Approved Resolution Plan extinguishes all claims not included therein, regardless of whether management remains with existing promoters.

The Petitioner (MBL Infrastructure) was awarded a canal restoration contract in Bihar and issued a Work Order to the Respondent (Pradeep Colonisers) in 2015

In March 2017, Corporate Insolvency Resolution Process (CIRP) was initiated against the Petitioner under the IBC

The Respondent submitted a claim of ₹7.29 Crores to the Interim Resolution Professional (IRP), which was partially verified in the List of Creditors but ultimately excluded from the final Resolution Plan approved by the NCLT on 18.04.2018

After the Plan was upheld by the Supreme Court in 2022, an Arbitral Tribunal was constituted to resolve contractual disputes

The Arbitrator held that the counter-claims were maintainable because the Petitioner’s management had not changed (promoter-led resolution) and the Respondent was recognized as an "Operational Creditor" by the Supreme Court during impleadment

1. Whether the counter-claims of the Respondent were maintainable before the learned Arbitrator in light of the approval of a Resolution Plan under the Insolvency and Bankruptcy Code, 2016

2. Whether the "Clean Slate Theory" is inapplicable if the Resolution Plan is submitted by the existing promoter/management rather than a third-party applicant

Section 31(1) of the Insolvency and Bankruptcy Code (IBC), 2016, which stipulates that an approved Resolution Plan is binding on the corporate debtor, creditors, and all stakeholders

The "Clean Slate Theory" as established in Ghanshyam Mishra & Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., holding that all claims not part of the approved Resolution Plan stand extinguished

Principle from Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta, which prohibits "undecided" claims from popping up after resolution to ensure commercial certainty

Section 238 of the IBC regarding the overriding effect of the IBC over other inconsistent laws

The Court found that the learned Arbitrator committed a patent illegality by carving out an exception to the IBC based on the identity of the Resolution Applicant

Section 31 of the IBC does not distinguish between third-party applicants and existing promoters; the binding nature of a Plan attaches to the corporate debtor as a legal entity

The Respondent had actively participated in the CIRP by filing Form-B but failed to challenge the exclusion of its claims from the Plan before the NCLT or NCLAT

The Respondent cannot bypass the "complete code" of the IBC by using arbitration as a collateral route to revive extinguished debts

The Supreme Court’s order allowing the Respondent’s impleadment did not grant substantive relief or revive the debt; since the Supreme Court ultimately declined to disturb the Plan, the Respondent’s claims remained extinguished

The Arbitral Award was set aside to the extent that it upheld and granted relief on the counter-claims

Execution Petition filed by the Respondent (O.M.P. (ENF.) (COMM) 281/2025) was dismissed