Electrosteel Steel Limited Vs Ispat Carrier Private Limited (Supreme Court of India)
Supreme Court held that arbitration proceeding culminating into award post approval of resolution plan by NCLT is not tenable in law since Facilitation Council loses its jurisdiction to proceed and pronounce arbitral award in view of approved resolution plan.
Facts- 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 filed by the appellant.
Appellant had filed application before the High Court of Jharkhand at Ranchi under Article 227 of the Constitution of India assailing the order dated 03.03.2023 passed by 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.
Conclusion- Held that 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. 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. Resultantly, impugned order of the High Court dated 17.07.2023 is also set aside.
