TMI Blog2020 (12) TMI 1021X X X X Extracts X X X X X X X X Extracts X X X X ..... on proceeding before an executing court having competent jurisdiction. It is equally settled and the time tested proposition that the executing court cannot travel beyond the decree - In the facts of this case, the arbitral award having acquired the character of decree and having been crystallised, the beneficiary of the said award, namely, the respondents award-holders had every right to institute as many as execution proceedings in all possible manners to execute the award until the same is satisfied in its favour. Therefore, the filing of the execution proceeding by the respondents award-holders for execution of the said award is just, proper, lawful and valid. In the present case, the respondents whole-heartedly embrace the order dated March 16, 2009 passed by the appellate court here. There is no impediment to the respondents being permitted to collect the money and receive the same on their undertaking to abandon the appeal. The red herring that has been shown by the appellants herein is the failure on the part of the respondents to lodge a claim pursuant to the advertisement being issued in the insolvency proceedings. Indeed, the respondents could not have lodged any c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court and the present appeal is being disposed of subject to such undertaking. 3. The first appellant is successor-in-interest of an insolvent company, the second appellant, whose assets in effect been purchased by the first appellant in an insolvency proceeding. The respondents lent and advanced money to the second appellant from time to time. The agreement between the parties envisaged the loan to carry interest @ of 28% per annum with quarterly rests. The agreement further provided that in lieu of the money due being paid to the respondents, the second appellant being the debtor company would hand over certain constructed flats at 30, Shakespeare Sarani, Kolkata-700017 (hereinafter referred to as the said property). The second appellant was to complete the construction on the said property and hand over the flats on or before March 31, 2000. If the second appellant failed to construct the flats within the said period it was to refund the amount to the respondents. The second appellant failed to discharge its obligation in terms of the said agreement. 4. An arbitral reference was commenced by the respondents herein which culminated into an award dated December 8, 2000, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the Registrar, Original Side, who then was directed to invest the said sum in a short term fixed deposit with the State Bank of India, main branch, Kolkata and to keep it renewed until further order. 10. By a judgment and order dated July 11, 2008 the Executing Court was pleased to disposed of the execution proceedings inter alia directing the second appellant to convey the said property in favour of the respondents or their nominee or nominees. The said judgment and order dated July 11, 2008 was subsequently set aside by the judgment and order dated March 16, 2009 passed by the Appellate Court. Thus, the claim of the respondents award-holders was found to have crystallised in the money deposited in the executing court. 11. The second appellant accepted the said judgment and order of the Appellate Court dated March 16, 2009 whereas the respondents award-holders preferred a special leave petition being Special Leave Petition (Civil) No.11740-11742 of 2009 (hereinafter referred to as the said special leave petition) wherein leave was granted on January 20, 2010 by the Supreme Court. 12. The respondents award-holders on or about July 10, 2019 took out a master Summons bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... right over and above the said awarded dues which was deposited with the Registrar, Original Side by the second appellant. The provisions of IBC has a prevailing effect over the said awarded/decretal claim of the respondents, no direction could be made to hand over the said sum to the respondents. Thus, the order under the appeal is illegal, bad in law and is not sustainable and should be set aside. 15. Mr. Mookherjee referred to the various provisions from the Bankruptcy Code in support of his above contention. He referred to the definition of claim as defined under IBC and submitted that a claim is a right of payment, whether or not such right is reduced to judgment, secured or unsecured. The said definition also includes even a disputed claim. The submission was made that in view of the operation of Section 13 of the Bankruptcy Code immediately after admission of an application filed for resolution process before the adjudicating authority it is the duty of the such adjudicating authority to declare a moratorium for the purposes referred to in Section 14 of the said Bankruptcy Code. The moratorium is declared to give reliefs to the corporate debtor being the second appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and willing to accept or receive the awarded sum. Therefore, the respondents subsequent to the approval of the resolution plan under the Bankruptcy Code relating to the second appellant, could not and cannot enforce its claim under the said award against the second appellant once they had failed to lodge their claim in the insolvency proceeding. 18. Mr. Mookherjee then placed reliance on the dictum of the Supreme Court in the matter of Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta reported at (2019) SCC Online SC 1478, emphasising on paragraph 88, he submitted that a successful resolution applicant cannot suddenly be faced with undecided claims after the resolution plan submitted by him has been accepted, this would militate against the rationale of Section 31 of the Bankruptcy Code. He submitted that 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. 19. Mr. Mookherjee then placed reliance on a further dictum of the Supreme Court in the matter of P.S.L. Ramanath ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he award-holder to the satisfaction of the award, when the said awarded claim was not a part of the resolution process of the award-debtor, after the resolution plan is approved by the relevant adjudicating authority under the provisions of the said IBC. 23. It is an admitted position that pursuant to the award made in December 2007 by the Arbitral Tribunal which is a deemed decree within the meaning of the Arbitration and Conciliation Act, 1996 remained unsatisfied at the end of the second appellant, who is the award-debtor. The respondents award-holders were compelled to apply for execution of the same and initiated the execution proceeding before the executing court in terms of Order XXI of the Civil Procedure Code against the second appellant. The second appellant being the award-debtor also applied before the executing court and prayed for necessary direction to deposit the money claim under the award payable to the respondents. Such an Act on the part of the second appellant was completely in terms of and in conformity with the provision laid down under sub-rule (1)(a) of Rule 1 of Order XXI of the Code of Civil Procedure and amounts to an unequivocal acceptance of the awa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sum under the award. The mere release of the awarded sum in favour of the respondents award-holders by encashing the fixed deposits is nothing but a ministerial act. The moment the second appellant had deposited the awarded sum with the executing court in terms of Order XXI, Rule 1, sub-rule (1)(a) of the Civil Procedure Code the right on the said amount under a crystallised award or decree had passed in favour of its beneficiary, namely, the respondents herein. The deposit was made by the award-debtor second appellant in 2007 whereas the Bankruptcy Code was promulgated as late as in 2016. It is, therefore, cannot be contended that in view of the operation and intervention of the Bankruptcy Code relating to the second appellant, the respondents award/decree-holders cannot claim any right over the said awarded sum. 27. The legal effect of the appellate order of this court of March 16, 2009 is that it found that the award stood satisfied upon the payment into court by the award-debtor of the amount of ₹ 13,38,31,477.30/- on or about September 14, 2007. In the special leave petition, and the resultant appeal upon leave being granted, the respondents herein sought to assert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... award took place way back in 2007 which is much prior in point of time than the Bankruptcy Code was even promulgated far to speak of approval of the resolution plan relating to the second appellant by the relevant adjudicating authority under the Bankruptcy Code. The right in respect of the said awarded sum had already passed in favour of the respondents award-holders under the way back in 2007. As such there was no requirement on the part of the respondents to lodge its claim in the resolution process of the second appellant under the provisions of the Bankruptcy Code to the extent of the sum already deposited by the second appellant with the executing court under the award with whatever accretion thereupon. 31. The ratio decided by the Supreme Court in the matter of Essar Steel India Limited (supra) has no application in the facts and circumstances of the case. In the facts of the said judgment the subject claims against Essar Steel was never discharged or satisfied as in the instant case discussed above before the resolution plan was approved relating to the Essar Steel by the relevant adjudicating authority. In the present case, as discussed above, the claim against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inable, and devoid of any merit and as such the same is dismissed with costs assessed at ₹ 50,000/-. 35. The Registrar, Original Side is further directed to carry out the directions of the executing Court made in its order dated February 18, 2020 which was subsequently corrected by an order dated February 24, 2020 immediately upon the communication being received in writing from the respondent s advocate on record that the appeal arising from the said SLP has been withdrawn in terms of their undertaking given to both the executing court as well as this court. 36. It is further made clear until appeal arising from the said SLP is not withdrawn by the respondents and the same is properly communicated with the Registrar, Original Side, none of the orders namely the orders passed by the executing court dated February 18, 2020 and February 24, 2020 and this order will operate. 37. APO 39 of 2020 along with IA No. GA 1 of 2020 are disposed of. 38. Urgent certified website copies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities. (Aniruddha Roy, J.) I agree. (Sanjib Banerjee, J.) Later: A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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