           same by filing objections to the arbitral award in a proceeding
           under Section 47 of the CPC. Learned counsel asserts that
           Section 34 of the 1996 Act is the only acknowledged remedy
           available to challenge an award. Appellant had the opportunity
           to assail the award under Section 34 of the 1996 Act but he did
           not do so. Therefore, filing of application to declare the award a
           nullity in execution proceedings instituted by the respondent for
           execution of the award is a clear abuse of the process of law
           and was rightly rejected by the Executing Court which decision
           has been upheld by the High Court. Learned counsel further
           submits that since the claim of the respondent was pending
1386                                                        [2025] 4 S.C.R.

                         Supreme Court Reports


            before the Facilitation Council and in view of the information
            memorandum issued by the interim resolution professional,
            there was no need for the respondent to have challenged the
            resolution plan. Therefore, the High Court was fully justified in
            rejecting the petition filed by the appellant under Article 227
            of the Constitution of India. The appeal is devoid of any merit
            and should, therefore, be dismissed.
24. Submissions made by learned counsel for the parties have received
    the due consideration of the Court.
25. At the outset, let us examine a few relevant provisions of the IBC.
    Section 30 provides for submission of resolution plan. As per sub-
    section (1), a resolution applicant may submit a resolution plan
    alongwith an affidavit stating that he is eligible under Section 29A to
    the resolution professional prepared on the basis of the information
    memorandum in terms of Section 29. Sub-section (2) says that the
    resolution professional shall examine each resolution plan received by
    him to confirm that such resolution plan complies with the requirement
    of clauses (a) to (f) of the said sub-section. Thereafter the resolution
    professional is required under sub-section (3) to present the resolution
    plans which are in conformity with the requirements of sub-section (2)
    to the committee of creditors for its approval. Sub-section (4) mandates
    that the committee of creditors may approve a resolution plan by
    vote of not less than 66 percent of the voting share of the financial
    creditors after considering its feasibility and viability. The resolution
    applicant may also attend such meeting of the committee of creditors
    though it shall not have the right to vote unless it is also a financial
    creditor (sub-section (5)). Once the resolution plan is approved by
    the committee of creditors, the resolution professional shall submit
    the same to the adjudicating authority in terms of sub-section (6).
26. Section 31 deals with approval of resolution plan. As per
    sub-section (1), if the adjudicating authority is satisfied that the
    resolution plan as approved by the committee of creditors meets
    the requirement of sub-section (2) of Section 30, it shall by order
    approve the resolution plan. Once the resolution plan is approved
    by the adjudicating authority, it shall be binding on the corporate
    debtor and its employees, members, creditors including the central
    government, any state government or any local authority to whom
    a debt including statutory dues are owed, guarantors and other
    stakeholders involved in the resolution plan. However, before passing
[2025] 4 S.C.R.                                                           1387

           Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                          Ispat Carrier Private Limited

     an order of approval, the adjudicating authority has to satisfy itself
     that the resolution plan has provisions for its effective implementation.
     Under sub-section (2), if the adjudicating authority is satisfied that
     the resolution plan does not conform to the requirements referred to
     in sub-section (1), it may by an order reject the resolution plan. Sub-
     section (3) provides that once the resolution plan is approved under
     sub-section (1), the moratorium order passed by the adjudicating
     authority under Section 14 shall cease to have effect.
27. Under Section 32, any appeal from an order approving the resolution
    plan shall be in the manner and on the grounds laid down in sub-
    section (3) of Section 61. Section 61 provides for appeals and
    appellate authority. Sub-section (1) says that any person aggrieved
    by an order of the adjudicating authority may prefer an appeal to
    the National Company Law Tribunal (NCLT) within thirty days as
    provided in sub-section (2). Be it stated that National Company Law
    Tribunal (NCLT) constituted under Section 408 of the Companies Act,
    2013 is the adjudicating authority as defined in Section 5(1) of IBC.
    Sub-section (3) deals with an appeal against an order approving a
    resolution plan under Section 31. It says that such an appeal can
    be filed on the following grounds:
     (i)     the approved resolution plan is in contravention of the
             provisions of any law for the time being in force;
     (ii)    there has been material irregularity in exercise of the
             powers by the resolution professional during the corporate
             insolvency resolution period;
     (iii) the debts owed to operational creditors of the corporate
           debtor have not been provided for in the resolution plan
           in the manner specified by the Insolvency and Bankruptcy
           Board of India established under Section 188(1);
     (iv) the insolvency resolution process costs have not been
          provided for repayment in priority to all other debts; or
     (v)     the resolution plan does not comply with any other criteria
             specified by the Insolvency and Bankruptcy Board of India.
28. Section 238 of IBC clarifies that provisions of IBC shall have effect
    notwithstanding anything inconsistent therewith contained in any
    other law for the time being in force or any instrument having effect
    by virtue of any such law.
1388                                                      [2025] 4 S.C.R.

                        Supreme Court Reports


29. In Essar Steel India Ltd. (supra), a three-Judge Bench of this Court
    examined amongst others the role of resolution applicants, resolution
    professionals and the committee of creditors constituted under the
    IBC as well as the jurisdiction of NCLT and NCLAT qua resolution
    plans approved by the committee of creditors. After an elaborate
    and exhaustive analysis of various provisions of the IBC, the Bench
    concluded that a successful resolution applicant cannot suddenly
    be faced with ‘undecided’ claims after the resolution plan submitted
    by him has been accepted. This would amount to a hydra head
    popping up which would throw into uncertainty amounts payable
    by a prospective resolution applicant. All claims must be submitted
    to and decided by the resolution professional so that a prospective
    resolution applicant knows exactly what has to be paid in order that
    it may then take over and run the business of corporate debtor.
    Paragraph 107 of the said decision reads as under:
          107. For the same reason, the impugned NCLAT judgment
          [Standard Chartered Bank v. Satish Kumar Gupta, 2019
          SCC OnLine NCLAT 388] in holding that claims that may
          exist apart from those decided on merits by the resolution
          professional and by the Adjudicating Authority/Appellate
          Tribunal can now be decided by an appropriate forum in
          terms of Section 60(6) of the Code, also militates against
          the rationale of Section 31 of the Code. A successful
          resolution applicant cannot suddenly be faced with
          “undecided” claims after the resolution plan submitted by
          him has been accepted as this would amount to a hydra
          head popping up which would throw into uncertainty
          amounts payable by a prospective resolution applicant who
          would successfully take over the business of the corporate
          debtor. All claims must be submitted to and decided by
          the resolution professional so that a prospective resolution
          applicant knows exactly what has to be paid in order that it
          may then take over and run the business of the corporate
          debtor. This the successful resolution applicant does on a
          fresh slate, as has been pointed out by us hereinabove.
          For these reasons, NCLAT judgment must also be set
          aside on this count.
30. An important question arose for consideration in Ghanshyam Mishra
    (supra). Again a three-Judge Bench of this Court examined a question
[2025] 4 S.C.R.                                                           1389

        Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                       Ispat Carrier Private Limited

     as to whether any creditor including the central government, state
     government or any local authority is bound by the resolution plan
     once it is approved by the adjudicating authority under sub-section
     (1) of Section 31 of IBC? Corollary to the above question was the
     issue as to whether after approval of the resolution plan by the
     adjudicating authority, a creditor including the central government,
     state government or any local authority is entitled to initiate any
     proceeding for recovery of any of the dues from the corporate
     debtor which are not a part of the resolution plan approved by the
     adjudicating authority. In that case, the Bench concluded by holding
     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 the
     resolution plan by the adjudicating authority, all such claims which
     are not a part of the resolution plan shall stand extinguished and
     no person will be entitled to initiate or continue any proceeding in
     respect to a claim which is not part of the resolution plan. The Bench
     declared that all dues including 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 proceeding
     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. Paragraph 102 of the aforesaid decision reads thus:
           102 In the result, we answer the questions framed by us
           as under:
           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 the resolution plan, shall
           stand extinguished and no person will be entitled to initiate
1390                                                        [2025] 4 S.C.R.

                          Supreme Court Reports


          or continue any proceedings in respect to a claim, which
          is not part of the resolution plan.

             *        *        *        *       *        *        *
          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.
31. In Ruchi Soya Industries Ltd. (supra), a two-Judge Bench of this
    Court referred to the decision in Ghanshyam Mishra (supra) and
    thereafter declared that on the date on which the resolution plan
    was approved by the NCLT, all claims stood frozen and no claim,
    which is not a part of the resolution plan, would survive.
32. A three-Judge Bench of this Court in Ajay Kumar Radheshyam
    Goenka (supra) held that a creditor has no option but to join the
    process under the IBC. Once the plan is approved, it would bind
    everyone under the sun. The making of a claim under the IBC
    and accepting the same and not making any claim will not make
    any difference in the light of Section 31 of IBC. Both the situations
    will lead to Section 31 and the finality and binding value of the
    resolution plan. Paragraph 62 of the said decision is extracted
    hereunder:
          62. Thus, from the aforesaid, it is evident that the creditor
          has no option but to join the process under the IBC.
          Once the plan is approved, it would bind everyone under
          the sun. The making of a claim and accepting whatever
          share is allotted could be termed as an “Involuntary Act”
          on behalf of the creditor. The making of a claim under the
          IBC and accepting the same and not making any claim,
          will not make any difference in light of Section 31 IBC.
          Both the situations will lead to Section 31 and the finality
          and binding value of the resolution plan.
33. In a recent decision, a two-Judge Bench of this Court decided
    a contempt application in M/s. JSW Steel Ltd. Vs. Pratishtha
[2025] 4 S.C.R.                                                      1391

        Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                       Ispat Carrier Private Limited

     Thakur Haritwal 8. Contention of the petitioner was that respondents
     had wilfully disobeyed the judgment of this Court in Ghanshyam
     Mishra (supra) by issuing demand notices pertaining to the period
     covered by the corporate insolvency resolution process. In the
     above context, the Bench reiterated what was held in Ghanshyam
     Mishra (supra) which has been followed in subsequent decisions
     and thereafter declared that all claims which are not part of the
     resolution plan shall stand extinguished. No person will be entitled
     to initiate or continue any proceeding in respect to a claim which is
     not part of the resolution plan. Though the Bench did not take any
     action for contempt in view of the unconditional apology made by
     the respondents nonetheless the Bench reiterated the proposition
     laid down in Ghanshyam Mishra (supra) clarifying that even if any
     stakeholder is not a party to the proceedings before the NCLT and if
     such stakeholder does not raise its claim before the interim resolution
     professional/resolution professional, the resolution plan as approved
     by the NCLT would still be binding on him.
34. Having noticed the relevant provisions of IBC and the judgments of
    this Court, let us now deal with the challenge made in this appeal.
35. Respondent had supplied telescopic and type mounted cranes,
    75 ton crawler cranes, hydra and trailors on hiring basis to the
    appellant pursuant to two purchase orders dated 02.06.2011 and
    06.06.2011. Case No. 330 of 2014 pertains to 138 numbers of
    bills under eight work orders in which the disputed amount was
    Rs. 1,36,69,981.33; on the other hand Case No. 331 of 2014 pertains
    to 158 numbers of bills under nine work orders where the disputed
    amount was Rs. 22,39,233.00. Thus, the total disputed amount was
    Rs. 1,59,09,214.33. Buyer (appellant) did not make any payment
    so the entire amount was claimed as outstanding and due. Initially
    conciliation proceedings were initiated by the Facilitation Council but
    the buyer unit was not present though it had filed written submissions
    stating that on the request of the supplier it had appointed an
    arbitrator whereafter arbitration proceedings had commenced. As
    an independent arbitration agreement existed between the parties,
    Facilitation Council should not proceed under Section 18(3) of the
    MSME Act. Already arbitration process was going on as per the
    arbitration agreement. Facilitation Council in its proceedings dated


8   2025 INSC 401
1392                                                         [2025] 4 S.C.R.

                         Supreme Court Reports


     31.07.2017 noted that it appeared from newspaper reports and order
     copy of the NCLT that moratorium was declared under Section 14
     of IBC in the matter of State Bank of India Vs. Electrosteel Steels
     Ltd. It was decided that the matter should be kept in abeyance till
     the moratorium period was over.
36. We shall now deal with the resolution plan and revert back to the
    proceedings of the Facilitation Council thereafter. The resolution
    plan was submitted by Vedanta Ltd. as resolution applicant and is
    dated 29.03.2018. Clause 3 contained the mandatory contents of the
    resolution plan. Clause 3.2(v) declared that while the liquidation value
    of the corporate debtor was Rs. 2,899.98 crores, the admitted debts
    of the financial creditors aggregated to approximately Rs.13,395.25
    crores. The liquidation value was not sufficient to cover the debts
    of the financial creditors in full. Therefore, the liquidation value of
    the operational creditors or the other creditors or stakeholders of
    the corporate debtor including dues of the employees (other than
    workmen), government dues, taxes etc. and other creditors and
    stakeholders was nil. As such, they would not be entitled to any
    payment. The dissenting financial creditors would be entitled to receive
    21.65 percent of the value of their admitted debt which would be
    paid in priority to any payment to the assenting financial creditors.
37. Clause 3.2(xii)(A) is relevant. It says that notwithstanding what is
    contained in the mandatory contents of the resolution plan, upon
    approval of the resolution plan by the NCLT under Section 31 of the
    IBC, on and from the effective date all pending proceedings relating
    to the winding up of the company i.e. the corporate debtor shall stand
    irrevocably and unconditionally abated in perpetuity and claims in
    connection with all violation or breach of any agreement by the corporate
    debtor shall be settled at nil value at par with operational creditors.
38. Clause 3.4 provides for a proposal for operational creditors (excluding
    employees and workmen). Sub-clause (ii) says that since the liquidation
    value is not sufficient to cover the debts of the financial creditors in
    full, therefore, the liquidation value of the operational creditors or the
    other creditors etc. was taken as nil. Thus nil payment was proposed
    under the resolution plan towards claims of operational creditors
    whether filed or not, whether admitted or not and whether or not set
    out in the provisional balance sheet or the list of creditors etc. Thus,
    no source was identified for such payment under the resolution plan.
[2025] 4 S.C.R.                                                       1393

        Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                       Ispat Carrier Private Limited

39. Heading of Clause 3.8 is treatment of amounts claimed under
    ongoing litigations. Clause 3.8(i) states that all claims arising out of
    enquiries, investigations, notices, causes of action, suits, litigations,
    arbitrations, claims of the top 30 operational creditors against the
    corporate debtor in relation to any period prior to the effective date
    etc. shall be settled at nil.
40. The resolution plan as submitted by Vedanta Ltd. was examined by
    NCLT and by order dated 17.04.2018 approved the same. It was
    mentioned in the said order that the resolution plan had the approval
    of the committee of creditors with a voting share of 100 percent. It
    was clarified that the moratorium order passed under Section 14
    IBC would cease to have effect as the approved resolution plan had
    come into force with immediate effect. Adjudicating authority i.e. NCLT
    declared that the approved resolution plan would be binding on the
    corporate debtor, its employees, members, creditors, coordinators
    and stakeholders involved in the resolution plan.
41. Reverting back to the proceedings before the Facilitation Council,
    it is seen that on 16.05.2018, Facilitation Council noted that the
    moratorium period of the corporate insolvency resolution process
    had expired. The buyer did not appear in the conciliation process
    as well as in the arbitration proceeding. Thereafter, the Facilitation
    Council passed the award dated 06.07.2018 holding that claim of
    the respondent was genuine. The buyer unit was liable to pay the
    outstanding amount of Rs. 1,59,09,214.33 with interest at the rate
    of 3 times of the prevailing bank rate.
42. At this stage, we may mention that respondent did not challenge
    the resolution plan before the NCLAT or before any other forum.
    On the other hand, a number of other operational creditors had
    challenged the order of the NCLT dated 17.04.2018 before the
    NCLAT in Company Appeal (AT) (Insolvency) No. 175 of 2018.
    However, the said appeal was dismissed on 10.08.2018. Similar
    appeal being Company Appeal (AT) (Insolvency) No. 265 of 2018
    was also dismissed by the NCLAT vide the order dated 20.08.2018.
    These orders were challenged before this Court in Civil Appeal No.
    1133 of 2019 which was dismissed on 27.11.2019.
43. The decree holder i.e. the respondent filed an execution petition before
    the Executing Court for execution of the award dated 06.07.2018. In
    the said execution proceedings being Commercial Execution Case
    No. 21/2022 (Execution Case No. 77/2018), appellant had filed
1394                                                        [2025] 4 S.C.R.

                         Supreme Court Reports


     an application for declaring the award as a nullity and hence non-
     executable in view of the resolution plan approved by the NCLT. By the
     order dated 03.03.2023, the Executing Court noted that the judgment
     debtor (appellant) had not preferred any appeal against the award
     dated 06.07.2018. Instead of filing such an appeal, appellant had filed
     application dated 14.05.2019 for dismissing the execution proceedings
     on the ground that the award passed by the Facilitation Council was
     illegal and non est in the eye of law. Since the appellant did not file
     any application under Section 34 of the 1996 Act, the Executing Court
     dismissed the application of the appellant dated 14.05.2019 observing
     that the appellant was trying to deprive the decree holder of the fruits
     of the award by unnecessarily delaying the execution.
44. This order came to be challenged by the appellant before the High
    Court in a proceeding under Article 227 of the Constitution of India.
    We have already noted the three issues framed by the High Court
    for consideration. In so far the first issue is concerned, High Court is
    of the view that an award can be challenged in a proceeding under
    Section 47 CPC on the very limited ground of the award being a
    nullity or void ab intio or suffering from inherent lack of jurisdiction.
    However, the High Court opined that if an aggrieved party does
    not challenge an award under Section 34 of the 1996 Act, it cannot
    be permitted to object to its execution by alleging it to be a nullity
    though such a plea of nullity can be entertained if it is of such a grave
    nature that it is not even capable of being waived by one or the other
    party. Therefore, High Court concluded that the plea of nullity qua
    an arbitral award can be raised in a proceeding under Section 47
    CPC but such a challenge would lie within a very narrow compass.
45. In so far the second issue is concerned, High Court rejected the
    contention of the appellant that since the award suffered from patent
    or inherent lack of jurisdiction, objection to the award can be taken at
    the stage of execution without challenging the award under Section
    34 of the 1996 Act. While rejecting the said contention, High Court
    held that the arbitral proceedings culminating in the award cannot
    be said to be suffering from inherent lack of jurisdiction.
46. As regards issue No. 3, High Court examined as to how the claim of
    the respondent was dealt with in the resolution plan. After observing
    that the respondent was not included in the top 30 operational
    creditors whose claims were settled at nil, High Court held that the
    Facilitation Council had the jurisdiction to proceed and pronounce
[2025] 4 S.C.R.                                                       1395

        Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                       Ispat Carrier Private Limited

     the award even after approval of the resolution plan. The arbitral
     proceedings were initiated prior to the resolution insolvency date,
     suspended during the moratorium period and resumed upon expiry of
     the moratorium period. High Court further observed that the approved
     resolution plan did not determine the claim of the respondent as nil
     and that the proceedings before the Facilitation Council was taken
     note of in the resolution plan.
47. High Court is correct in answering the first issue that a plea of nullity
    qua an arbitral award can be raised in a proceeding under Section 47
    CPC but such a challenge would lie within a very narrow compass.
48. Section 36 of the 1996 Act deals with enforcement of arbitral awards.
    Sub-section (1) says that where the time for making any application
    to set aside an arbitral award under Section 34 has expired, then
    subject to the provisions of sub-section (2), such award shall be
    enforced in accordance with the provisions of CPC in the same
    manner as if it were a decree of the court. As per sub-section (2),
    where an application to set aside an arbitral award has been filed
    under Section 34, the filing of such an application shall not by itself
    render an award unenforceable unless an order of stay is granted
    by the court. Therefore, in terms of Section 36 of the 1996 Act, an
    award can be enforced in accordance with the provisions of CPC in
    the same manner as if it were a decree of a civil court.
     48.1. Section 47 CPC deals with questions to be determined by the
           court executing decree. As per sub- section (1), all questions
           arising between the parties to the suit in which the decree was
           passed and relating to the execution, discharge or satisfaction
           of the decree shall be determined by the court executing the
           decree and not by a separate suit. Execution of decrees and
           orders is provided for in Order XXI CPC. The law is well settled
           that at the stage of execution, an objection as to executability
           of the decree can be raised but such objection is limited to
           the ground of jurisdictional infirmity or voidness. The law laid
           down by this Court in Vasudev Dhanjibhai Modi Vs. Rajabhai
           Abdul Rehman9 is that only a decree which is a nullity can be
           the subject matter of objection under Section 47 CPC and not
           one which is erroneous either in law or on facts. The aforesaid
           proposition of law continues to hold the field.


9   (1970) 1 SCC 670
1396                                                          [2025] 4 S.C.R.

                          Supreme Court Reports


49. Objection to execution of an award under Section 47 CPC is not
    dependent or contingent upon filing a petition under Section 34 of
    the 1996 Act. High Court was not justified in taking the view that
    since the appellant did not file a petition under Section 34 of the
    1996 Act, therefore, it was precluded from filing an application before
    the Executing Court to declare the award as void and hence non-
    executable.
50. In so far the second and third issues are concerned, it is by now
    well settled that once a resolution plan is duly approved by the
    adjudicating authority under sub-section (1) of Section 31, all claims
    which are not part of the resolution plan shall stand extinguished
    and no person will be entitled to initiate or continue any proceeding
    in respect to a claim which is not part of the resolution plan. In
    fact, this Court in Essar Steel India Ltd. (supra) had categorically
    declared that a successful resolution applicant cannot be faced with
    undecided claims after the resolution plan is accepted. Otherwise,
    this would amount to a hydra head popping up which would throw
    into uncertainty the amount payable by the resolution applicant. In
    so far the resolution plan is concerned, the resolution professional,
    the committee of creditors and the adjudicating authority noted about
    the claim lodged by the respondent in the arbitration proceeding.
    However, the respondent was not included in the top 30 operational
    creditors whose claims were settled at nil. This can only mean that
    the three authorities conducting the corporate insolvency resolution
    process did not deem it appropriate to include the respondent in the
    top 30 operational creditors. If the claims of the top 30 operational
    creditors were settled at nil, it goes without saying that the claim
    of the respondent could not be placed higher than the said top 30
    operational creditors. Moreover, the resolution plan itself provides
    that all claims covered by any suit, cause of action, arbitration etc.
    shall be settled at nil. Therefore, it is crystal clear that in so far claim
    of the respondent is concerned, the same would be treated as nil at
    par with the claims of the top 30 operational creditors.
     50.1. Lifting of the moratorium does not mean that the claim of the
           respondent would stand revived notwithstanding approval of
           the resolution plan by the adjudicating authority. Moratorium
           is intended to ensure that no further demands are raised or
           adjudicated upon during the corporate insolvency resolution
           process so that the process can be proceeded with and
[2025] 4 S.C.R.                                                         1397

          Electrosteel Steel Limited (Now M/s ESL Steel Limited) v.
                         Ispat Carrier Private Limited

              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 47 CPC. 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 47 of CPC is wholly unsustainable.
51. Consequently, the view taken by the High Court that notwithstanding
    approval of the resolution plan by the NCLT, the Facilitation Council
    did not lose jurisdiction to proceed and pronounce the arbitral award,
    is erroneous and contrary to the law laid down by this Court.
52. In that view of the matter, we have no hesitation to hold that upon
    approval of the resolution plan by the NCLT, the claim of the
    respondent being outside the purview of the resolution plan stood
    extinguished. Therefore, the award dated 06.07.2018 is incapable of
    being executed. Consequently, the order dated 03.03.2023 passed by
    the Presiding Officer, Commercial Court/District Judge-1, Bokaro in
    Commercial Execution Case No. 21 of 2022 (Execution Case No. 77
    of 2018) is hereby set aside. Execution proceedings in Commercial
    Execution Case No. 21 of 2022 (Execution Case No. 77 of 2018)
    pending in the Court of Presiding Officer, Commercial Court/District
    Judge-1, Bokaro, are hereby quashed. Resultantly, impugned order
    of the High Court dated 17.07.2023 is also set aside.
53. Appeal is accordingly allowed. However, there shall be no order as
    to cost.

     Result of the case: Appeal allowed.



     †
         Headnotes prepared by: Ankit Gyan