Electrosteel Steel Limited (now M/s ESL Steel Limited), earlier v. Ispat Carriers Private Limited

Order

- i. Decree of nullity can be assailed in execution or co-lateral proceedings. Judgements relied are: - (a) 1964 (1) SCR 495-Ittyavira Mathai v. Varkey Varkey & Anr. (b) (2007) 2 SCC 355-Hasham Abbas Sayyad v. Usman Abbas Sayyad & Ors. (c) (1990) 1 SCC 193 Sushil Kumar Mehta V. Gobind Ram Bohra (dead) through his LRS. ii. The provisions of Insolvency and Bankruptcy Code, 2016 have overriding effect and the dues of the operational creditor including the respondent was taken as NIL. Therefore, the Facilitation Council under MSME Act lost its jurisdiction to pass any award. Judgements relied are: - (a) (2021) 9 SCC 657- Ghanshyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd. (b) (2020) 8 SCC 531-Essar Steel India Ltd. Committee of Creditors v. Satish Kumar Gupta (c) (2022) 6 SCC 343-Ruchi Soya Industries Ltd. v. Union of India and Ors. (d) (2020) 3 SCC 210-Kotak Mahindra Bank Ltd. v. Girnar Corrugators Pvt. Ltd. 3

5. Learned counsel for the petitioner has referred to internal page 26 to 32 and 55 of the resolution plan passed by the National Company Law Tribunal, Kolkata to submit that it was a conscious decision to render the operational creditors to NIL payment and the resolution proposal was finally accepted, therefore, nothing was payable to the respondent and this happened during the pendency of the matter before Facilitation Council constituted under MSME Act and consequently, the award under execution is a nullity in the eyes of law. 6. Learned counsel for the petitioner has referred to Annexure-6 of the main petition to submit that a few of the operational creditors had moved the National Company Law Appellate Tribunal, New Delhi by stating that their rights have not been duly protected, but since the resolution plan was already approved, their debt was less than 10% of the total debt, their petition was ultimately rejected. 7.

Learned counsel for the petitioner has submitted that even if the award was not challenged under section 34 of the Arbitration and Conciliation Act, 1996, objection could have been taken at the stage of its enforcement when it is sought to be enforced under section 36 of the aforesaid Act of 1996. Learned counsel for the petitioner has relied upon a judgment passed by the Hon‟ble Supreme Court reported in (2003) 8 SCC 565 para 4, to submit that it has been held by the Hon‟ble Supreme Court that the objection in connection with stamping of the arbitral award could have been raised under Section 47 of the CPC at the stage of enforcement of the award under section 36 of the Act of 1996. He has also relied upon the judgment passed by the Hon‟ble Supreme Court reported in (2022) 2 SCC 290 para 8 and also the judgment reported in (2018) 18 SCC 165 para 8 to submit that in the execution proceedings, objection under Section 47 of Code of Civil Procedure, 1908 were taken even in execution of arbitral award. He has also relied upon a judgment reported in (2017) 5 SCC 371 para 22 and 23 to submit that exercise of power under section 47 of CPC is microscopic and lies in a very narrow inspection hole and the executing court can allow objection to executability of the decree if it is found that the same is void -ab-initio and is a nullity apart from the ground that it is not capable of execution under law either because 4 the same was passed under ignorance of such provision of law or the law was promulgated making the decree un-executable after its passing. 8. The learned counsel submits that the plea of the respondent in the counter affidavit that, objection under section 47 of Code of Civil Procedure is not at all applicable to enforcement of arbitral award, is misplaced and is contrary to the fact that the Hon‟ble Supreme Court has considered a number of applications where objection under Section 47 of the CPC was filed, entertained and decided on merits but there has been no finding that the objection under section 47 of the CPC itself was not maintainable. 9. The learned counsel submits that even in the limited scope of jurisdiction, Section 47 C.P.C. application filed before the learned court below was maintainable, which was entertained, but the fact that the award was a nullity has not been duly taken care of by the learned court below. Learned counsel has also relied upon the judgment passed by the Hon‟ble Delhi High Court reported in 2017 SCC Online Delhi 7684 para 18 to submit that the provision of Section 47 of CPC having not been specifically excluded cannot be excluded through judicial interpretation. Arguments on behalf of the respondents 10. Learned counsel for the respondent has submitted considering the scope of Article 227 of the Constitution of India, the impugned order does not call for any interference. He submits that there is no illegality or perversity in the impugned order. He has referred to the judgment passed by the Hon‟ble Supreme Court