Delhi High Court
Paharpur Cooling Towers Limited vs Sinnar Thermal Power Limited & Ors on 11 February, 2026
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 21.01.2026
Judgment pronounced on: 11.02.2026
+ OMP (ENF.) (COMM.) 237/2025 & EX.APPL.(OS). 92/2026
(By R-2 U/O 1 Rule 10)
PAHARPUR COOLING TOWERS LIMITED
.....Decree Holder
Through: Mr. Siddhartha Datta, Ms.
Suhani Dwivedi, Ms. Nimrah
Sameen Alvi, Mr. Deepanjan
Datta, Ms. Adyasha Nanda, Mr.
Vishal Pathak, Advocates.
versus
SINNAR THERMAL POWER LIMITED & ORS.
.....Judgement Debtors
Through: Mr. Rajshekhar Rao, Senior
Advocate along with Ms.
Meghna Mishra, Mr. Nikhil
Ratti Kapoor and Ms.
Yashodhara Gupta, Advcoates
for Respondent No. 2.
Mr. Varun Chandiok and Ms.
Anubhi Goyal, Advocates for
Respondent Nos. 4 to 6.
CORAM:
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR
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JUDGMENT
HARISH VAIDYANATHAN SHANKAR, J.
1. The present petition has been filed under Section 36 of the
Arbitration and Conciliation Act, 19961, read with Order XXI Rules
10 and 11 of the Code of Civil Procedure, 1908, seeking enforcement
of the Arbitral Award dated 12.11.2021, read with the correction
Order dated 20.12.20212, against all the Judgment Debtors herein. In
furtherance of the said enforcement, the Petitioner has accordingly
formulated multiple prayers in the present petition.
BRIEF FACTS:
2. For the purposes of adjudication of the present lis, it is
necessary to briefly set out the relevant factual background, insofar as
it bears upon the controversy presently arising for consideration before
this Court, which is delineated hereunder:
I. The Decree Holder was awarded a Letter of Award dated
12.08.2010, whereby it was entrusted with the work of
construction, erection, commissioning and completion of five
Induced Draft Cooling Towers for a thermal power project
situated at Nashik, Maharashtra.
II. Pursuant thereto, a series of contracts came to be executed
governing the said scope of works.
III. At the time of execution of the aforesaid Letter of Award and
the underlying contracts, the contracting entity on behalf of the
project owner was Indiabulls Realtech Limited.
1
A&C Act
2
Arbitral Award
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IV. Subsequently, pursuant to a corporate reorganisation, the power
generation business of Indiabulls Realtech Limited was
transferred to the Rattan India Group, whereupon the said entity
was rechristened as Rattan India Power Limited, and the
project-specific company was renamed Rattan India Nasik
Power Limited, which continued to function as a wholly-owned
subsidiary of Rattan India Power Limited.
V. It is stated that the aforesaid contracts were completed by the
Petitioner in June 2018.
VI. Subsequently, with effect from 05.02.2019, Rattan India Nasik
Power Limited underwent a further change in its corporate
name and came to be known as Sinnar Thermal Power Limited,
which is arrayed as Judgment Debtor No. 1 in the present
proceedings.
VII. Disputes arose between the Decree Holder and Judgment
Debtor No. 1 in relation to execution of the aforesaid contracts,
inter alia, concerning payments due, issuance of acceptance
certificates and allied contractual obligations. Consequently, the
Decree Holder issued a notice invoking arbitration dated
06.12.2019.
VIII. As the parties were unable to arrive at a consensus on the
appointment of an arbitral tribunal, this Court, vide Order dated
31.01.2020 passed in ARB.P. No. 63/2020 titled as „Paharpur
Cooling Towers Ltd. vs. Sinnar Thermal Power Limited‟,
appointed Mr. Justice A.K. Pathak (Retd.), former Judge of this
Court, as the Sole Arbitrator to adjudicate the disputes between
the Decree Holder and Judgment Debtor No. 1.
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IX. Upon completion of pleadings, recording of evidence and final
hearing, the learned Sole Arbitrator rendered the Arbitral
Award dated 12.11.2021, which was thereafter subjected to a
Correction Order dated 20.12.2021.
X. The Award was passed in favour of the Decree Holder and
solely against Judgment Debtor No. 1. Aggrieved thereby,
Judgment Debtor No. 1 preferred a petition under Section 34 of
Act, before this Court on 28.04.2022, challenging the validity of
the Award.
XI. During the pendency of the Section 34 proceedings, the
National Company Law Tribunal, New Delhi3, vide Order
dated 19.09.2022, passed in CP(IB) No. 2561/ND/2019,
admitted Judgment Debtor No. 1 into Corporate Insolvency
Resolution Process4 under the provisions of the Insolvency
and Bankruptcy Code, 20165, and appointed an Interim
Resolution Professional6.
XII. In compliance with the statutory mandate under the IBC, the
Decree Holder filed its claim before the Resolution Professional
of Judgment Debtor No. 1 on 11.10.2022, claiming an amount
of ₹23,96,21,643/-, being the amount due and payable under the
Arbitral Award.
XIII. The Resolution Professional, after due verification, admitted the
claim of the Decree Holder vide communication dated
26.02.2024, to the extent of ₹23,10,04,989.25.
3
NCLT
4
CIRP
5
IBC
6
IRP
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XIV. In view of the continuation of CIRP proceedings against
Judgment Debtor No. 1, the Section 34 petition filed by it came
to be withdrawn on 26.08.2025, whereupon the Arbitral Award
attained finality.
XV. Thereafter, the CIRP proceedings culminated in the approval of
a Resolution Plan by the learned NCLT vide Order dated
28.11.2025, in terms of Section 31 of the IBC.
XVI. It is the grievance of the Decree Holder that under the approved
Resolution Plan, the admitted claim of the Decree Holder-
quantified at approximately ₹23 crores – has been substantially
scaled down and reduced to a fraction thereof, resulting in a
significant shortfall vis-Ã -vis the decretal amount payable under
the Award.
3. It is material to note that the present execution proceedings
were instituted by the Decree Holder prior to the approval of the
Resolution Plan, specifically on 27.10.2025, i.e., approximately one
month before the Order dated 28.11.2025 passed by the learned NCLT
approving the Resolution Plan.
CONTENTIONS ON BEHALF OF THE DECREE HOLDER:
4. Mr. Siddhartha Datta, learned counsel for the Decree Holder
would contend that the present execution petition is fully maintainable
notwithstanding the approval of a Resolution Plan in respect of
Judgment Debtor No. 1. He would submit that the act of lodging a
claim before the Resolution Professional under the IBC is a statutory
requirement and cannot, by any stretch of interpretation, be equated
with or construed as proceedings for execution of an arbitral award
under Section 36 of the A&C Act.
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5. Learned counsel for the Decree Holder would further contend
that the present execution proceedings are independent in character
and operate in a distinct legal field from the CIRP proceedings. He
would submit that the right of a decree holder to seek enforcement and
realisation of Arbitral Award flows from the A&C Act, and the mere
finalisation or approval of a Resolution Plan does not ipso facto
extinguish or denude the Decree Holder of its vested right to recover
the monies awarded by the learned Sole Arbitrator, particularly from
persons other than the corporate debtor undergoing CIRP.
6. Learned counsel would submit that the present petition, in so far
as it seeks enforcement of the Award against Judgment Debtor Nos. 2
to 6, is clearly maintainable in law. He would place reliance on the
judgment of the Hon‟ble Supreme Court in Cheran Properties
Limited v. Kasturi and Sons Limited7, and Cox & Kings Ltd. v. SAP
India (P) Ltd.8, to contend that the doctrines of Group of Companies
and Single Economic Unit are not confined to the stage of reference or
adjudication, but may validly be invoked even at the stage of
execution, where the facts so warrant.
7. He would further submit that the maintainability of the petition
is reinforced by Section 35 of the A&C Act, as elucidated in Cheran
Properties (supra), which clarifies the ambit of the expression
“persons claiming under”, a category that, on the facts pleaded,
encompasses Judgment Debtor Nos. 2 to 6.
8. He would contend that in the present case, it is an admitted and
undisputed position that Judgment Debtor No. 1 was, at all material
times, a wholly-owned subsidiary of Judgment Debtor No. 2, and
7
(2018) 16 SCC 413
8
(2024) 4 SCC 1
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functioned merely as a special purpose vehicle for execution of the
Nashik Power Project.
9. He would further contend that Judgment Debtor No. 3, being
the Chairman and Executive Director of Judgment Debtor No. 2,
exercised direct, deep and pervasive control over Judgment Debtor
No. 1. It would further be submitted that the shareholding pattern and
corporate structure of Judgment Debtor Nos. 2 to 6 unequivocally
demonstrates an all-pervasive and centralized control exercised over
Judgment Debtor No. 1, rendering its independent corporate existence
illusory in real and practical terms.
10. Learned counsel for the Decree Holder would draw sustenance
from the annual reports, statutory disclosures and public documents of
Judgment Debtor No. 2 to submit that Judgment Debtor No. 1 was
consistently projected and represented as an integral and inseparable
part of the group business of Judgment Debtor No. 2, with no
independent commercial identity or decision-making autonomy of its
own.
11. He would further contend that substantial funds were raised by
Judgment Debtor No. 2 from the public at large, including through
public offerings made in the name of Judgment Debtor No. 1 (Sinnar
Thermal Power Limited), and that such monies were thereafter infused
into, or filtered down for various purposes including to, Judgment
Debtor No. 1, thereby financing the very project in respect of which
the Decree Holder executed the works and earned the awarded dues.
12. Learned counsel would submit that Judgment Debtor No. 2 was
not merely a passive holding company, but from the inception of the
project was actively involved in negotiations with the Decree Holder,
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formulation of commercial terms, and decision-making relating to the
execution of the contracts, notwithstanding the fact that the formal
contracts stood in the name of Judgment Debtor No. 1.
13. He would further rely upon contemporaneous correspondence,
minutes of meetings and records of project execution to demonstrate
that it was, in fact, officials and representatives of Judgment Debtor
No. 2 who were negotiating, coordinating and supervising the works
undertaken by the Decree Holder. He would also place reliance on the
commissioning and completion documentation to contend that the
commissioning of the project was acknowledged at the group level,
evidencing direct involvement of Judgment Debtor No. 2.
14. In sum, learned counsel for the Decree Holder would contend
that throughout the entire lifecycle of the project, there existed a
common and inseparable thread running through Judgment Debtor
Nos. 1 to 6, constituting a single economic and commercial unit with a
unified business objective, centralized financial control and common
management.
15. He would further contend that the operational, financial and
managerial activities of the group entities were inextricably
interlinked, and that the ultimate and real beneficiary of the
contractual relationship and the works executed by the Decree Holder
was not Judgment Debtor No. 1 in isolation, but Judgment Debtor No.
2 and the other group entities acting in concert.
16. Learned counsel for the Decree Holder would lastly place
reliance on the judgment of the Bombay High Court in Bhatia
Industries & Infrastructure Limited v. Asian Natural Resources
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(India) Limited9, particularly paragraph no. 19 thereof, to submit that
all the circumstances enumerated therein for lifting the corporate veil
stand fully satisfied in the present case. He would submit that this
Court would therefore be justified in piercing the corporate veil and
directing execution of the Award jointly and severally against
Judgment Debtor Nos. 2 to 6, in order to prevent abuse of corporate
form and to secure the ends of justice. For ready reference, the
relevant portion of the aforesaid Judgement is reproduced
hereinunder:
“19. From the conspectus of the judgments which are referred to
hereinabove, it is now quite well-settled that the doctrine of
piercing or removing corporate veil is applicable not only in the
case of holding of subsidiary companies or in the case of tax
evasion but can be equally applied in execution proceedings. It can
be seen from these judgments that the doctrine has been referred to
also in cases:
(i) where “two separate corporate entities are functioning as if
they are in partnership with one company as an alter ego
of the other company, where one company is bound hand
and foot by the other”;
(ii) where “parent company’s management has steering
influence on the subsidiary’s core activities that the
subsidiary can no longer be regarded to perform those
activities on the authority of its own executive directors”;
(iii) where “the company is the creature of the group and the
mask which is held before its face in an attempt to avoid
recognition by the eye of equity or is a mere cloak or sham
and in truth the business was being carried on by one
person and not by the company as a separate entity”; and
(iv) where “two companies are inextricably interlinked
corporate entities”.
We therefore hold that the concept of lifting the corporate veil is
also available in execution proceedings and answer question No. 1
above accordingly.”
CONTENTIONS ON BEHALF OF THE JUDGEMENT
DEBTORS:
9
2016 SCC OnLine Bom 10695
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17. Per contra, Mr. Rajshekhar Rao, learned senior counsel leading
for the Judgment Debtors, would contend that the present execution
petition is wholly misconceived and not maintainable in law.
18. He would submit that the arbitral proceedings culminating in
the Arbitral Award were admittedly and exclusively between the
Decree Holder and Judgment Debtor No. 1 (Sinnar Thermal Power
Limited) alone, and at no point of time were Judgment Debtor Nos. 2
to 6 either parties to the arbitration agreement or impleaded in the
arbitral proceedings.
19. In support thereof, learned senior counsel would place reliance,
inter alia, on the judgment of this Court in Tomorrow Sales Agency
Private Limited v. SBS Holdings Inc.10, as well as the judgment of the
Bombay High Court in IMAX Corporation v. E-City Entertainment
(I) Pvt. Limited and Others11, to submit that non-signatories and non-
parties to the arbitration cannot be proceeded against at the stage of
execution.
20. He would further contend that the settled position of law, as
reiterated in the aforesaid judgments, is that an arbitral award can be
enforced only against parties to the arbitration agreement and against
whom the award has been passed.
21. Learned senior counsel would submit that, even assuming
arguendo that Judgment Debtor Nos. 2 to 6 had any form of
association with Judgment Debtor No. 1, the Decree Holder, despite
having full knowledge of such alleged involvement from the very
inception, consciously chose neither to implead them in the arbitration
proceedings nor to raise any plea seeking extension of liability during
10
2023 SCC OnLine Del 3191
11
2024 SCC OnLine Bom 3555
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the course of arbitral adjudication, and having so elected, the Decree
Holder is now estopped from seeking to enlarge the scope of the
Award at the stage of execution.
22. Learned senior counsel would thereafter contend that the
Decree Holder, having voluntarily and with full knowledge, elected to
lodge its claim before the Resolution Professional of Judgment Debtor
No. 1 during the CIRP, is precluded from seeking to realise the same
amounts through parallel execution proceedings under Section 36 of
the A&C Act.
23. He would submit that upon culmination of the CIRP and
approval of the Resolution Plan by the learned NCLT, albeit
subsequent to the filing of the present execution proceedings,
Judgment Debtor No. 1 is nevertheless entitled to the benefit of the
“clean slate” principle as recognised under Section 31 of the IBC, and
the Decree Holder cannot be permitted to indirectly undo or
circumvent the binding effect of the approved Resolution Plan by
pursuing execution proceedings in a roundabout manner.
24. Learned senior counsel would further contend that the Decree
Holder, with open eyes and with full awareness of the statutory
consequences, chose to submit its claim as an operational creditor
under the IBC. He would submit that the statutory waterfall
mechanism, as provided under Section 53 of the IBC, consciously
places operational creditors at a lower pedestal, and this is a
consequence flowing from the legislative scheme. Having exercised
this choice, the Decree Holder cannot now be permitted to resile
therefrom or to seek preferential recovery by invoking execution
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proceedings after having failed to secure full satisfaction under the
Resolution Plan.
25. Learned senior counsel would further submit that Judgment
Debtor No. 1 is a distinct and independent juristic entity and that the
mere fact of shareholding or past corporate association cannot render
Judgment Debtor Nos. 2 to 6 as “persons claiming under” Judgment
Debtor No. 1 within the meaning of Section 35 of the A&C Act. He
would further submit that the interpretation sought to be advanced by
the Decree Holder would effectively obliterate the doctrine of separate
legal entity and impermissibly expand the statutory scope of
enforcement.
26. He would submit that, even as per the law laid down in the
aforesaid judgments cited by the Decree Holder, the corporate veil can
be lifted only where there is cogent material demonstrating that the
judgment debtor is deliberately seeking to defeat or frustrate the
execution of the award by abusing the corporate form, and in the
present case, there is no material whatsoever to establish fraud, sham,
façade, or dishonest diversion of assets by Judgment Debtor No. 1 so
as to warrant such an extreme exercise.
27. Learned senior counsel would contend that the judgment in
Cheran Properties (supra), as relied upon by the Decree Holder, is
wholly inapplicable in the present factual matrix, as in that case the
party sought to be bound was a nominee/transferee deriving title
through a signatory and therefore fell within Section 35 of the A&C
Act as a “person claiming under” the award debtor. Whereas, in the
present case, Judgement Debtor No. 2 is neither a party to the
arbitration agreement, nor to the arbitral proceedings or the Award,
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and does not claim through or under Judgement Debtor No. 1 by way
of any assignment or nomination.
28. Learned senior counsel, therefore, would submit that the
attempt to implead Judgement Debtor No. 2 at the stage of Section 36
is not the implementation of the Award but an impermissible
expansion thereof, and that mere shareholding or control cannot be
equated with “claiming under” a party.
29. Lastly, learned senior counsel would contend that it is
impermissible for an executing court to go behind the decree or award
and to conduct a fact-finding inquiry of the nature sought by the
Decree Holder. He would submit that the present execution petition, in
effect, seeks a fresh adjudication on liability against non-parties,
which is wholly beyond the jurisdiction of an executing court. In
support of this submission, learned senior counsel would rely upon the
judgment of the Hon‟ble Supreme Court in MMTC Limited vs. Anglo
American Metallurgical Coal Pvt Ltd12, to submit that execution
proceedings must remain confined strictly to giving effect to the
decree as it stands and cannot be converted into a trial.
ANALYSIS:
30. This Court has heard the learned counsel appearing for the
parties at length and, with their able assistance, carefully perused the
pleadings, the documents placed on record, and the relevant statutory
provisions and precedents governing the field.
31. It is an undisputed fact that the Decree Holder had submitted its
claim in respect of the Arbitral Award before the Resolution
Professional during the CIRP. The said claim was duly admitted as
12
2025 SCC OnLine SC 2328
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part of the resolution process, whereafter the CIRP proceeded further
and a Resolution Plan, upon approval by the Committee of Creditors,
came to be placed before the learned NCLT for its approval. At a
stage when the NCLT was on the verge of approving the Resolution
Plan, the Decree Holder chose to file the present execution petition, in
the alternative, seeking enforcement of the Arbitral Award against
parties who were never arrayed as parties to the arbitral proceedings
and for an Award which was passed solely against Judgment Debtor
No. 1.
32. It is further an undisputed fact that within one month of the
filing of the present enforcement petition before this Court, the learned
NCLT approved the Resolution Plan.
33. Upon a holistic consideration of the matter, this Court is of the
considered view that the present execution petition is fundamentally
misconceived and, if entertained, would amount to a misuse of the
judicial process. The petition not only seeks reliefs impermissible in
law but also attempts to circumvent a statutory regime that accords
finality to insolvency resolution.
34. At the outset, it must be emphasised that the present
proceedings run directly contrary to the mandate of Section 31 of the
IBC. Once a Resolution Plan has been approved by the Adjudicating
Authority/ NCLT, it attains statutory finality and becomes binding on
all stakeholders, including operational creditors such as the Decree
Holder. Any grievance with respect to the treatment of claims under
the Resolution Plan lies exclusively within the appellate framework
under the IBC. This court is of the opinion that permitting collateral
challenges through execution proceedings would render the
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insolvency framework nugatory. Section 31 of the IBC is reproduced
hereinbelow for reference:
31. Approval of resolution plan – (1) If the Adjudicating
Authority is satisfied that the resolution plan as approved by the
committee of creditors under sub-section (4) of section 30 meets
the requirements as referred to in sub-section (2) of section 30, it
shall by order approve the resolution plan which shall be binding
on the corporate debtor and its employees, members,
creditors, [including the Central Government, any State
Government or any local authority to whom a debt in respect of the
payment of dues arising under any law for the time being in force,
such as authorities to whom statutory dues are
owed,] guarantors and other stakeholders involved in the resolution
plan.
[Provided that the Adjudicating Authority shall, before
passing an order for approval of resolution plan under this sub-
section, satisfy that the resolution plan has provisions for its
effective implementation.]
(2) Where the Adjudicating Authority is satisfied that the
resolution plan does not confirm to the requirements referred to in
sub-section (1), it may, by an order, reject the resolution plan.
(3) After the order of approval under sub-section (1),:-
(a) the moratorium order passed by the Adjudicating Authority
under section 14 shall cease to have effect; and
(b) the resolution professional shall forward all records relating
to the conduct of the corporate insolvency resolution
process and the resolution plan to the Board to be recorded
on its database.
[(4) The resolution applicant shall, pursuant to the resolution plan
approved under sub-section (1), obtain the necessary approval
required under any law for the time being in force within a period
of one year from the date of approval of the resolution plan by the
Adjudicating Authority under sub-section (1) or within such period
as provided for in such law, whichever is later.
Provided that where the resolution plan contains a provision
for combination, as referred to in section 5 of the Competition Act,
2002, the resolution applicant shall obtain the approval of the
Competition Commission of India under that Act prior to the
approval of such resolution plan by the committee of creditors.]”
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35. Once a Resolution Plan is approved by the learned NCLT, it
attains statutory finality and becomes binding on all stakeholders,
including “other stakeholders involved in the resolution plan”, in
terms of Section 31 of the IBC. There is no manner of dispute that the
Decree Holder was a stakeholder in the CIRP proceedings, having not
only participated therein but also having consciously submitted its
claim arising out of the Arbitral Award before the Resolution
Professional. Upon such approval, all claims, demands, and liabilities
pertaining to the period prior to the commencement of the CIRP stand
dealt with and resolved in accordance with the Resolution Plan, and
no stakeholder is entitled to assert any right or remedy dehors the said
Plan.
36. The present petition, therefore, suffers from a fundamental
infirmity, as the amounts sought to be realised herein form part of the
very claims arising out of the Arbitral Award which were submitted
by the Decree Holder before the Resolution Professional and were
duly admitted during the CIRP. Having consciously elected to invoke
the insolvency resolution mechanism for satisfaction of the arbitral
award, and being fully cognisant of the fact that under the CIRP
framework its claim would stand resolved, reduced, or proportionately
minimised in accordance with the Resolution Plan, the Decree Holder
cannot thereafter be permitted to maintain an independent execution
proceeding for the same cause of action. The law does not
countenance such parallel or collateral proceedings.
37. This position is further fortified by the statutory moratorium
that comes into operation upon admission of the corporate debtor into
the CIRP. An arbitral award, irrespective of its finality under the A&C
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Act, constitutes a “claim” within the meaning of the IBC. Section 3(6)
of the IBC defines “claim” as under:
“3. …..
(6) “claim” means–
(a) a right to payment, whether or not such right is reduced
to judgment, fixed, disputed, undisputed, legal, equitable, secured
or unsecured;
(b) right to remedy for breach of contract under any law for
the time being in force, if such breach gives rise to a right to
payment, whether or not such right is reduced to judgment, fixed,
matured, unmatured, disputed, undisputed, secured or unsecured;”
38. Once a party lodges a claim before the Resolution Professional
seeking satisfaction of an arbitral award, such conduct, in substance
and effect, amounts to invoking the enforcement mechanism
contemplated under insolvency law. To thereafter pursue execution
under Section 36 of the A&C Act would amount to duplicative and
impermissible enforcement, which the law does not allow.
39. Permitting such parallel pursuit would strike at the very core of
the “clean slate” doctrine that underpins the insolvency regime. This
doctrine is not merely an equitable consideration but a structural
imperative of insolvency law, intended to ensure that a successful
resolution applicant is not burdened with undecided, residual, or
revived claims. The legal position in this regard has been succinctly
laid down by the Hon‟ble Supreme Court in Electrosteel Steel Limited
v. Ispat Carrier Private Limited13, which reads as under:
“39. At the outset, let us examine a few relevant provisions of the
IBC.
13
(2025) 7 SCC 773
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40. Section 30 provides for submission of resolution plan. As per
sub-section (1), a resolution applicant may submit a resolution plan
alongwith an affidavit stating that he is eligible under Section 29-A
to the resolution professional prepared on the basis of the
information memorandum in terms of Section 29. Sub-section (2)
says that the resolution professional shall examine each resolution
plan received by him to confirm that such resolution plan complies
with the requirement of clauses (a) to (f) of the said sub-section.
Thereafter the resolution professional is required under sub-section
(3) to present the resolution plans which are in conformity with the
requirements of sub-section (2) to the Committee of Creditors for
its approval. Sub-section (4) mandates that the
Committee of Creditors may approve a resolution plan by
vote of not less than 66% of the voting share of the financial
creditors after considering its feasibility and viability. The
resolution applicant may also attend such meeting of the
Committee of Creditors though it shall not have the right to vote
unless it is also a financial creditor [sub-section (5)]. Once the
resolution plan is approved by the Committee of Creditors, the
resolution professional shall submit the same to the adjudicating
authority in terms of sub-section (6).
41. Section 31 deals with approval of resolution plan. As per sub-
section (1), if the adjudicating authority is satisfied that the
resolution plan as approved by the Committee of Creditors meets
the requirement of sub-section (2) of Section 30, it shall by order
approve the resolution plan. Once the resolution plan is approved
by the adjudicating authority, it shall be binding on the corporate
debtor and its employees, members, creditors including the Central
Government, any State Government or any local authority to whom
a debt including statutory dues are owed, guarantors and other
stakeholders involved in the resolution plan. However, before
passing an order of approval, the adjudicating authority has to
satisfy itself that the resolution plan has provisions for its effective
implementation. Under sub-section (2), if the adjudicating
authority is satisfied that the resolution plan does not conform to
the requirements referred to in sub-section (1), it may by an order
reject the resolution plan. Sub-section (3) provides that once the
resolution plan is approved under sub-section (1), the moratorium
order passed by the adjudicating authority under Section 14 shall
cease to have effect.
42. Under Section 32, any appeal from an order approving the
resolution plan shall be in the manner and on the grounds laid
down in sub-section (3) of Section 61. Section 61 provides for
appeals and appellate authority. Sub-section (1) says that any
person aggrieved by an order of the adjudicating authority may
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prefer an appeal to the National Company Law Tribunal (NCLT)
within thirty days as provided in sub-section (2). Be it stated that
National Company Law Tribunal (NCLT) constituted under
Section 408 of the Companies Act, 2013 is the adjudicating
authority as defined in Section 5(1) IBC. Sub-section (3) deals with
an appeal against an order approving a resolution plan under
Section 31. It says that such an appeal can be filed on the following
grounds:
(i) the approved resolution plan is in contravention of the
provisions of any law for the time being in force;
(ii) there has been material irregularity in exercise of the
powers by the resolution professional during the corporate
insolvency resolution period;
(iii) the debts owed to operational creditors of the
corporate debtor have not been provided for in the
resolution plan in the manner specified by the Insolvency
and Bankruptcy Board of India established under Section
188(1);
(iv) the insolvency resolution process costs have not been
provided for repayment in priority to all other debts; or
(v) the resolution plan does not comply with any other
criteria specified by the Insolvency and Bankruptcy
Board of India.
43. Section 238 IBC clarifies that provisions of IBC shall have
effect notwithstanding anything inconsistent therewith contained in
any other law for the time being in force or any instrument having
effect by virtue of any such law.
44. In Essar Steel (India) Ltd. (CoC) v. Satish Kumar Gupta,
(2020) 8 SCC 531, a three-Judge Bench of this Court examined
amongst others the role of resolution applicants, resolution
professionals and the Committee of Creditors constituted under the
IBC as well as the jurisdiction of NCLT and Nclat qua resolution
plans approved by the Committee of Creditors. After an elaborate
and exhaustive analysis of various provisions of IBC, the Bench
concluded that a successful resolution applicant cannot suddenly be
faced with “undecided” claims after the resolution plan submitted
by him has been accepted. This would amount to a hydra head
popping up which would throw into uncertainty amounts payable
by a prospective resolution applicant. All claims must be submitted
to and decided by the resolution professional so that a prospective
resolution applicant knows exactly what has to be paid in order that
it may then take over and run the business of corporate debtor.
45. Para 107 of the said decision in Essar Steel reads as under:
(SCC p. 616)
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“107. For the same reason, the impugned Nclat judgment
in holding that claims that may exist apart from
those decided on merits by the resolution professional and
by the adjudicating authority/Appellate Tribunal can now
be decided by an appropriate forum in terms of Section
60(6) of the Code, also militates against the
rationale of Section 31 of the Code. A successful
resolution applicant cannot suddenly be faced with
“undecided” claims after the resolution plan submitted by
him has been accepted as this would amount to a hydra
head popping up which would throw into uncertainty
amounts payable by a prospective resolution applicant
who would successfully take over the business of the
corporate debtor. All claims must be submitted to
and decided by the resolution professional so that a
prospective resolution applicant knows exactly what has to
be paid in order that it may then take over and run the
business of the corporate debtor. This the successful
resolution applicant does on a fresh slate, as has been
pointed out by us hereinabove. For these
reasons, Nclat judgment must also be set aside on this
count.”
*****
47. In that case, the Bench in Ghanashyam Mishra & Sons (P)
Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC
657 concluded by holding 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 the resolution plan by the
adjudicating authority, all such claims which are not a 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. The Bench declared that all
dues including 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 proceeding 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.
48. Para 102 of the aforesaid decision reads thus: (Ghanashyam
Mishra case11, SCC p. 716)
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“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 the 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.
***
102.3. 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.”
49. In Ruchi Soya Industries Ltd. v. Union of India, (2022) 6 SCC
343, a two-Judge Bench of this Court referred to the decision
in Ghanshyam Mishra (supra) and thereafter declared that on the
date on which the resolution plan was approved by NCLT, all
claims stood frozen and no claim, which is not a part of the
resolution plan, would survive.
50. A three-Judge Bench of this Court in Ajay Kumar
Radheyshyam Goenka v. Tourism Finance Corpn. of India Ltd.,
(2023) 10 SCC 545 held that a creditor has no option but to join the
process under the IBC. Once the plan is approved, it would bind
everyone under the sun. The making of a claim under IBC and
accepting the same and not making any claim will not make any
difference in the light of Section 31 IBC. Both the situations will
lead to Section 31 and the finality and binding value of the
resolution plan.
51. Para 62 of the said decision in Ajay Kumar Radheyshyam
Goenka is extracted hereunder: (SCC p. 576)
“62. Thus, from the aforesaid, it is evident that the creditor
has no option but to join the process under IBC. Once the
plan is approved, it would bind everyone under the sun.
The making of a claim and accepting whatever share is
allotted could be termed as an “Involuntary
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Act” on behalf of the creditor. The making of a claim
under the IBC and accepting the same and not making any
claim, will not make any difference in light of Section 31
IBC. Both the situations will lead to Section 31 and the
finality and binding value of the resolution plan.”
52. In a recent decision, a two-Judge Bench of this Court decided a
contempt application in JSW Steel Ltd. v. Pratishtha Thakur
Haritwal, (2025) 9 SCC 673. The contention of the petitioner was
that the respondents had wilfully disobeyed the judgment of this
Court in Ghanashyam Mishra11 by issuing demand notices
pertaining to the period covered by the corporate insolvency
resolution process. In the above context, the Bench reiterated what
was held in Ghanashyam Mishra11 which has been followed in
subsequent decisions and thereafter declared that all claims which
are not part of the resolution plan shall stand
extinguished. No person will be entitled to initiate or continue any
proceeding in respect to a claim which is not part of the resolution
plan. Though the Bench did not take any action for contempt in
view of the unconditional apology made by the respondents
nonetheless the Bench reiterated the proposition laid down
in Ghanashyam Mishra11 clarifying that even if any stakeholder
is not a party to the proceedings before NCLT and if such
stakeholder does not raise its claim before the interim resolution
professional/resolution professional, the resolution plan as
approved by NCLT would still be binding on him.
*****
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 (India) Ltd.
(CoC) v. Satish Kumar Gupta, (2020) 8 SCC 531 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
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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.”
(emphasis supplied)
40. It is manifest from the record that the Decree Holder
consciously and with full awareness elected to submit its claim arising
out of the Arbitral Award before the Resolution Professional during
the CIRP of Judgment Debtor No. 1. The Decree Holder, therefore,
unequivocally subjected itself to the statutory framework of the IBC,
which governs the manner, extent, and priority of satisfaction of
claims against a corporate debtor undergoing insolvency resolution.
41. Having taken such a conscious decision, the Decree Holder was
fully aware, or at the very least ought to have been aware, that its
claim would be dealt with strictly in accordance with the provisions of
the IBC, including the possibility that the claim may stand resolved,
reduced, or proportionately satisfied in terms of an approved
Resolution Plan.
42. However, upon realising that the outcome of the CIRP may not
yield full satisfaction of its claim as originally awarded, the Decree
Holder chose to initiate the present execution proceedings by
impleading entities who were never parties to the arbitral proceedings,
nor impleaded at any stage of the arbitral adjudication, and against
whom no arbitral award was ever rendered. The timing and manner in
which the present proceedings have been instituted clearly
demonstrate a calculated attempt to bypass the insolvency framework
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and to resurrect or enlarge liabilities in a manner wholly alien to the
scheme of the IBC.
43. The conduct of the Decree Holder assumes greater significance
in light of the fact that, until a particular point in time, no allegation
whatsoever was raised against the additional parties now sought to be
proceeded against in execution. No plea of fraud, sham, façade, lifting
of the corporate veil, or extension of liability was ever urged before
the arbitral tribunal or any other competent forum.
44. These grounds have been raised for the first time only after the
CIRP had substantially progressed and the Resolution Plan was on the
verge of approval. Such belated assertions, sought to be introduced at
the stage of execution, cannot be permitted to alter the contours of the
arbitral award or to rewrite the scope of liability determined therein.
Allowing such a course would effectively enable the Decree Holder to
re-agitate and reconfigure issues that already stand finally concluded.
45. In its totality, permitting execution of an arbitral award for
amounts exceeding, varying from, or inconsistent with those
crystallised under an approved Resolution Plan would lead to grave
and irreconcilable legal contradictions. First, it would directly
undermine the finality accorded to claims under the IBC, which is a
foundational principle of the insolvency regime. Second, it would
impose legacy liabilities upon a successful resolution applicant
without any adjudicatory determination or opportunity of contest,
thereby defeating the very purpose of resolution. Third, it would
fracture the certainty, predictability, and commercial confidence that
the insolvency framework seeks to restore to economic life by
ensuring that all past liabilities are conclusively dealt with at one point
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in time. The insolvency regime cannot function effectively if claims
are permitted to resurface in different forms and fora after the
resolution process has concluded.
46. The Decree Holder, having been an active and conscious
participant in the CIRP, cannot now be permitted to do indirectly what
it could not have done directly under law. It is a settled and well-
established principle that what is impermissible to be achieved directly
cannot be allowed to be achieved through indirect or circuitous means.
47. By seeking execution of the arbitral award outside the confines
of the approved Resolution Plan, and against parties who were never
subjected to arbitral adjudication, the Decree Holder is, in effect,
attempting to nullify the binding effect of the insolvency resolution
process. Such an approach, if accepted, would render the statutory
framework of the IBC otiose and encourage forum shopping,
multiplicity of proceedings, and perpetual uncertainty.
48. It is also pertinent to note that the IBC provides a complete and
efficacious machinery for redressal of grievances arising during the
CIRP. If the Decree Holder was aggrieved by the treatment of its
claim, the conduct of the Resolution Professional, or any aspect of the
Resolution Plan, the IBC provides specific remedies before the
appropriate forums, including the Adjudicating Authority and the
Appellate Tribunal. The Decree Holder, however, consciously chose
not to avail of such remedies and instead sought to initiate a parallel
execution proceeding before this Court.
49. Allowing the present execution proceedings to continue would
not only defeat the binding effect of the approved Resolution Plan but
would also strike at the heart of the “clean slate” doctrine, which
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forms an integral and indispensable part of insolvency jurisprudence.
Any deviation from this principle would erode confidence in the
insolvency regime and discourage genuine resolution efforts.
50. This Court also finds considerable merit in the submission
advanced by the learned senior counsel for the Judgment Debtor No. 2
that the Decree Holder was fully cognisant, from the very inception of
the contractual relationship, of the corporate structure, ownership
pattern, and functioning of Judgment Debtor No. 1. The Decree
Holder‟s own pleadings, as well as its express reliance on public
disclosures and corporate records, unequivocally demonstrate such
awareness.
51. Despite possessing this knowledge throughout the subsistence
of the contractual relationship and during the arbitral proceedings, the
Decree Holder consciously chose not to take any steps in law that
were otherwise available and permissible at the relevant time. It is
only upon realising that its claim may stand reduced or otherwise dealt
with under the approved Resolution Plan that the Decree Holder has
sought to alter its legal position. Such conduct clearly reflects an
attempt to approbate and reprobate, which is impermissible in law and
strikes at the principle of consistency in legal proceedings.
52. Even assuming, arguendo, that the allegations sought to be
advanced by the Decree Holder regarding pervasive control or
dominant influence exercised by Judgment Debtor No. 2, or Judgment
Debtor Nos. 3 to 6, were to be accepted at face value, the conduct of
the Decree Holder remains decisive. Despite having full knowledge of
such alleged control, the Decree Holder never sought to implead
Judgment Debtor No. 2 or any of the other group entities during the
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arbitral proceedings. No claim was raised against them, no relief was
sought, and no adjudication was invited with respect to their alleged
liability. The Decree Holder, therefore, consciously confined the
arbitral proceedings to Judgment Debtor No. 1 alone.
53. This Court is of the considered view that arbitration, in its very
essence, is founded upon the principle of consent. It is an admitted
position that Judgment Debtor No. 2 was not a signatory to the
arbitration agreement. Even assuming that the doctrine of binding
non-signatories could have been invoked on the facts of the case, it
was incumbent upon the Decree Holder to raise, plead, and pursue
such a contention during the arbitral proceedings themselves. Having
consciously elected not to do so, the Decree Holder cannot now, at the
stage of execution, particularly after the CIRP of Judgment Debtor
No. 1, seek to expand or recast the scope of the arbitral award by
fastening liability upon a non-party to the arbitration agreement.
54. The sequence of events, when examined in its entirety, only
serves to underscore the fundamental infirmity in the Decree Holder‟s
case. The contractual relationship between the parties traces its origin
to the year 2010, and the Decree Holder continued to transact with
Judgment Debtor No. 1 for nearly nine years thereafter. Despite this
prolonged and continuous association, when arbitration was ultimately
invoked in 2019, the Decree Holder consciously confined its claims
exclusively against Judgment Debtor No. 1. At no point did it seek to
implead or claim relief against the other entities which are now sought
to be proceeded against at the execution stage. This deliberate and
informed election at the stage of arbitration cannot be disregarded or
undone at a later stage.
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55. Equally significant is the fact that the very documents now
sought to be relied upon by the Decree Holder, namely, annual reports,
corporate disclosures, and other public records, were all in existence
and available well before, and during the pendency of, the arbitral
proceedings. Having failed to act upon such material at the appropriate
stage and forum, the Decree Holder cannot now be permitted to cure
its own omissions by invoking the limited and circumscribed
jurisdiction of an executing court, whose role is confined to
enforcement of the award as it stands and not to re-examine or enlarge
the scope of liability determined therein.
56. It is pertinent to note that at no point in time has any material
been placed on record by the Decree Holder to demonstrate that the
Judgment Debtors, or Judgment Debtor No. 1 in particular, have
committed any fraud or engaged in any sham, façade, or dishonest
diversion of assets so as to warrant the extraordinary exercise of lifting
the corporate veil. All relevant facts pertaining to the corporate
structure, shareholding pattern, and functioning of Judgment Debtor
No. 1 were within the knowledge of the Decree Holder from the very
inception of the contractual relationship.
57. The decisions taken by the Decree Holder were, therefore,
conscious and informed decisions, made with eyes wide open. Having
so elected, the Decree Holder cannot now approach this Court seeking
to disregard the separate legal personality of the corporate entity
without laying any factual foundation or advancing cogent pleadings
in support of such an exceptional relief.
58. This Court is in complete agreement with the submission that
the factual matrix of the present case does not justify the lifting of the
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corporate veil. The power to disregard corporate personality is an
exceptional one and must be exercised sparingly, with great
circumspection, and only upon a clear, specific, and compelling
demonstration that the corporate form has been deliberately abused to
perpetrate fraud, evade legal obligations, or defeat the ends of justice.
Mere allegations of association, shareholding, or corporate linkage,
absent such a demonstration, are wholly insufficient to justify such an
extreme course.
59. In the present case, there is a conspicuous absence of pleadings,
much less evidence, to indicate that Judgment Debtor No. 1 has
misused the corporate structure with the intent of defeating or
frustrating the execution of the arbitral award. There are no averments
of sham transactions, fraudulent conduct, or deliberate diversion of
assets aimed at placing the assets of the corporate debtor beyond the
reach of lawful enforcement. In the absence of such foundational
facts, there is no occasion for this Court to embark upon the exercise
so strenuously urged by the Decree Holder.
60. This Court must also remain mindful of the well-settled
principle that an executing court cannot travel beyond the decree or
award sought to be enforced. To undertake a roving or fact-finding
inquiry into issues such as control, dominance, economic unity, or
group liability at the stage of execution would be to convert execution
proceedings into a full-fledged trial, an exercise that is wholly
impermissible in law. The jurisdiction of an executing court is
confined to enforcing the decree as it stands and does not extend to
enlarging the scope of liability or adjudicating fresh disputes. The law
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in this regard has been succinctly laid down in MMTC Limited
(supra), which reads as under:
“97. We are dealing with an objection filed under Section 47
claiming that the award as upheld by this Court is inexecutable. As
held by this Court in Electrosteel (Supra) the jurisdiction lies in a
narrow compass. It is the mandate of this Court that the object of
Section 47 is to prevent unwarranted litigation and dispose of all
objections as expeditiously as possible. This Court has warned that
there is a steady rise of proceedings akin to a retrial which causes
failure of realization of the fruits of a decree, unless prima facie
grounds are made out entertaining objections under Section 47
would be an abuse of process.
98. An objection petition under Section 47 should not invariably be
treated as a commencement of a new trial. In Rahul S.
Shah v. Jinendra Kumar Gandhi, this Court had the following
telling observations to make.
“24. In respect of execution of a decree,
Section 47 CPC contemplates adjudication of limited
nature of issues relating to execution i.e. discharge or
satisfaction of the decree and is aligned with the
consequential provisions of Order 21 CPC. Section 47 is
intended to prevent multiplicity of suits. It simply lays
down the procedure and the form whereby the court
reaches a decision. For the applicability of the section, two
essential requisites have to be kept in mind. Firstly, the
question must be the one arising between the parties
and secondly, the dispute relates to the execution,
discharge or satisfaction of the decree. Thus, the objective
of Section 47 is to prevent unwanted litigation and dispose
of all objections as expeditiously as possible.
25. These provisions contemplate that for execution of
decrees, executing court must not go beyond the decree.
However, there is steady rise of proceedings akin to a
retrial at the time of execution causing failure of
realisation of fruits of decree and relief which the party
seeks from the courts despite there being a decree in their
favour. Experience has shown that various objections are
filed before the executing court and the decree-holder is
deprived of the fruits of the litigation and the judgment-
debtor, in abuse of process of law, is allowed to benefit
from the subject-matter which he is otherwise not entitled
to.
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courts first issue show-cause notice asking the judgment-
debtor as to why the decree should not be executed as is
given under Order 21 Rule 22 for certain class of cases.
However, this is often misconstrued as the beginning of a
new trial. For example, the judgment-debtor sometimes
misuses the provisions of Order 21 Rule 2 and Order 21
Rule 11 to set up an oral plea, which invariably leaves no
option with the court but to record oral evidence which
may be frivolous. This drags the execution proceedings
indefinitely.
27. This is antithesis to the scheme of the Civil Procedure
Code, which stipulates that in civil suit, all questions and
issues that may arise, must be decided in one and the same
trial. Order 1 and Order 2 which relate to parties to suits
and frame of suits with the object of avoiding multiplicity
of proceedings, provides for joinder of parties and joinder
of cause of action so that common questions of law and
facts could be decided at one go.”
61. So far as the reliance placed by the Decree Holder upon Cheran
Properties (supra) is concerned, the same is wholly misplaced and
inapplicable to the present factual matrix. In Cheran Properties
(supra), the party sought to be bound by the arbitral award was an
express nominee deriving title directly through a signatory to the
arbitration agreement and, therefore, squarely fell within the ambit of
Section 35 of the A&C Act, as a “person claiming under” the award
debtor.
62. In stark contrast, in the present case, Judgment Debtor Nos. 2 to
6 do not claim any right, title, or interest through or under Judgment
Debtor No. 1 by way of assignment, nomination, or succession. Most
significantly, Judgment Debtor No. 1 has since undergone the CIRP,
in which the Decree Holder actively participated, thereby subjecting
its claim to the statutory framework of the IBC. On these fundamental
distinctions alone, Cheran Properties (supra) is clearly
distinguishable and affords no assistance to the Decree Holder.
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63. Similarly, the reliance placed upon Cox & Kings (supra) by the
Decree Holder, wherein the Hon‟ble Supreme Court examined and
delineated the contours of the “group of companies” doctrine in Indian
arbitral jurisprudence, is equally misplaced. The said judgment makes
it abundantly clear that the doctrine is not one of automatic or blanket
application and can be invoked only upon satisfaction of multiple
stringent factors, including mutual intent, conduct of the parties, and
the circumstances surrounding the execution and performance of the
contract. The present case does not even warrant an enquiry into the
applicability of the said doctrine, as the factual substratum on which
such an exercise could be undertaken is wholly absent. The case at
hand rests on entirely different and independent footings.
64. Likewise, the judgment in Bhatia Industries & Infrastructure
Limited (supra), so vehemently relied upon by the Decree Holder, is
materially distinguishable on several counts. First and foremost, the
said decision did not arise in the context of a CIRP culminating in the
approval of a Resolution Plan. In the present case, Judgment Debtor
No. 1 has admittedly undergone the CIRP, and the Decree Holder
consciously and actively participated therein. Notably, it was only
when the Resolution Plan was on the verge of approval, and the
Decree Holder apprehended that its claim would not be fully resolved
in accordance with the insolvency framework, that the plea for lifting
the corporate veil was sought to be advanced. Such a belated
invocation fundamentally alters the legal complexion of the case and
renders the reliance on Bhatia Industries & Infrastructure Limited
(supra) wholly misconceived.
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65. There can be no quarrel with the settled proposition that, in
compelling and exceptional cases, the corporate veil may be lifted
even at the stage of execution; however, such an exercise is
necessarily contingent upon the existence of strong factual
foundations and extraordinary circumstances demonstrating fraud,
sham, or deliberate abuse of the corporate form. No such
circumstances exist in the present case. The Decree Holder‟s reliance
on isolated observations or general principles culled out from Bhatia
Industries & Infrastructure Limited (supra), divorced from the
factual context in which they were rendered, does not advance its case.
66. Viewed in this light, both on first principles and in terms of
binding precedent, the present petition is not merely untenable in law
but strikes at the very coherence and integrity of the statutory
framework governing arbitration and insolvency. The attempt to
reopen issues that stand conclusively settled, to impermissibly enlarge
the scope of the arbitral award at the stage of execution beyond the
limits permissible in law, and to circumvent the discipline, finality,
and binding effect of the insolvency regime cannot be countenanced.
CONCLUSION:
67. For all the aforesaid reasons, this Court is of the considered
view that the present petition is liable to be dismissed. The reliefs
sought are wholly misconceived, legally untenable, and impermissible
at the stage of execution, particularly in light of the settled legal
position governing the binding consequences flowing from the
insolvency resolution process.
68. Having regard to the nature of the proceedings, the manner in
which the reliefs have been pursued, the belated and impermissible
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attempt to reopen issues, and the serious consequences that would
ensue if such claims were entertained at the stage of execution, this
Court deems it appropriate to dismiss the present petition with costs.
69. Accordingly, a cost of ₹1,00,000/- is imposed upon the Decree
Holder, payable to Judgement Debtors within a period of two weeks
from the date of this Order.
70. Pending application, if any, also stands dismissed.
HARISH VAIDYANATHAN SHANKAR, J.
FEBRUARY 11, 2026/nd/sm/kr
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
OMP (ENF.) (COMM.) 237/2025 Page 34 of 34
BHATIA
Signing Date:13.02.2026
17:11:19