Capricorn Food Products India Ltd, vs Conveyor Engineering Systems

2026:MHC:839
THE HIGH COURT OF JUDICATURE AT MADRAS
Judgment reserved on : 18.02.2026 Judgment pronounced on : 27.02.2026
CORAM

THE HON'BLE MR. JUSTICE P.B.BALAJI
CRP.No.6100 of 2025
& CMP.No.30039 of 2025
M/s.Capricon Food Products Indian Limited,
Kalaguddapatti,
Kaveripattinam (Via),
Krishnagiri – 635 106.
Represented by its Authorised Signatory. .. Petitioner
Vs.
M/s.Conveyor Engineering Systems,
2/214-1, Maruthi Nagar,
Near Anjineyar Koil,
Zuzuvadi, Sipcot,
Hosur 635 216,
Krishnagiri District,
Represented by Proprietor,
Vijayalakshmi w/o Duraisamy. .. Respondent
Prayer: Civil Revision Petition filed under Section 115 of CPC, to set aside the order
dated 31.10.2025 in E.P.No.92 of 2024 in MSEFC.No.88 of 2021 passed by the
Principal District Judge, Krishnagiri and dismiss the execution petition.
https://www.mhc.tn.gov.in/judis ( Uploaded on: 02/03/2026 04:03:52 pm )

For Petitioner : Mr.T.Ravichandran
For Respondent : Mr.V.Kadhirvelu
ORDER
The respondent/judgment debtor in E.P.No.92 of 2024 is the revision petitioner.
2.I have heard Mr.T.Ravichandran, learned counsel for the revision petitioner and
Mr.B.Kadhirvelu, learned counsel for the respondent.
3.Mr.T.Ravichandran, learned counsel for the revision petitioner would attack the
order of the executing Court allowing the execution petition, without appreciating the
valid and tenable objections, with regard to the effect of the proceedings before National
Company Law Tribunal (NCLT). He would first and foremost contend that the
respondent had approached MSME Council, which passed an award for Rs.34,53,303/-
and for recovery of the said amount alone, the execution petition has been filed.
However, it is the primordial submission of Mr.T.Ravichandran that the execution
petition itself was not maintainable since the petitioner was under Corporate Insolvency
Resolution Process (CIRP) under the provisions of the Insolvency and Bankruptcy Code
(IBC), 2016. He would state that the resolution plan was also approved by the National
Company Law Tribunal, Chennai on 12-07-2023 and when the respondent had
admittedly failed to submit his claim, pending the CIRP process, the claims of the
petitioner would automatically stand extinguished. Once the resolution plan is approved
https://www.mhc.tn.gov.in/judis ( Uploaded on: 02/03/2026 04:03:52 pm )

and the new management cannot be saddled with a liability of past or extinguished and
dead claims in terms of Section 31 of the IBC.
4.The learned counsel for the revision petitioner would also invite my attention to
the portions of the order dated 12-07-2023, where the NCLT has specifically stated that
all proceedings, prior to the effective date, would stand abated, withdrawn, settled and/or
extinguished. Mr.T.Ravichandran, learned counsel would therefore state that even
though the respondent may have obtained an award from the MSME Council, in view of
the award having been passed before the approval of the resolution plan and not
recognized, the said claim becomes inexecutable and extinguished.
5.The learned counsel for the petitioner would further state that without properly
appreciating the import of the ratio laid down by the Hon’ble Supreme Court and the
decisions relied on by the learned counsel for the petitioner before the executing Court,
the executing Court has erroneously held that the insolvency proceedings cannot be a
valid defence in execution of an arbitration award. He would therefore pray for the
revision petition to be allowed. In fact, he has relied on the decision of the Hon’ble
Supreme Court in Electrosteel Limited Vs. Ispat Carrier Private Limited , reported in
2025 INSC 525 and Ghanashyam Mishra and Sons Private Limited Vs. Edelweiss Asset
Reconstruction Company Limited , reported in 2021 SCC Online SC 313.
https://www.mhc.tn.gov.in/judis ( Uploaded on: 02/03/2026 04:03:52 pm )

6.Per Contra, Mr.V.Kadhirvelu, learned counsel appearing for the respondent
would state that the petitioner has suppressed the valid award passed in the favour of the
respondent in the insolvency proceedings and therefore, the petitioner cannot take
advantage of his own wrong and contend that the claim has not been brought to the
notice of the resolution professional and it does not form part of the resolution plan. He
would also invite my attention to the exchange of emails between the parties with regard
to the payment of the award amount. He would therefore pray for dismissal of the
revision petition.
7.I have carefully considered the submissions advanced by the learned counsel on
either side.
8.No doubt, the respondent was successful in obtaining an award in its favour
before the MSME Council on 25-02-2022. However, proceedings were set in motion
before the National Company Law Tribunal, Special Bench, Chennai in IBA/386/2020
even in November 2020. An order was passed by the Tribunal, appointing an interim
resolution professional. The moratorium period under Section 14 of the IBC also kicked
in. A public notice in Form-A was also issued on 14-11-2022, following the order of the
NCLT on 13-11-2020.
https://www.mhc.tn.gov.in/judis ( Uploaded on: 02/03/2026 04:03:52 pm )

9.In fact, I find that the interim resolution professional has also sent an email to
the respondent/decree holder bringing it to its notice on 15-11-2021 that the petitioner
Company is under corporate insolvency before the NCLT, Chennai and that moratorium
period is prevailing. She has also informed the Council that she will appear in person or
through Video Conferencing and submit her defence in detail. Thereafter, the resolution
plan has also been approved by the NCLT, Division Bench I, Chennai under Sections
30(6) and 31(1) of the IBC in the said order. The Tribunal acknowledged the initiation of
the corporate insolvency process on 13-11-2020. Therefore, on the date of the award by
the MSME, the moratorium period was in force and the award itself should not have
been passed in the first place.
10.On 12-07-2023, the adjudicating authority/ NCLT, Chennai I, has also
approved the resolution plan. Though it is contended by Mr.V.Kadhirvelu, learned
counsel for the respondent that in view of non-compliance of Section 42 of IBC, the
respondent has lost an opportunity to lodge his claim, I am unable to countenance the
said submission since the effective date was 13-11-2020 and the respondent should have
lodged his claim in time before the adjudicating authority.
11.Section 42, as rightly contended by Mr.T.Ravichandran, learned counsel for the
petitioner, will not have any application, once the resolution plan is finalized. Section 42
provides for an appeal against the decision of the liquidator. Any decision, accepting or
https://www.mhc.tn.gov.in/judis ( Uploaded on: 02/03/2026 04:03:52 pm )

rejecting a claim by the adjudicating authority, has to be appealed by the creditor
aggrieved within 14 days of receipt of such decision. Here, admittedly, the respondent
has not filed his claim or objections before the adjudicating authority, despite knowledge
of the pendency of the CIRP proceedings, which has already been discussed herein
above, in the light of the exchange of emails between the parties.
12.Coming to the decisions relied on by the learned counsel for the petitioner, in
Ghanashyam Mishra’s case , the Hon’ble Supreme Court held that once the resolution
plan is approved, it will be binding not only prospectively, but also prior to the
amendment coming to effect that is before 16-08-2019 and the claims, as provided in the
resolution plan, shall stand frozen and that all claims, which are not a part of the
resolution plan, shall stand extinguished and no person will be entitled to initiate or
continue any proceedings in respect of a claim, which is not part of the resolution plan.
13.In Electrosteel's case , the Hon’ble Supreme Court held that even if an award
was not challenged by invoking Section 34 of the Arbitration and Conciliation Act, it
would not preclude the appellant to approach the executing Court to declare the award,
as void and non-executable. The Hon’ble Supreme Court further held that once the
resolution plan is duly approved by the adjudicating authority under Section 31(1), then
all claims, which are not part of the resolution plan, shall stand extinguished and no
person will be entitled to initiate or continue any proceeding in respect of a claim, which
https://www.mhc.tn.gov.in/judis ( Uploaded on: 02/03/2026 04:03:52 pm )

is not part of the resolution plan. The Hon’ble Supreme Court further held that even
lifting of the moratorium would not revive the claim of the creditor, as the moratorium is
intended to ensure that no fresh or further demands are raised or adjudicated upon,
during the process of corporate insolvency, to ensure that the process is completed
smoothly and without any complications. In the light of the above decisions of the
Hon’ble Supreme Court, the award passed by the MSME Council in favour of the
respondent cannot be executed, as it has not being recognized in the final approved
resolution plan.
14.In the light of the above, the executing Court clearly erred in not properly
appreciating the ratio laid down by the Hon’ble Supreme Court with regard to the effect
of a moratorium period, as well as the claims not forming part of the approved resolution
plan. In the light of the above discussion, the petitioner is entitled to the relief.
15.In fine, the Civil Revision Petition is allowed and the order dated 31.10.2025 in
E.P.No.92 of 2024 in MSEFC.No.88 of 2021 passed by the Principal District Judge,
Krishnagiri, is set aside. There shall be no order as to costs. Connected Civil
Miscellaneous Petition is closed.
27.02.2026
Neutral Citation Case : Yes / No
Speaking / Non-speaking order
Index : Yes/No
ata
https://www.mhc.tn.gov.in/judis ( Uploaded on: 02/03/2026 04:03:52 pm )

P.B.BALAJI. J,
ata
To
The Principal District Judge, Krishnagiri.
Pre-delivery order made in
CRP.No.6100 of 2025
& CMP.No.30039 of 2025
27.02.2026
https://www.mhc.tn.gov.in/judis ( Uploaded on: 02/03/2026 04:03:52 pm )