M/S Fabtech Works & Constructions Pvt. ... vs Zillion Infraprojects Private Limited
- CitationCompany Appeal (AT) (Insolvency) No. 2194 of 2024
Ratio decidendi
The rule this decision rests on
A prior order of the Adjudicating Authority that disposes of an application as not surviving for adjudication, without deciding it on the merits, is not an adjudication of the issues raised in that application and does not operate as res judicata on them. A party's contention that a change in the law after an earlier order cannot affect its rights is rejected where the earlier order was not a merits decision on the point, and where the Supreme Court's pronouncement is a declaration of the law as it always stood rather than a change in the law. Under the Insolvency and Bankruptcy Code, no proceeding, including arbitration proceedings, may continue against the Corporate Debtor while the moratorium under Section 14 is in operation, as laid down by the Supreme Court in P. Mohan Raj v. Sah Brothers Ispat Pvt. Ltd.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Fabtech Works & Construction Pvt. Ltd. ...Appellant
Versus
Zillion Infraprojects Pvt. Ltd. Through Harish Taneja, RP ...Respondent
Present: For Appellant : Mr. Krishan Kumar, Mr. S. K. Garg and Mr. Ninin Pal, Advocates
For Respondent :
ORDER
(Hybrid Mode)
05.12.2024 Heard Learned Counsel for the parties.
This appeal has been filed against the order dated 15.10.2024 which
has been passed by National Company Law Tribunal, Bench-VI, New Delhi by
which application filed by the Resolution Professional to stay the further
proceeding in the arbitration against the Corporate Debtor has been allowed.
Learned Counsel for the Appellant challenging the order submits that
the issue pertaining to continuance of arbitration was already decided by
Adjudicating Authority on 05.12.2019 in CA No. 1750/PB/2019. He submits
that the fact is that the arbitration proceeding continued thereafter for several
years and the said direction was prior to change of law as has been noticed
by Adjudicating Authority.
We have considered submission of Counsel for the Appellant and
perused the record. The order dated CA 1750/PB/2019 on 05.12.2019 is as
follows:
"ORDER CA-1750(PB)/2019 The issue raised in the present proceedings is for continuation of arbitration proceedings initiated by M/s Fab-Tech Works & Constructions Pvt. Ltd. and there is a counter claim filed by the corporate debtor. The CoC in its tenth meeting dated
06.11.2019 has resolved for continuation of arbitration proceedings for claim and counter claim in the arbitration matter of M/s. Fab- Tech Works & Construction. The resolution passed on that date refers to earlier resolution dated 25.006.2019 which was carried by 75.62% voting share in its fifth meeting. Accordingly, CA-1750(PB)/2019 would not survive for adjudication as the CoC has permitted the continuation of the arbitration proceedings. However, we make it clear that award shall not be executed during the period of moratorium under Section 14 of the Insolvency & Bankruptcy Code.
CA-1750(PB)/2019 stands disposed of.
CA-2237(PB)/2019 There are precedents to support the prayer made in this application which have not been cited before us. Mr. Chaurasia, Ld. Counsel for the RP shall produce the same on the next date of hearing.
List on 07.01.2020.
CA-2358(PB)/2019 Reply by non applicant-respondent No. 16 is on record. Other served non applicant-respondent may file their reply with a copy in advance to the counsel for the RP within ten days with a copy in advance to the counsel opposite. The served respondent who are not represented are proceeded exparte. List for further consideration on 07.01.2020."
Company Appeal (AT) (Insolvency) No. 2194 of 2024 2 of 3 The perusal of the said order indicate that CA 1750/PB/2019 filed by
the present appellant was not decided on merits. An Adjudicating Authority
held that CA 1750/PB/2019 would not survive for adjudication. Thus, there
was no adjudication on the said application. The submission of the Appellant
that change of law shall not effect rights of the appellant also cannot be
accepted. The Hon'ble Supreme Court in P. Mohan Raj Vs. Sah Brothers
Ispat Pvt. Ltd. 2021 (6) SCC 218 had laid down that no proceeding can
continue against the Corporate Debtor during the moratorium period. It is not
disputed that moratorium is still in operation. The judgment of the Hon'ble
Supreme Court is declaration of law and cannot be accepted as any change
of law. We thus, do not find any merit in submission of the Appellant. There
is no merit in this Appeal. Appeal is dismissed.
[Justice Ashok Bhushan] Chairperson
[Arun Baroka] Member (Technical) pks/nn
Company Appeal (AT) (Insolvency) No. 2194 of 2024 3 of 3
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