Claims not forming part of an approved Resolution Plan under IBC stand extinguished and are inexecutable.

The respondent obtained an award for Rs. 34,53,303/- from the MSME Council on 25.02.2022.

Prior to this, Corporate Insolvency Resolution Process (CIRP) had commenced against the petitioner (Judgment Debtor) on 13.11.2020 via IBA/386/2020 before the NCLT, Chennai.

Despite receiving notice of the moratorium from the Interim Resolution Professional on 15.11.2021, the respondent failed to lodge its claim before the adjudicating authority.

A resolution plan was subsequently approved by the NCLT on 12.07.2023.

The respondent filed E.P. No. 92 of 2024 to execute the MSME award.

The Principal District Judge, Krishnagiri, allowed the execution, which the petitioner challenged via this revision petition.

1. Whether an execution petition is maintainable for a claim that was not part of a resolution plan approved under Section 31 of the Insolvency and Bankruptcy Code (IBC), 2016.

2. Whether an arbitration award passed during a moratorium period under Section 14 of the IBC is executable if the creditor failed to lodge a claim during the CIRP.

The court primarily applied Section 31 of the IBC, which dictates that an approved resolution plan is binding on all stakeholders and extinguishes claims not included therein.

It also applied Section 14 regarding the moratorium period.

The court relied on the Supreme Court precedents in *Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Company Ltd.*, which held that claims not part of an approved plan stand extinguished.

The court relied on *Electrosteel Limited v. Ispat Carrier Private Limited*, which established that an approved plan renders non-included claims inexecutable even if the underlying award was not challenged under Section 34 of the Arbitration Act.

The court reasoned that the MSME award was passed on 25.02.2022, a date during which the moratorium under Section 14 of the IBC was active; therefore, the award should not have been passed.

The court observed that the respondent had actual knowledge of the CIRP via email correspondence from the resolution professional but neglected to file a claim.

Applying the "clean slate" theory affirmed in *Ghanashyam Mishra*, the court found that once the NCLT approved the resolution plan on 12.07.2023, all past liabilities not recognized in the plan were legally extinguished.

Consequently, the executing court lacked the authority to enforce a "dead claim" against the new management, as the moratorium and subsequent plan approval frozen all claims to ensure a smooth resolution process.

It held that the award passed by the MSME Council is inexecutable because it was not recognized in the final approved resolution plan, and claims not included in such plans are extinguished by operation of law under Section 31 of the IBC.

The execution petition (E.P. No. 92 of 2024) was dismissed.