Mbl Infrastructures Limited vs Pile Foundation Company
- Court
- Delhi High Court
* IN THE HIGH COURT OF DELHI AT NEW DELHI
st
Date of decision: 01 JULY, 2026
IN THE MATTER OF:
+ O.M.P. (COMM) 342/2021 & I.A. 14986/2021
MBL INFRASTRUCTURES LIMITED .....Petitioner
Through: Ms. Anusuya Salwan, Mr. Bankim
Garg, Ms. Nikita Salwan, Mr. Rachit
Wadhwa, Advs., for Petitioner (MBL
Infrastructure Ltd.)
versus
PILE FOUNDATION COMPANY .....Respondent
Through: Mr. Rajiv Ranjan Dwivedi, Mr.
Vishal, Advs., for Respondents
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
1. The challenge in the present Petition being O.M.P. (COMM)
342/2021 is to the Award dated 26.07.2021 passed by the Ld. Sole
Arbitrator in Arbitration Case No.158/2014.
2. The facts, in brief, leading to the filing of the present Petition are as
under:
i. The Petitioner is a Public Limited Company engaged in the
business of Civil Engineering Project works, having operations
across India and having undertaken and executed several projects
on a pan-India basis.
ii. The Respondent is a partnership firm having its office at 29/1,
Savitri Nagar, near Sheikh Sarai, Phase-1, New Delhi – 110017.
Signature Not Verified
Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
O.M.P. (COMM) 342/2021 Page 1 of 15
iii. It is stated that on 03.09.2012, Haryana PWD (B&R) Sonipat
Circle, issued a Letter of award bearing Memo No.4107 for the
work titled “ Construction of four lane ROB at Rai Nahra
Bahadurgarh Road level crossing No.21 on Delhi-Ambala
Railway line in Sonipat Distt ”. Thereafter, vide Memo No.5185
dated 28.09.2012, instructions were issued to commence the work,
fixing 12.10.2012 as the date of commencement and 11.10.2014
as the stipulated date of completion.
iv. It is further stated that a formal agreement was executed between
the Petitioner and Haryana PWD (B&R) Sonipat Circle on
09.10.2012, for the aforesaid work.
v. Subsequently, the Petitioner issued Work Order
No.MBL/ND/1728 dated 22.11.2012 in favour of the Respondent
for “ Construction of Bored CAST-IN-SITU RCC Pile foundation
for ROB at Rai Nehra Bahadurgarh road on Delhi-Ambala
Railway line near KMP at Sonipat on Piece Rate basis ”
( hereinafter referred to as “ the contract ”) on piece rate basis,
governed by the terms & conditions along with Bill of Quantities
(“ BOQ ”) forming part of the work order.
vi. It is stated that the Respondent mobilized the Kelly machine in the
month of February 2013, which was allegedly old, dilapidated and
not in good working condition. It is further stated that the
Respondent failed to arrange essential equipment such as a
generator and hydra-crane until 14.02.2013 and eventually
commenced work only on 19.02.2013.
vii. It is stated that the Petitioner extended a mobilization advance to
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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O.M.P. (COMM) 342/2021 Page 2 of 15
the Respondent on 25.03.2013. However, as the Respondent
allegedly failed to carry out any effective work at the site, the
Petitioner‟s Project Manager, vide email dated 30.03.2013,
pointed out deficiencies in the execution of piling work,
describing the same as improper and defective. It is further stated
that owing to inadequate resources, outdated and defective rigs,
and a negligent approach, the Respondent failed to make progress.
The Project Manager also recommended termination of the work
order with immediate effect.
viii. It is stated that the Petitioner issued a further communication
dated 03.07.2013 highlighting the unsatisfactory progress of work.
It is further stated that on account of such delays attributable to the
Respondent, the principal employer, namely Haryana PWD
(B&R), imposed delay damages upon the Petitioner. The
Petitioner also claims to have suffered losses due to prolonged
idling of the site, which prevented execution of subsequent works
pending completion of foundational piling by the Respondent.
ix. It is stated that owing to the complete stagnation of work at the
project site, the Petitioner, having no alternative, awarded the
work to M/s Him Piles Foundation. It is further stated that the
Respondent abandoned the project without clearing dues of
vendors and contractors, which were subsequently discharged by
the Petitioner.
x. It is stated that disputes arose between the parties in consequence
thereof, and the matter was referred to arbitration, wherein Mr.
G.R. Jain was appointed as the sole arbitrator to adjudicate the
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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O.M.P. (COMM) 342/2021 Page 3 of 15
disputes.
xi. It is stated that the learned Arbitral Tribunal entered upon
reference on 22.08.2014.
xii. The claims made by the Respondent/Claimant before the learned
Sole Arbitrator are extracted below for reference and the same
reads as under:
“Claim No.1: A sum of Rs. 7,00,000/- being the
amount against final payment and security deposit.
Claim No.2: A sum of Rs. 45,00,000/- on account of
under-utilization/idling of RT3 with 955 BLC crane,
DMC Tripod, wielding set from 23.11.2012 to
10.05.2013.
Claim No.3: A sum of Rs. 25 lacs being the idling
charges/under-utilization of TMR/DMC @ Rs. 3.5
lacs/month with effect from 11.05.2013 to 31.12.2013.
Claim No.4: A sum of Rs. 1,10,000/- being the loss of
turnover for the period between 21.01.2013 to
31.12.2013 for the prolonged period /extended period
of stay at site by Claimant.
Claim No. 5: A sum of Rs. 1,10,00,000/- on account of
harassment, mental agony, financial monetary &
business loss pegged at Rs. 5 lacs per month for 15
months.
Claim No. 6: A sum of Rs. 7,00,000/- being the loss of
profit on the balance work remained executed due to
breaches, lapses, delays and defaults committed by
Respondent.
Claim No. 7: A sum of Rs. 21 lacs being the escalation
for the work executed from the period 22.01.2013 to
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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O.M.P. (COMM) 342/2021 Page 4 of 15
31.12.2013 based on 1st to 6th RA bill.
Claim No. 8 & 9: Presuit, pendentilite and future
interest (a, 18% p.a. on claim no. 1 to 5.
Claim No. 10: A sum of Rs. 5,00,000/- being the cost of
Arbitration.
Claim No. 11: A sum of Rs. 26 lacs being idle/under-
utilization charges of labour and staff Rs. 2
lacs/month.
Claim No. 12: A sum of Rs. 10,000/day on account of
miscellaneous site expenditure including conveyance
charges etc. etc. from 22.11.2012 to 31.12.2013.”
xiii. The Petitioner raised counter-claims based on the non-
performance of the contract by the Respondent/Claimant. The said
counter-claims are extracted below for reference and the same
reads as under:
Counter
Claim
No.
On account of Amount (in
Rupees)
1 Liquidated Damages as per the
Contract between the claimant
and respondent.
7,57,200/-
2 Claim towards the amount of
Loss suffered by the respondent
due to delay in execution of work
by the claimant.
1,60,00,000/-
3 Claims towards damages on
account of idling of plant &
machinery for the reasons of
delay on the part of the claimant.
18,30,000/-
4 The respondent claim on account
of payment made to various
1,22,238/-
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
O.M.P. (COMM) 342/2021 Page 5 of 15
vendors on behalf of Pile
Foundation Company.
5 Claim towards construction
material issued to the claimant
but not returned or utilized.
6,32,439/-
6 Claimant's claim towards sub-
standard work.
5,74,200/-
7 Cost of Arbitration Proceeding =
Rs. 20 Lacs.
20,00,000/-
8 Respondent claim on account of
interest a 18% per annum anti-
lite, penente-lete and post —lite
interest.
To be
quantified
Total of counter claims = 2,19,16,077/-
xiv. It is further stated that during the pendency of the arbitration
proceedings, RBL Bank Ltd., a creditor of the Petitioner, filed an
Application under Section 7 of the Insolvency and Bankruptcy
Code, 2016 (“ IBC ”) being Company Petition No.170/KB/2017
before the NCLT, Kolkata. The said Application was allowed, and
Corporate Insolvency Resolution Process (“ CIRP ”) was initiated
against the Petitioner with effect from 30.03.2017, along with the
declaration of a moratorium and public announcement as stated in
Section 13 of IBC.
xv. It is stated that a Resolution Professional was appointed, who
issued a public announcement inviting claims from creditors of the
Petitioner, and 13.04.2017 being the last date for submission of
claims.
xvi. In the meanwhile, the Petitioner filed an Application dated
24.07.2017 before the Arbitral Tribunal for adjournment of the
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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proceedings in lieu of the Order dated 30.03.2017 passed by the
Hon‟ble NCLT, Kolkata. Thereafter, vide Order dated 30.12.2017,
the Arbitral Tribunal kept the arbitral proceedings in abeyance till
the completion of the Debt reduction process.
xvii. Pursuant thereto, a Resolution Plan was submitted before the
Hon‟ble NCLT, Kolkata on 18.04.2018 and was duly approved by
the Adjudicating Authority.
xviii. It is further stated that on 16.08.2019, the Hon‟ble NCLAT upheld
the approved Resolution Plan and dismissed the appeals preferred
by certain creditors challenging the same, whereupon the
Resolution Plan attained finality and was made effective from the
date of approval by the Adjudicating Authority. It is stated that
these developments were duly brought to the notice of both the
Arbitral Tribunal and the Respondent.
xix. It is stated that the Arbitral Tribunal rendered its Award dated
26.07.2021 in Arbitration Case No. 158/2014.
xx. The learned Sole Arbitrator recorded that both parties had
unequivocally stated that they did not intend to lead oral evidence,
and that the dispute would be decided solely on the basis of the
documents placed on record.
xxi. The learned Sole Arbitrator also undertook an examination of the
terms of the agreement between the parties and emphasized that
the rights and obligations of the parties must strictly emanate from
the contractual provisions.
xxii. It was further observed by the learned Sole Arbitrator that
contractual clauses must be interpreted in a harmonious manner,
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Signed By:HARIOM
SINGH KIRMOLIYA
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and no clause ought to be read in isolation or in a manner that
renders other provisions redundant.
xxiii. The learned Sole Arbitrator, upon examining the respective claims
arising out of the contract, held that the claims of the
Respondent/Claimant against the Petitioner were still under
adjudication before the Arbitral Tribunal. It was observed that
such claims would attain the status of a „debt‟ only upon the
Claimant succeeding in arbitration and upon an award being
passed and published in its favour. Until such stage, the claims
could neither be treated as admitted nor fall within the ambit of
the IBC.
xxiv. The learned Sole Arbitrator took note of the fact that the Petitioner
had initiated proceedings before the NCLT under the framework
of the IBC. It was further observed that the disputes between the
parties had arisen prior to the initiation of such proceedings and
pre-dated the year 2016, whereas the approach to NCLT was made
subsequently.
xxv. The learned Sole Arbitrator further clarified that the initiation of
insolvency proceedings does not, by itself, operate as a bar to
arbitral proceedings. it was further observed that once a claim
crystallizes into a debt, it may be pursued before the NCLT in
accordance with law.
xxvi. The learned Sole Arbitrator also observed that the arbitral
proceedings cannot be kept in abeyance indefinitely on account of
parallel proceedings before the NCLT, and declined to permit
such proceedings to obstruct or impede the continuation of
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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arbitration.
xxvii. It was also specifically noted that the proceedings before the
NCLT had advanced substantially, culminating in the approval of
a resolution plan.
xxviii. The learned Sole Arbitrator thereafter proceeded to adjudicate the
disputes between the parties, including the claims preferred by the
Respondent/Claimant and the counter-claims raised by the
Petitioner. Upon such adjudication, the learned Sole Arbitrator
awarded a sum of Rs.22,27,783/- in favour of the
Respondent/Claimant and a sum of Rs.1,85,496/- in favour of the
Petitioner. After adjusting the amount awarded under the counter-
claims, the net amount awarded in favour of the
Respondent/Claimant worked out to Rs.20,42,287/-, together with
simple interest at the rate of 9% per annum from the date of the
Award until realization.
3. The preliminary objection raised by the learned counsel for the
Petitioner is that the learned Arbitral Tribunal lacked the jurisdiction to
adjudicate upon the claims preferred by the Respondent/Claimant and to
render the impugned Award, as the Petitioner had been subjected to
insolvency proceedings under the IBC during the pendency of the arbitral
proceedings, which ultimately culminated in the approval of a Resolution
Plan by the NCLT, Kolkata. It is further contended that by virtue of Section
31(1) of the IBC, upon approval of the Resolution Plan by the Adjudicating
Authority, the same becomes binding on the Corporate Debtor, its creditors,
employees, members, governmental authorities and all other stakeholders,
thereby extinguishing all claims not forming part of the approved Resolution
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
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Plan.
4. The question raised by the learned Counsel for the Petitioner as to
whether the dues payable to a creditor can survive post the Resolution Plan
or not is no longer res integra and stands settled by authoritative
pronouncements of the Apex Court in Ghanashyam Mishra & Sons Private
Limited v. Edelweiss Asset Reconstruction Company Limited, ( 2021) 9
SCC 657 and Electrosteel Steel Limited (Now ESL Steel Limited) v. Ispat
Carrier Private Limited, (2025) 7 SCC 773 .
5. The precise issue that has been raised before the Apex Court was
considered in Ghanshyam Mishra ( supra ), and the same reads as under:-
“ 2. The short but important questions, that arise for
consideration in this batch of matters, are as under:
2.1. (i) As to whether any creditor including the
Central Government, State Government or any local
authority is bound by the resolution plan once it is
approved by an adjudicating authority under sub-
section (1) of Section 31 of the Insolvency and
Bankruptcy Code, 2016 (hereinafter referred to as “the
I&B Code”)?
2.2. (ii) As to whether the amendment to Section 31 by
Section 7 of Act 26 of 2019 is clarificatory/declaratory
or substantive in nature?
2.3. (iii) As to whether after approval of resolution
plan by the adjudicating authority a creditor including
the Central Government, State Government or any
local authority is entitled to initiate any proceedings
for recovery of any of the dues from the corporate
debtor, which are not a part of the resolution plan
approved by the adjudicating authority?”
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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6. The aforesaid issue has been answered in Ghanshyam Mishra ( supra )
in the following manner:-
“ 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 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.”
7. In the said case, the Apex Court reiterated that upon approval of a
resolution plan under Section 31 of the IBC, all claims not forming part of
the resolution plan stand extinguished. The Apex Court further held that any
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Signed By:HARIOM
SINGH KIRMOLIYA
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arbitral award rendered in respect of such extinguished claims is incapable
of enforcement and cannot survive the approval of the resolution plan. The
Apex Court emphasized that the IBC overrides all inconsistent proceedings
and that continuation of arbitral adjudication in respect of claims
extinguished by operation of the approved resolution plan would defeat the
very object of the insolvency framework. The Court specifically held that
once the claim itself stands extinguished, the adjudicatory forum loses
jurisdiction to continue proceedings in relation thereto.
8. The said issue has been again quoted with approval in Electrosteel
Steel Limited ( supra ) wherein the Apex Court has held as under:-
“ 71. Insofar as the second and third issues are
concerned, it is by now well settled that once a
resolution plan is duly approved by the adjudicating
authority under sub-section (1) of Section 31, 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 to a
claim which is not part of the resolution plan. In fact,
this Court in Essar Steel [Essar Steel (India) Ltd.
(CoC) v. Satish Kumar Gupta, (2020) 8 SCC 531 :
(2021) 2 SCC (Civ) 443 : (2020) 219 Comp Cas 97]
had categorically declared that a successful resolution
applicant cannot be faced with undecided claims after
the resolution plan is accepted. Otherwise, this would
amount to a hydra head popping up which would throw
into uncertainty the amount payable by the resolution
applicant. Insofar as the resolution plan is concerned,
the resolution professional, the Committee of Creditors
and the adjudicating authority noted about the claim
lodged by the respondent in the arbitration proceeding.
However, the respondent was not included in the top
30 operational creditors whose claims were settled at
nil. This can only mean that the three authorities
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Signed By:HARIOM
SINGH KIRMOLIYA
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conducting the corporate insolvency resolution process
did not deem it appropriate to include the respondent
in the top 30 operational creditors. If the claims of the
top 30 operational creditors were settled at nil, it goes
without saying that the claim of the respondent could
not be placed higher than the said top 30 operational
creditors. Moreover, the resolution plan itself provides
that all claims covered by any suit, cause of action,
arbitration, etc. shall be settled at nil. Therefore, it is
crystal clear that insofar as claim of the respondent is
concerned, the same would be treated as nil on a par
with the claims of the top 30 operational creditors.
72. Lifting of the moratorium does not mean that the
claim of the respondent would stand revived
notwithstanding approval of the resolution plan by the
adjudicating authority. Moratorium is intended to
ensure that no further demands are raised or
adjudicated upon during the corporate insolvency
resolution process so that the process can be
proceeded with and concluded without further
complications. View taken by the High Court cannot be
accepted in the light of the clear cut provisions of the
IBC as well as the law laid down by this Court. In view
of the resolution plan, as approved, the claim of the
respondent stood extinguished. Therefore, the
Facilitation Council did not have the jurisdiction to
arbitrate on the said claim. Since the award was
passed without jurisdiction, the same could be assailed
in a proceeding under Section 47CPC. View taken by
the High Court that because the appellant did not
challenge the award under Section 34 of the 1996 Act,
therefore, it was precluded from objecting to execution
of the award at the stage of Section 47CPC, is wholly
unsustainable.”
9. Applying the aforesaid principles to the facts of the present case, it is
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Signed By:HARIOM
SINGH KIRMOLIYA
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evident that CIRP against the Petitioner was initiated by order dated
30.03.2017 passed by the NCLT, Kolkata. Consequent thereto, a
moratorium under Section 14 came into operation and a public
announcement under Section 13 was issued inviting all creditors to submit
their claims before the Resolution Professional. The Respondent/Claimant,
whose contractual claims were already in existence and had admittedly
arisen prior to commencement of CIRP, was required to lodge its claims
before the Resolution Professional in accordance with the statutory scheme
of the IBC. Thereafter, a Resolution Plan came to be approved by the
Adjudicating Authority and attained finality upon affirmation by the
NCLAT. Once such Resolution Plan was approved, only those claims which
formed part of the resolution plan could survive and all other claims stood
extinguished by operation of law.
10. From a bare reading of the law laid down by the Apex Court shows
that it is not just the debt but any claim against a company which undergoes
CIRP and once a Resolution Plan is approved by the Committee of Creditors
and the Adjudicating Authority puts a seal of approval on the Resolution
Plan, the award does not sustain and therefore deserves to be set aside only
on this ground.
11. The reason given by the learned Arbitrator that since the debt has not
been crystallized during the arbitration proceedings, the arbitrator can still
proceed ahead to decide the issue is completely contrary to the law laid
down by the Apex Court.
12. In spite of the aforesaid statutory developments, the learned Sole
Arbitrator proceeded to adjudicate the claims of the Respondent/Claimant on
the premise that the claims had not yet crystallized into a debt and therefore
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SINGH KIRMOLIYA
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fell outside the ambit of the IBC. Such reasoning cannot be sustained in law.
13. In view of the above, the Award dated 26.07.2021 is set aside.
14. The Petition is disposed of. Pending applications, if any, also stands
disposed of.
SUBRAMONIUM PRASAD, J
JULY 01, 2026
JR
Signature Not Verified
Signed By:HARIOM
SINGH KIRMOLIYA
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