Case Details M/s. Rps Infrastructure Ltd. vs Mukul Kumar & Anr.

Court

Supreme Court of India

Date

11 September 2023

Case No.

Civil Appeal No. 5590 of 2021

Result

Allowed

Bench

Sanjay Kishan Kaul, Sudhanshu Dhulia

Citation

[2023] 12 S.C.R. 150 : 2023 INSC 816

Issue for consideration

Whether the commercial entity’s claim pertaining to an arbitral award, in appeal u/s. 37 of the Arbitration and Conciliation Act, 1996, is liable to be included at a belated stage-after the resolution plan approved by the Committee of Creditors and pending approval by the adjudicating authority.

Headnote

Insolvency and Bankruptcy Code, 2016 – Initiation of Corporate Insolvency Resolution Process against the Corporate Debtor – Resolution plan approved by the Committee of Creditors-CoC and pending approval by the adjudicating authority – Inclusion of commercial entity’s claim pertaining to an arbitral award, in an appeal u/s. 37 after the delay of 287 days, if permissible: Held: It is difficult to release the undecided claims on the resolution applicant – Court is cautioned against allowing claims after the resolution plan has been accepted by the COC – Process followed by the resolution applicant not flawed in any manner – Public announcement of the CIRP through newspapers would constitute deemed knowledge on the entity – Commercial entity ought to have been vigilant enough to find out whether the Corporate Debtor was undergoing CIRP – Plea of not being aware of newspaper pronouncements could not be available to the entity – Mere fact that the Adjudicating Authority has yet not approved the plan does not imply that the plan can go back and forth, thereby making the CIRP an endless process – This would result in the reopening of the whole issue – Thus, NCLAT’s judgment rejecting the claim of the entity, upheld – Arbitration and Conciliation Act, 1996 – s. 37 – Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. [Paras 17-22]

LIST OF CITATIONS AND OTHER REFERENCES

Committee of Creditors of Essar Steel India Limited through Authorised Signatory v. Satish Kumar Gupta and Ors. (2020) 8 SCC 534 – relied on. Brilliant Alloys Private Limited v. Mr. S. Rajagopal & Ors. (2022) 2 SCC 544; State Tax Officer v. Rainbow Papers Limited 2022 SCCOnline SC 1162; Paschimanchal Vidyut Vitran Nigam Ltd. v. Raman Ispat Pvt. Ltd. & Ors. 2023 SCC OnLine SC 842 – referred to.

OTHER CASE DETAILS INCLUDING IMPUGNED

ORDER AND APPEARANCES

JUDGMENT / ORDER OF THE SUPREME COURT JUDGMENT SANJAY KISHAN KAUL, J. Factual Background 1. An agreement was entered into on 02.08.2006 between the appellant and M/s KST Infrastructure Private Limited (hereinafter referred to as ‘the Corporate Debtor’), for development of land licensed with the appellant admeasuring 8 acres into a residential group housing complex at Faridabad, Haryana. However, the appellant, being aggrieved by the Corporate Debtor’s alleged misconduct in advertising the project under its own name and without mentioning the name of the appellant, sought reference to arbit

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