Mbl Infrastructures Limited vs Ms Pile Foundation Company

* IN THE HIGH COURT OF DELHI AT NEW DELHI
st
Date of decision: 01 JULY, 2026
IN THE MATTER OF:
+ O.M.P. (COMM) 345/2021 & I.A. 15190/2021
MBL INFRASTRUCTURES LIMITED .....Petitioner
Through: Ms. Anusuya Salwan, Mr. Bankim
Garg, Ms. Nikita Salwan, Mr. Rachit
Wadhwa, Advs., for Petitioner (MBL
Infrastructure Ltd.)

versus

MS 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)
345/2021 is to the Award dated 26.07.2021 passed by the Ld. Sole
Arbitrator in Arbitration Case No.159/2014.
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) 345/2021 Page 1 of 14

iii. It is stated that National Highway Authorities of India (“ NHAI ”),
by way of a Letter of Award bearing No.NHAI/30050/EPC/Digha
Bridge/24218 dated 22.12.2011, awarded to the Petitioner the
work titled “ Construction of approaches to Rail-cum-Road Bridge
across river Ganga at Digha Ghat near Patna from Km. 0.00
(Km. 6..8 of NH-98) to Km. 12.343 (start point of Rail-cum-Road
Bridge) and Km. 0.00 (end point of Rail-cum-Road Bridge) to Km.
5.703 (at Chhapra Bypass) in the State of Bihar ” for a total
contract value of Rs.211,10,51,638/-. The commencement date of
the project was fixed as 11.02.2012, with a stipulated completion
period of 30 (thirty) months, ending on 11.08.2014.
iv. It is further stated that, pursuant to the aforesaid Letter of Award,
a formal agreement in respect of the said project was executed
between the Petitioner and NHAI on 10.01.2012.
v. It is stated that on 31.05.2012, the Respondent approached the
Petitioner for the execution of a portion of the piling works and,
on the same date, submitted its quotation for the said work.
vi. It is further stated that the Petitioner thereafter issued a work order
No.MBL/NH/RD/BH/1/WO/02 dated 13.06.2012 in favour of the
Respondent for “ Execution of Bored CAST-IN-SITU concrete Pile
Foundation for the proposed Bridge Location at Digha Ghat,
Patna on Piece Rate basis ” ( hereinafter referred to as “ the
contract ”) for a total contract value of Rs. 4,03,72,500/-. Under
the terms of the work order, the Respondent was required to
complete the assigned work within a period of 06 (six) months.
vii. It is stated that the Respondent encountered financial difficulties
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
O.M.P. (COMM) 345/2021 Page 2 of 14

and failed to mobilise the requisite manpower, machinery and
materials in accordance with the contractual obligations.
Consequently, the Petitioner, by way of financial assistance,
released a sum of Rs. 4,50,000/- through Cheque No.6368880
dated 30.07.2012.
viii. It is further stated that the Petitioner handed over a hindrance-free
site to the Respondent on 09.11.2012 for execution of its scope of
work under the work order. The Petitioner also ensured timely
supply of steel, Ready Mix Concrete (“ RMC ”) and other
necessary materials, and duly fulfilled all its contractual
obligations to facilitate uninterrupted progress of the work.
ix. It is stated that the Respondent was inadequately prepared to
execute the assigned work. The bar bending schedule for the test
pile was submitted only on 09.11.2012, and the Respondent failed
to timely mobilise its resources at the project site. It is further
stated that the hydraulic pile rig machine and other equipment
brought to the minor bridge site remained in dismantled condition
for a considerable period and could not be assembled for
execution of the test pile, with the hydraulic rig becoming
operational only on or about 28.11.2012.
x. It is stated that the Petitioner extended all necessary assistance to
the PFC within the stipulated timelines and, notwithstanding the
Respondent's repeated contractual breaches, honoured the first
Running Account (“ RA ”) Bill raised by the Respondent. The
Petitioner also permitted the mobilisation of PMR, despite the
same not forming part of the contractual specifications, solely to
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
O.M.P. (COMM) 345/2021 Page 3 of 14

facilitate the progress of the project and assist the Respondent.
xi. It is stated that by 12.05.2014, the Respondent had completed only
32 out of the 42 piles required for the minor bridge and had failed
to execute any piling work at the remaining structures, eventually
abandoning the project. It is submitted that such abandonment
constituted a breach of the contract and resulted in substantial
losses and damages to the Petitioner.
xii. 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
disputes.
xiii. It is stated that the learned Arbitral Tribunal entered upon
Reference on 12.05.2014.
xiv. 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. 1,75,000/- being the loss of
turnover for the period between 13.12.2012 to
18.03.2014 for the prolonged period/extended period
of stay at site by Claimant

Claim No.2: A sum of Rs. 2,57,33,000/- on account of
idling of staff & machinery from 13.06.2012 to
21.04.2013 & 20.07.2013 to 05.03.2014.

Claim No.3: A sum of Rs. 58,50,000/- being the loss of
profit on the balance work remained unexpected due to
breaches, lapses, delays and defaults committed by
Respondent.

Signature Not Verified
Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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O.M.P. (COMM) 345/2021 Page 4 of 14

Claim No.4: A sum of Rs. 75,00,000/- on account of
financial monetary & business loss pegged at Rs. 5
lacs per month for 15 months.

Claim No. 5: A sum of Rs. 40,00,000/- by way of
damages on account of mental agony & harassment
caused by Respondent failure to give possession of site
for starting the work till date.

Claim No. 6: Pre suit, pendentilite and future interest
18% p.a. on claim no. 1 to 5.

Claim No. 7: A sum of Rs. 5,00,000/- being the cost of
Arbitration.”

xv. 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.1: A sum Rs 8,88,393.00 paid in
excess than the due payments against the work done
and other payments permitted under the work order.

Counter Claim No.2: An amount of Rs 32,67,939/-, on
account of Difference in cost of material to be
purchased for completion of the balance work.

Counter Claim No.3: An amount of Rs 57,94,610/-, on
account of Difference in cost of material to be
Consumed in the works of Pedestals, sub Structure and
superstructure over the foundation works awarded to
the claimant.

Counter Claim No.4: An amount of Rs. 1,17,18,270.00
on account of supervising the work including
overheads.
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
O.M.P. (COMM) 345/2021 Page 5 of 14

Counter Claim No.5: An amount of Rs 2,24,75,500.00,
on account of non utilization of Batching Plant and
other connected machinery & equipment, subsequently
required for completing the balance work.”

xvi. 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.
xvii. 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.
xviii. In the meanwhile, the Petitioner filed an Application dated
24.07.2017 before the Arbitral Tribunal for adjournment of the
proceedings in lieu of the Order dated 30.03.2017 passed by the
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.
xix. Pursuant thereto, a Resolution Plan was submitted before the
NCLT, Kolkata on 18.04.2018 and was duly approved by the
Adjudicating Authority.
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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xx. It is further stated that on 16.08.2019, the 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.
xxi. It is stated that the Arbitral Tribunal rendered its Award dated
26.07.2021 in Arbitration Case No. 159/2014.
xxii. 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.
xxiii. 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.
xxiv. It was further observed by the learned Sole Arbitrator that
contractual clauses must be interpreted in a harmonious manner,
and no clause ought to be read in isolation or in a manner that
renders other provisions redundant.
xxv. 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
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
O.M.P. (COMM) 345/2021 Page 7 of 14

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.
xxvi. 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.
xxvii. 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.
xxviii. 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
arbitration.
xxix. It was also specifically noted that the proceedings before the
NCLT had advanced substantially, culminating in the approval of
a resolution plan.
xxx. 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
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
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Petitioner. Upon such adjudication, the learned Sole Arbitrator
awarded a sum of Rs.39,58,150/- in favour of the
Respondent/Claimant and a sum of Rs.11,80,712/- 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.27,77,438/-, 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
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
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
O.M.P. (COMM) 345/2021 Page 9 of 14

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?”

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
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
18:53:24
O.M.P. (COMM) 345/2021 Page 10 of 14

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
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
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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O.M.P. (COMM) 345/2021 Page 11 of 14

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
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
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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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
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
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Signed By:HARIOM
SINGH KIRMOLIYA
Signing Date:02.07.2026
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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
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
Signing Date:02.07.2026
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