Mcnally Bharat Engineering Company Limited vs Metso India Pvt. Ltd.

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment reserved on: 24.07.2026
Judgment pronounced on: 03.08.2026

+ O.M.P. (COMM) 362/2018, I.A. 11178/2018, I.A. 33271/2024
I.A. 19620/2025 & I.A. 30842/2024
MCNALLY BHARAT ENGINEERING COMPANY
LIMITED .....Petitioner
Through: Mr. Gopal Jain, Sr. Adv. with
Mr. Udian Sharma, Mr. Sahil
Saraswat, Mr. Prabal Pratap
Singh, Ms. Harsha Sadhwani,
Mr. Manav Mitra & Ms. Kriti
Sharma, Advs.
versus

METSO INDIA PVT. LTD. .....Respondent
Through: Mr. Sumant Batra, Mr. Nitin
Khare, Mr. Abhishek Kumar,
Ms. Riya Arora, Mr. Sarthak
Bhandari, Ms. Hemlata Rawat,
Mr. Abhay Singh & Mr.
Saurabh, Advs.
CORAM:
HON'BLE MR. JUSTICE AVNEESH JHINGAN
J U D G M E N T
1. This petition is filed under Section 34 of the Arbitration and
Conciliation Act, 1996 (for short „the Act‟) impugning the arbitral
award dated 05.05.2018. During the pendency of the petition, the
petitioner filed an application (I.A. 30842/2024) seeking dismissal of
the petition under Section 34 of the Act having rendered infructuous
and seeking refund of the amount deposited pursuant to the order
dated 23.08.2018 of this court. The prayers are reproduced below:
Signature Not Verified
O.M.P. (COMM) 362/2018
Page 1 of 19
Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

“i. Releasing the sum of INR 5,52,30,693/-
(Indian Rupees Five Crore Fifty-Two Lakh Thirty
Thousand Six Hundred Ninety-Three only), deposited
by the Petitioner vide an FDR dated April 03, 2021 of
Bank of India issued in the name of „Registrar
General, High Court of Delhi‟ prepared from the bank
account No. 404445110003480, LCB Branch,
Kolkata along with interest accrued thereon;
ii. Dismissing the present petition, being O.M.P.
(COMM) 362 of 2018 and the corresponding
enforcement proceedings initiated by the Respondent
herein, being O.M.P.(ENF.)(COMM) No. 270 of
2018 as infructuous by operation of law;
iii. Pass such other and further orders as this
Hon'ble Court may deem fit and proper in the facts
and circumstances of the present case.”

2. The brief facts are that the Bharat Heavy Electrical Ltd. (for
short „BHEL‟) invited bids for two barrel type blender reclaimers. The
petitioner, M/s McNally Bharat Engineering Company Limited (for
short „MBECL‟) had an agreement with the Metso India Private
Limited (hereinafter referred to as „respondent‟) for providing
information through techno commercial offer for enabling MBECL to
bid for notice inviting tender issued by BHEL. In turn it was agreed
that MBECL shall sub-contract the work to the respondent. MBECL
was the successful bidder and was awarded the work. On 12.07.2011,
the agreement was entered between MBECL and the respondent for
design, manufacture, supply and supervision of erection and
commissioning of two barrel type blender reclaimers. On failure of the
parties to resolve the differences, MBECL terminated the agreement
on 21.11.2011.
Signature Not Verified
O.M.P. (COMM) 362/2018
Page 2 of 19
Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

2.1 The agreement provided for dispute resolution through
arbitration and the respondent invoked arbitration on 05.12.2011 by
issuing notice under Section 21 of the Act. The proceedings
culminated in the impugned award dated 05.05.2018. The claim of the
respondent to the tune of Rs.5,52,00,000/- (Rupees five crore fifty two
lakh only) was accepted and post award interest @ 12% p.a. was
awarded. MBECL challenged the award by filing a petition under
Section 34 of the Act.
2.2 This court vide order dated 23.08.2018 directed MBECL to
deposit the awarded amount as a condition for stay of the execution of
the award. On 01.09.2021, the directions of this court were complied
with and the awarded amount was deposited in the form of a Fixed
Deposit Receipt (for short „FDR‟) in the name of Registrar General of
this court. On 29.04.2022, MBECL was admitted to the Corporate
Insolvency Resolution Process (for short „CIRP‟) proceedings by the
National Company Tribunal, Kolkata. The Resolution Professional
(RP) issued public notice on 07.05.2022 and the Resolution Plan (for
short „plan‟) submitted by BTL EPC Limited was approved on
19.12.2023. MBECL on 22.05.2024 filed an application seeking
refund of the amount deposited. On 11.07.2024, the respondent filed
an application for withdrawal of the deposited amount.
3. Learned senior counsel for the petitioner contended that after
approval of the plan, the claim of the respondent in pursuance to the
award no longer survives and the petition under Section 34 of the Act
is rendered infructuous. The submission is that the respondent failed
to submit the claim to the RP and the rights stand extinguished. The
Signature Not Verified
O.M.P. (COMM) 362/2018
Page 3 of 19
Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

prayer is that the amount deposited be ordered to be refunded.
Reliance is placed upon the decisions of the Bombay High Court in
Reliance Naval and Engineering Ltd. v. M/s Afcons Infrastructure
Ltd ., 2025 SCC OnLine Bom 6082 and Garden Silk Mills Limited
v. Gayatri Industries and Ors ., 2025 SCC OnLine Bom556.
4 . Per contra , consequent to MBECL depositing the awarded amount
before this court no claim was required to be made before the RP and
the deposit of the awarded amount is payment to the respondent. To
buttress the contention that the deposit of the amount in court
tantamounts to payment to the judgment creditor, reliance is placed on
the decision of the Supreme Court in Himachal Pradesh Housing
and Urban Development Authority & Anr. v. Ranjit Singh Rana ,
2012 4 SCC 505, of this court in M/s Ramacivil India Constructions
Private Limited v. Union of India 2024:DHC:5343 and of the
Division Bench of the Bombay HC in Reliance Communication
Limited v. Rajendra P. Bansal , 2023 SCC OnLine Bom 33 dated
04.01.2023 in interim application no.1161/2020 in first appeal
no.1539/2012.
4.1 The argument is that the amount deposited in this court was not
reflected as an asset in the balance sheet of MBECL. Further that in
violation of Section 29 of the Insolvency and Bankruptcy Code, 2016
(for short „IBC‟) the deposited amount was not shown in the
Information Memorandum prepared by the RP. It is contended that
under Section 18 of the IBC, RP was required to take control and
custody of the assets of the corporate debtor, however no application
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Page 4 of 19
Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

was filed for refund of the deposited amount. Submission is that if the
amount deposited was taken into consideration while approving the
plan, it would have gone to the creditors and now cannot be refunded
to MBECL. The grievance is that the respondent was neither named in
the list of creditors nor was a party to the CIRP proceedings.
5. The undisputed facts are that during the pendency of the
petition under Section 34 of the Act, MBECL was admitted to CIRP
proceedings and the plan was approved. The respondent had not made
claim before RP of the amount awarded in the impugned award.
6. Before proceeding further, it would be apposite to reproduce the
following sections of IBC-
“3. Definitions. —In this Code, unless the context
otherwise requires,—
(6) “claim” means—
(a) a right to payment, whether or not such right is
reduced to judgment, fixed, disputed, undisputed, legal,
equitable, secured or unsecured;
(b) right to remedy for breach of contract under any law
for the time being in force, if such breach gives rise to a
right to payment, whether or not such right is reduced to
judgment, fixed, matured, unmatured, disputed,
undisputed, secured or unsecured;
(10) “creditor” means any person to whom a debt is owed
and includes a financial creditor, an operational creditor, a
secured creditor, an unsecured creditor and a decree-
holder;
(11) “debt” means a liability or obligation in respect of a
claim which is due from any person and includes a
financial debt and operational debt;”
“29. Preparation of information memorandum.—( 1)
The resolution professional shall prepare an information
Signature Not Verified
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Page 5 of 19
Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

memorandum in such form and manner containing such
relevant information as may be specified by the Board for
formulating a resolution plan.
(2) The resolution professional shall provide to the
resolution applicant access to all relevant information in
physical and electronic form, provided such resolution
applicant undertakes—
(a) to comply with provisions of law for the time being in
force relating to confidentiality and insider trading;
(b) to protect any intellectual property of the corporate
debtor it may have access to; and
(c) not to share relevant information with third parties
unless clauses (a) and (b) of this sub-section are complied
with.
Explanation.— For the purposes of this section, “relevant
information” means the information required by the
resolution applicant to make the resolution plan for the
corporate debtor, which shall include the financial position
of the corporate debtor, all information related to disputes
by or against the corporate debtor and any other matter
pertaining to the corporate debtor as may be specified.”
“31. Approval of resolution plan .—(1) If the
Adjudicating Authority is satisfied that the resolution plan
as approved by the committee of creditors under sub-
section (4) of section 30 meets the requirements as referred
to in sub-section (2) of section 30, it shall by order approve
the resolution plan which shall be binding on the corporate
debtor and its employees, members, creditors, [including
the Central Government, any State Government or any
local authority to whom a debt in respect of the payment of
dues arising under any law for the time being in force,
such as authorities to whom statutory dues are owed,]
guarantors and other stakeholders involved in the
resolution plan.
[Provided that the Adjudicating Authority shall, before
passing an order for approval of resolution plan under this
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Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

sub-section, satisfy that the resolution plan has provisions
for its effective implementation.]
(2) Where the Adjudicating Authority is satisfied that the
resolution plan does not confirm to the requirements
referred to in sub-section (1), it may, by an order, reject the
resolution plan.
(3) After the order of approval under sub-section (1), —
(a) the moratorium order passed by the Adjudicating
Authority under section 14 shall cease to have effect; and
(b) the resolution professional shall forward all records
relating to the conduct of the corporate insolvency
resolution process and the resolution plan to the Board to
be recorded on its database.
(4) The resolution applicant shall, pursuant to the
resolution plan approved under sub-section (1), obtain the
necessary approval required under any law for the time
being in force within a period of one year from the date of
approval of the resolution plan by the Adjudicating
Authority under sub-section (1) or within such period as
provided for in such law, whichever is later:
Provided that where the resolution plan contains a
provision for combination, as referred to in section 5 of the
Competition Act, 2002 (12 of 2003), the resolution
applicant shall obtain the approval of the Competition
Commission of India under that Act prior to the approval
of such resolution plan by the committee of creditors.”


7. Section 3(6) of the IBC defines „claim‟ and includes a right to
payment, whether or not such right is reduced to judgment. The
creditor as per Section 3(10) of the IBC is a person to whom the debt
is owed. Section 3(11) of the IBC defines debt to be an obligation in
respect of the claim.
8. The amount due to the respondent was reduced to writing in the
impugned award and was a claim. MBECL owed the debt and the
respondent was the creditor. The respondent failed to raise the claim
Signature Not Verified
O.M.P. (COMM) 362/2018
Page 7 of 19
Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

before RP, in terms of Regulations 7 and 12 of Chapter IV of the
Insolvency and Bankruptcy Board of India (Insolvency Resolution
Process for Corporate Persons) Regulation, 2016.
9. Section 31 of the IBC provides that an approved plan is binding
on the corporate debtor, its employees, members and creditors to
whom a debt was due. The Supreme Court in Ghanashyam Mishra
and Sons Private Limited v. Edelweiss Asset Reconstruction
Company Limited , (2021) 9 SCC 657 held that provision of Section
31 of the IBC was necessitated for revival of the corporate debtor and
to make it a running concern. The decision in Committee of
Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta &
Ors. , (2020) 8 SCC 531 was considered wherein the concept that after
approved plan corporate debtor starts with a fresh slate was laid. It
was factored that if after approval of a plan the corporate debtor faces
an undecided claim, it would remain in uncertainty. It was further held
that the claims which do not form part of the approved plan shall stand
extinguished and cannot thereafter be initiated or continued. It would
be fruitful to reproduce the relevant paragraphs of the judgment-
“65. Bare reading of Section 31 of the I&B Code would also
make it abundantly clear that once the resolution plan is
approved by the adjudicating authority, after it is satisfied,
that the resolution plan as approved by CoC meets the
requirements as referred to in sub-section (2) of Section
30, it shall be binding on the corporate debtor and its
employees, members, creditors, guarantors and other
stakeholders. Such a provision is necessitated since one of
the dominant purposes of the I&B Code is revival of the
corporate debtor and to make it a running concern.
*
Signature Not Verified
O.M.P. (COMM) 362/2018
Page 8 of 19
Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

68. All these details are required to be contained in the
information memorandum so that the resolution applicant
is aware as to what are the liabilities that he may have to
face and provide for a plan, which apart from satisfying a
part of such liabilities would also ensure, that the corporate
debtor is revived and made a running establishment. The
legislative intent of making the resolution plan binding on
all the stakeholders after it gets the seal of approval from
the adjudicating authority upon its satisfaction, that the
resolution plan approved by CoC meets the requirement as
referred to in sub-section (2) of Section 30 is that after the
approval of the resolution plan, no surprise claims should
be flung on the successful resolution applicant. The
dominant purpose is that he should start with fresh slate on
the basis of the resolution plan approved.
69. This aspect has been aptly explained by this Court
in Essar Steel (India) Ltd. (CoC) [ Essar Steel (India) Ltd.
(CoC) v. Satish Kumar Gupta , (2020) 8 SCC 531 : (2021)
2 SCC (Civ) 443] : (SCC p. 616, para 107)
“ 107 . For the same reason, the
impugned N CLAT judgment in Standard Chartered
Bank v. Satish Kumar Gupta [ Standard Chartered
Bank v. Satish Kumar Gupta , 2019 SCC OnLine NCLAT
388] in holding that claims that may exist apart from those
decided on merits by the resolution professional and by the
adjudicating authority/Appellate Tribunal can now be
decided by an appropriate forum in terms of Section 60(6)
of the Code, also militates against the rationale of Section
31 of the Code. A successful resolution applicant cannot
suddenly be faced with “undecided” claims after the
resolution plan submitted by him has been accepted as this
would amount to a hydra head popping up which would
throw into uncertainty amounts payable by a prospective
resolution applicant who would successfully take over the
business of the corporate debtor. 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
Signature Not Verified
O.M.P. (COMM) 362/2018
Page 9 of 19
Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

the business of the corporate debtor. This the successful
resolution applicant does on a fresh slate, as has been
pointed out by us hereinabove. For these
reasons, N CLAT judgment [ Standard Chartered
Bank v. Satish Kumar Gupta , 2019 SCC OnLine NCLAT
388] must also be set aside on this count.”
*
74. As such, with respect to the proceedings, which arise
after 16-8-2019, there will be no difficulty. After the
amendment, any debt in respect of the payment of dues
arising under any law for the time being in force including
the ones owed to the Central Government, any State
Government or any local authority, which does not form a
part of the approved resolution plan, shall stand
extinguished.
*
102. In the result, we answer the questions framed by us as
under:

102.1. That once a resolution plan is duly approved by the
adjudicating authority under sub-section (1) of Section 31,
the claims as provided in the resolution plan shall stand
frozen and will be binding on the corporate debtor and its
employees, members, creditors, including the Central
Government, any State Government or any local authority,
guarantors and other stakeholders. On the date of approval
of resolution plan by the adjudicating authority, all such
claims, which are not a part of resolution plan, shall stand
extinguished and no person will be entitled to initiate or
continue any proceedings in respect to a claim, which is
not part of the resolution plan.

102.2. The 2019 Amendment to Section 31 of the I&B
Code is clarificatory and declaratory in nature and
therefore will be effective from the date on which the I&B
Code has come into effect.

102.3. Consequently all the dues including the statutory
dues owed to the Central Government, any State
Government or any local authority, if not part of the
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Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

resolution plan, shall stand extinguished and no
proceedings in respect of such dues for the period prior to
the date on which the adjudicating authority grants its
approval under Section 31 could be continued.”

9.1 The Supreme Court in M/s Tata Steel Ltd. v. Varsha & Anr .,
2026 INSC 717 held:
“55. This Court is further of the view that no Resolution
Plan can succeed if uncertain or unquantified claims are
permitted to linger and resurface against the Successful
Resolution Applicant years after approval. Such a situation
would be akin to a hydra-headed recurrence and is
antithetical to the „clean slate‟ principle.
*
61. Consequently, upon a harmonious reading of the
Resolution Plan, this Court is of the opinion that all legal
proceedings, including arbitration and civil suits which had
not culminated in determinable, quantifiable claims by the
date of approval of the Resolution Plan by the NCLT stand
abated, extinguished, waived or withdrawn. Only
crystallised claims as on the effective date (i.e. 18th May
2018) are payable on a pro-rata basis. Accordingly, no
amount beyond Rupee One (₹1) each was payable to
Respondent No.1-Varsha and the Intervenor-Masyc, whose
pending arbitration and civil proceedings stood
abated/waived/ extinguished/withdrawn upon approval of
the Resolution Plan.”
9.2 In JSW Ispat Special Products Ltd. V. Bharat Petroresources
Ltd ., 2025 SCC OnLine Del 6869 held:
“39. It is thus clear from a conspectus of the
aforementioned judgments that all such claims, which are
not a part of the resolution plan on the date of approval,
shall stand extinguished and no person will be entitled to
initiate or continue any proceedings in respect of claims,
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Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

which are not part of the resolution plan and so much so
this would apply to the statutory dues owed to the
Central/State Governments, local bodies, etc. In the instant
case, the claims which were referred to arbitration were not
part of the approved resolution plan and stood extinguished
and were thus not arbitrable.”
9.3 In Akash Construction v. Indira Priyadarshini Hydro
Power Pvt. Ltd ., (2024) SCC OnLine Del 3602 it was held as under:
“18. The proposition of law having been crystallized that
once a successful Resolution Plan is accepted, all the
Claims against Corporate Debtor gets extinguished and
only such debts which form part of Resolution Plan would
be taken up by the Successful Resolution Applicant.
19. The question which now arises is whether the petition
under Section 34 challenging the Award, would become
not maintainable. The scheme as envisaged in IBC is that a
Notice is required to be given at various stages since the
inception of the petition till the approval of the Resolution
Plan, by the IRP. The Claims so submitted by the
Operational Creditors before the Interim Resolution
Professionals pursuant to these Public Notices, are then
considered and made into Information
Memorandum which becomes the basis for the Resolution
Applicant to submit its plan. If any other claims after the
acceptance of the Resolution Plan by the NCLT/NCLAT,
are to be permitted to be agitated, it would completely
derail the Plan submitted by the Successful Resolution
Applicant, for the simple reason that such Claims are not
in its contemplation and are beyond its assessment of the
debts.
20. The amounts as determined under the Arbitral Award
and challenged under Section 34 are also qualified
as ‘claims’ as defined under Section 3(6) of IBC. The
Award holder is, therefore, under an obligation to submit
its Claims before the Interim Resolution Professional to be
incorporated in the Information Memorandum, rather than
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Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

to wait for the adjudication of their application under
Section 34 of the Act.”
9.4 In Vijay Prakash v. Alok Industries Ltd ., (2024) SCC
OnLine Del 5068 it was held:
“24. The Supreme Court has, therefore, clarified that on
the approval of the Resolution Plan, all claims which were
not part of the Resolution Plan stand extinguished and the
plaintiff will not be entitled to initiate or continue the
proceedings in respect of such claim which is not part of
the Resolution Plan, as is the case herein.”

10. The amount awarded to the respondent under the impugned
award was not made part of the plan for failure of the respondent to
raise a claim. In view of the provisions of the IBC and the
authoritative decisions of the Supreme Court, the claim no longer
survives and stands extinguished. The petition under Section 34 of the
Act challenging the impugned award is rendered academic as the
outcome would have no bearing on revival of the claim even if the
award is upheld.
11. The issue to be determined is whether the amount deposited in
this court during the pendency of the petition under Section 34 of the
Act is to be refunded to MBECL.
12. For deciding the issue the effect of deposit of the amount in
court during the pendency of the petition under Section 34 of the Act
needs consideration.
13. The contention of learned counsel for the respondent that
deposit of the amount tantamounts to payment to the decree holder is
ill-founded. The deposit in court was a pre-condition for grant of stay
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Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
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with the object of securing the amount due to the decree holder. The
amount deposited is subject to the outcome of the challenge to the
impugned award. The deposit of the amount in the court does not
affect the ownership of the asset.
14. The matter needs to be considered from another angle that for
release of the amount the respondent has to take permission of the
court and the release may be made subject to a condition of securing
the amount. With the change in circumstances the condition of deposit
to secure the amount due can be modified by the court. There is no
vested right created in favour of the decree holder for unconditional
receipt of the amount deposited in the court. The deposit continues to
remain in the form of security.
15. The reliance placed on Himachal Pradesh Housing and
Urban Development Authority & Anr. (supra), M/s Ramacivil
India Constructions Private Limited (supra) and Reliance
Communication Limited (supra) by learned counsel for the
respondent to contend that the amount deposited in court amounts to
payment to the decree holder lacks merit. The issue in those cases was
that whether the decree holder was entitled to interest after the deposit
of amount till it is released. In this regard, the Supreme Court
observed that the word „payment‟ may have different meanings in
different contexts. The observation that deposit of amount in court is a
payment to decree holder was qua Section 37(1)(b) of the Act. The
authorities cited are not applicable to the facts of the present case.
16. The reliance placed by the learned counsel for the respondent
on the decision of the Bombay High Court in Reliance
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Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

Communication Limited (supra) does not enhance the case.
Subsequently, the Division Bench of the Bombay High Court in Siti
Networks Limited v. Rajiv Suri 2024 SCC OnLine Bom 3550 after
considering the earlier decision and the provisions of the IBC held that
the money deposited in court is an asset of the corporate debtor and
remains in the custody of the court. The relevant paragraphs read as
under-
“53. ……..it is clarified that the ruling in Rajendra
Bansal [ Reliance Communication Ltd. v. Rajendra P.
Bansal , (2023) 237 Comp Cas 30 (Bom); 2023 SCC
OnLine Bom 33.] applies only to the parties in that case,
although the statement of law as contained therein, has
been overtaken, as explained above. Since the Supreme
Court has conclusively released the ICICI guarantee in this
very case, no question of law remains for reference to any
larger Bench.
54. In the result, we hold that taking into account the
decision of the Supreme Court in respect of the ICICI
guarantee, and that too based on similar pleadings made by
the parties before the Supreme Court; and also taking into
account the provisions of the Insolvency and Bankruptcy
Code and its implications for decree-holders, the monies
deposited in this court are indeed assets under the
ownership of the applicant-appellant, with possession
being in the hands of the court. No meaningful purpose
would be served in continuing with the deposit, since even
if the appeal were to fail, the respondent would need to be
subjected to the corporate insolvency resolution process
run by the committee of creditors through the resolution
professional. If the resolution attempts fail, the
respondent's rights under the impugned judgment would be
subject to the waterfall mechanism for distribution of
liquidation proceedings, stipulated under the Insolvency
and Bankruptcy Code.
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Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

55. In the result, in view of the corporate insolvency
resolution process proceedings pending in relation to the
applicant-appellant:
(A) We hold that monies or any other asset deposited by a
corporate debtor in court prior to commencement of the
corporate insolvency resolution process by way of security
(to protect against execution of any judgment or decree),
would not cease to be the asset of the corporate debtor;
(B) Consequently, the monies deposited by the applicant-
appellant in this court constitute assets owned by the
applicant-appellant although they are not in possession of
the applicant-appellant;
(C) Therefore, we hereby permit the applicant-appellant to
withdraw Appeal No. 597 of 2016, and indeed withdraw
the amounts deposited in this court in these proceedings,
along with all earnings thereon. Refund of court fees shall
be processed as per rules;
(D) The amounts deposited in court shall be released to the
applicant-appellant within a period of two weeks from
today, subject to compliance with the procedural rules of
this court, administered by the Registry; and
(E) The substantive rights of the respondent who is the
judgment creditor under the impugned judgment shall be
subject to the provisions of the Insolvency and Bankruptcy
Code.”


17. The Bombay High Court in Reliance Naval and Engineering
Ltd. (supra) while directing refund of the deposited amount to the
corporate debtor observed as under-
“15. Based on the aforesaid provisions, in Siti Networks it
was held that the cash deposited in court by the corporate
debtor was an asset to which the corporate debtor had title,
even while such asset was held in the custody of the court.
If, pending hearing of the challenge under the court's
consideration, the corporate debtor were to be admitted to
CIRP, then during the CIRP, it was held, the assets of the
corporate debtor deserved to be conserved. Therefore, the
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Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

assets belonging to the corporate debtor were held to be
liable to be returned to the custody of the resolution
professional. If a resolution plan were to be approved, it
would abide by the approved resolution plan, and if the
resolution were to fail, the assets in question would form
part of the liquidation estate of the corporate debtor.


16. The matter in hand is far more conclusive than the
factual matrix obtaining in Siti Networks . The resolution
plan has indeed been approved and has been completed.
Possession of the asset (the cash) had been handed over to
the Court by Reliance, which later went insolvent. Before
CIRP commenced, possession of the cash was further
handed over to Afcons, taking care to ensure that Afcons
provided a bank guarantee to secure the return of the
amount so released should the need arise. This was a
discretionary equitable measure permitted by the Court,
pending and subject to the outcome in the Section 34
Petition.

17. The right to receive the amount awarded in the Arbitral
Award was nothing but a “claim” of Afcons validly held
against the debt declared as being payable by Reliance to
Afcons, the creditor. The amount owed by Reliance
(corporate debtor) to Afcons (judgment creditor) has since
been effaced by the approved Resolution Plan. Therefore,
the Section 34 Petition has been rendered infructuous.

18. Meanwhile, the amount deposited pending the hearing
of the Section 34 Petition, has been released to Afcons.
Now that the Section 34 Petition has been rendered
infructuous, there is no prospect of execution of the
Arbitral Award, and indeed the very challenge to the
Arbitral Award is redundant. Therefore, with nothing
being owed under the Arbitral Award (other than Re. 1)
the amount withdrawn by Afcons ought to be brought
back, failing which, the guarantee provided by Afcons
would need to be invoked.
*
Signature Not Verified
O.M.P. (COMM) 362/2018
Page 17 of 19
Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

23. Therefore, Afcons is directed to bring back the amount
of Rs. 12,76,91,279 to the Registry. The Respondent must
do so within a period of four weeks from the upload of this
order on the website of this Court.”

18. A similar view was taken by the Bombay High Court in
Garden Silk Mills Limited (supra) wherein it was held as under-
“21. Resultantly, the inevitable conclusion is that as
Respondent 1's claim did not form part of the resolution
plan due to failure of Respondent 1 to lodge its claim with
the resolution professional, upon approval of the resolution
plan by the National Company Law Tribunal vide order
dated 1-1-2021, the debt stood extinguished. Upon
extinguishment of debt, no right vests in Respondent 1 in
respect of the bank guarantees or to oppose the release of
bank guarantees. Consequently, the interim application
stands allowed in terms of prayer clauses ( a ) and ( b ) as
under:
“( a ) That this Court be pleased to direct that the order and
decree dated 20-1-2023 stands extinguished and no
proceeding in respect thereto can be continued and/or
initiated.
( b ) That this Court be pleased to release all bank
guarantees issued by the appellants'-banks in favour of
Registrar pursuant to the order dated 17-6-2003.”


19. The contentions that there was non compliance of Section 29 of
the IBC as the amount deposited in the court was not made part of the
information memorandum; that RP failed to discharge the duties by
not seeking refund of the deposited; that the amount deposited was not
shown as an asset in the balance-sheet of the judgement debtor; that
the respondent was neither named in the list of creditors nor was a
party to the CIRP proceedings and lastly that the amount ought to
Signature Not Verified
O.M.P. (COMM) 362/2018
Page 18 of 19
Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04

have gone to the creditors, need not be dilated upon. The grievance
against the approved plan has to be raised under the provisions of the
IBC and not in proceedings under Section 34 of the Act. Moreover,
the amount was deposited with this court to secure the amount
awarded and has been depicted as „security‟ in the balance-sheet of the
judgement debtor.
20. In view of the above discussion, the petition under Section 34 of
the Act is dismissed having rendered infructuous. The application
(I.A. 30842/2024) filed by the MBECL is allowed. The Registry is
directed to release to MBECL the amount deposited along with the
interest accrued thereon in FDR. Pending applications are also
disposed of.

AVNEESH JHINGAN, J
AUGUST 3, 2026
Ch/Vasuda
Reportable:- Yes

Signature Not Verified
O.M.P. (COMM) 362/2018
Page 19 of 19
Signed By:AWANISH
CHANDRA MISHRA
Signing Date:03.08.2026
16:57:04