This legal case revolves around a dispute between the appellant and M/s KST Infrastructure Private Limited (referred to as ‘the Corporate Debtor’) over land development. The appellant alleged misconduct by the Corporate Debtor and initiated arbitration in 2011, resulting in a favorable award in 2016.

The award mandated the Corporate Debtor to transfer licenses to the appellant, but the Corporate Debtor challenged it under Section 34 of the Arbitration and Conciliation Act, 1996. Concurrently, a Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor.

During CIRP, the appellant filed a claim based on the arbitral award against the Corporate Debtor. However, the Resolution Professional rejected the claim as untimely. The appellant then sought approval of the claim, which was denied by the Adjudicating Authority.

The Resolution Professional appealed the Adjudicating Authority’s decision to the National Company Law Appellate Tribunal (NCLAT). NCLAT disagreed with the Adjudicating Authority’s decision, emphasizing proper claim procedures and the appellant’s failure to demonstrate timely filing.

The Supreme Court considered the appellant’s argument that their claim depended on pending arbitration proceedings and that Section 12 of the IBC was not mandatory, citing Essar Steel. Respondent No. 1 contended that the appellant was aware of CIRP procedures, and the resolution plan already addressed claims.

Ultimately, the Supreme Court upheld NCLAT’s decision, emphasizing the importance of timely claims and avoiding unresolved claims after resolution plan approval. The appellant’s appeal was dismissed.

M/s. RPS INFRASTRUCTURE LTD. …Appellant
Versus
MUKUL KUMAR & ANR.
…Respondents decided by the Supreme Court of India on Sept.11, 2023

By aor.sanjivnarang@gmail.com

Sanjiv Narang Adv. is an Advocate on Record in the Supreme Court of India. His qualifications include an LLB from University of Delhi and a Masters degree in Personnel Management from Panjab University,Chandigarh.In his more than 3 decades of experience, he has practiced law at the District, High Court and Supreme Court levels.He also has more than a decade of experience in the field of Management. He is the author of two books namely Laws for Women in India and Innovation, Why What and How.