Tuesday, July 21, 2026

Appointment to teaching or non-teaching posts in aided minority madrasahs made without strict compliance with the prescribed statutory recruitment procedure—including sanctioned vacancy, public advertisement, competent selection process and approval requirements—is void in law and confers no enforceable right to approval, salary or regularisation. The Supreme Court's power under Article 142 cannot be exercised to legitimise such illegal appointments.

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Najma Khatun & Ors. v. State of West Bengal & Ors., 2026 INSC 691

The Supreme Court held that teachers and non-teaching staff appointed in aided minority madrasahs during the interregnum (after the High Court struck down the Madrasah Service Commission Act, 2008, but before and after the Act was ultimately upheld by the Supreme Court) do not acquire any vested or enforceable right to service benefits merely because they were appointed during that period. Their appointments are valid only if they were made strictly in accordance with the governing recruitment rules and statutory notifications.

The Court further laid down the following principles:

Verification of appointments is mandatory. The Committee constituted by the Supreme Court in Snehasis Giri was competent to examine whether each appointment satisfied the prescribed legal requirements, notwithstanding the observations in Sk. Mohd. Rafique.
Compliance with recruitment procedure is mandatory, not directory. Requirements such as:
- existence of a sanctioned vacancy,
- open advertisement in State-level newspapers,
- constitution of a valid Selection Committee,
- communication to the District Inspector of Schools and other competent authorities, and
- appointment by a duly competent Managing Committee,
are essential conditions. Breach of these requirements renders the appointment illegal.
An illegal appointment creates no enforceable legal right. Persons appointed contrary to the statutory procedure cannot invoke Articles 14, 16, 21, or 32 to seek approval of service, salary, or regularisation.
Judicial review over the Committee's findings is limited. The Court will interfere only where the findings are shown to be manifestly perverse or arbitrary. It will not reappreciate disputed questions of fact in every individual case.
Article 142 cannot be used to validate illegal appointments. The power to do complete justice cannot override mandatory statutory recruitment requirements or protect appointments made in violation of law, particularly where public employment and educational standards are involved.

Ratio

Appointment to teaching or non-teaching posts in aided minority madrasahs made without strict compliance with the prescribed statutory recruitment procedure—including sanctioned vacancy, public advertisement, competent selection process and approval requirements—is void in law and confers no enforceable right to approval, salary or regularisation. The Supreme Court's power under Article 142 cannot be exercised to legitimise such illegal appointments.

Whether a plaint can be rejected under Order VII Rule 11 CPC merely because the defendant pleads that the suit is barred by res judicata? - No

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Pandurangan v. T. Jayarama Chettiar & Anr.
2025 INSC 825 : Civil Appeal No. 7743 of 2025
(Decision dated 14 July 2025)

HEAD NOTES

A. Civil Procedure Code, 1908 — Order VII Rule 11(d) — Rejection of plaint — Res judicata — Scope.

Paras 3–12

An application under Order VII Rule 11(d) can be decided only on the basis of the averments contained in the plaint. The defence raised by the defendant, the pleadings in the earlier suit, judgments, or external materials cannot be examined at that stage.

Where determination of res judicata requires examination of previous pleadings, issues, judgment and surrounding circumstances, the plaint cannot be rejected under Order VII Rule 11.

B. Res judicata — Mixed question of law and fact — Trial necessary.

Paras 8–12

The plea of res judicata ordinarily involves examination of—

identity of parties;
identity of issues;
final adjudication;
competence of previous Court;
pleadings and findings in earlier proceedings.

Since these matters require evidence and judicial examination, they cannot ordinarily be decided while considering an application under Order VII Rule 11 CPC.

C. Ex parte decree — Allegation of fraud and collusion.

Paras 6–12

Where the plaint specifically alleges—

fraud,
collusion,
lack of territorial jurisdiction,
decree not binding upon plaintiff,
bona fide purchase,

the Court is required to examine these questions during trial.

Such disputed questions cannot be summarily concluded while deciding rejection of plaint.

D. Previous decree — Not automatically res judicata against subsequent purchaser.

Paras 4–6

A subsequent purchaser, who was not a party to the previous proceedings, is entitled to contend that—

previous decree is collusive;
decree is fraudulent;
decree is void;
decree is not binding upon him.

Whether such contention succeeds is a matter of evidence and trial.

E. Order VII Rule 11 — Court cannot adjudicate disputed facts.

Paras 10–12

While deciding rejection of plaint, the Court cannot decide—

genuineness of fraud;
bona fide purchase;
validity of earlier decree;
territorial jurisdiction of earlier Court;
applicability of Section 52 Transfer of Property Act.

These are matters for trial.

FACTS OF THE CASE

Paras 3–7

Plaintiff purchased the suit property in 1998.
Vendor had earlier purchased the property in 1991.
Defendant had already obtained an ex parte partition decree in 1997.
Plaintiff claimed he had no notice of the earlier litigation.
Plaintiff alleged fraud, collusion and lack of territorial jurisdiction in obtaining the earlier decree.
Plaintiff instituted a suit for declaration that the earlier decree was not binding.
Defendant sought rejection of plaint under Order VII Rule 11 CPC on the ground of res judicata.
Trial Court allowed the application.
High Court affirmed.
Plaintiff appealed before the Supreme Court.

QUESTIONS OF LAW

Paras 3 & 8

Whether a plaint can be rejected under Order VII Rule 11 CPC merely because the defendant pleads that the suit is barred by res judicata?

SUPREME COURT'S ANALYSIS

I. Scope of Order VII Rule 11

Paras 8–10

The Court reiterated that only the plaint can be looked into.

No defence can be considered.

No evidence can be appreciated.

No previous records can be examined.

II. Nature of Res Judicata

Paras 8–10

Res judicata is not merely a legal plea.

It requires examination of

previous pleadings,
issues,
findings,
identity of parties,
identity of title.

Hence it ordinarily becomes a mixed question of law and fact.

III. Allegations of Fraud

Paras 6–12

The plaintiff specifically pleaded—

collusion,
fraud,
want of jurisdiction,
suppression,
decree not binding.

These allegations require evidence.

Therefore rejection of plaint was legally unsustainable.

IV. Error of Trial Court

Paras 10–11

The Trial Court virtually decided the merits of the fraud allegation without recording evidence.

Such an exercise falls outside the jurisdiction under Order VII Rule 11 CPC.

V. High Court's Error

Paras 11–12

The High Court failed to notice that the Trial Court had entered into disputed factual questions.

It wrongly affirmed rejection of plaint.

RATIO DECIDENDI

Paras 8–12

A plaint cannot be rejected under Order VII Rule 11(d) CPC on the ground of res judicata where adjudication of such plea requires examination of disputed facts, previous pleadings, earlier judgment, allegations of fraud, collusion, or other evidence beyond the plaint.

PRINCIPLES LAID DOWN

Order VII Rule 11 is confined to the plaint alone.
Defendant's defence cannot be looked into.
Res judicata generally requires trial.
Fraud and collusion cannot be decided summarily.
Previous ex parte decree does not automatically bar a subsequent suit.
Mixed questions of law and fact cannot be determined under Order VII Rule 11.

CASES RELIED UPON

Paras 8–10

Srihari Hanumandas Totala v. Hemant Vithal Kamat, (2021) 9 SCC 99.
- Res judicata generally lies beyond the scope of Order VII Rule 11.
V. Rajeshwari v. T.C. Saravanabava, (2004) 1 SCC 551.
- Similarity of causes of action requires trial and examination of previous records.
Keshav Sood v. Kirti Pradeep Sood, Civil Appeal No. 5841 of 2023.
- Defence and previous judgments cannot be considered under Order VII Rule 11.

FINAL DECISION

Paras 13–15

Appeal Allowed.
Orders of Trial Court and High Court Set Aside.
Suit Restored to file.
Expeditious disposal directed.
Supreme Court expressly kept all issues including res judicata open for final adjudication after trial, without expressing any opinion on the merits.

Sunday, July 19, 2026

Once a Resolution Plan is approved under Section 31 of the Insolvency and Bankruptcy Code, all claims stand frozen in the manner provided therein and every claim not incorporated in the Plan stands extinguished. Operational creditors whose disputed claims had not crystallised into quantified liabilities by the effective date of the Resolution Plan cannot continue civil suits or arbitration proceedings for recovery of such pre-CIRP dues. The approved Resolution Plan must be read as a whole, giving full effect to the "clean slate" doctrine, thereby enabling the Successful Resolution Applicant to take over the Corporate Debtor free from past liabilities not preserved by the Plan.

advocatemmmohan

2026 INSC 717

M/s Tata Steel Ltd. v. Varsha & Anr.

HEAD NOTES

A. Insolvency and Bankruptcy Code, 2016 — Sections 30 & 31 — Approved Resolution Plan — Binding effect.

Held, once a Resolution Plan is approved under Section 31, it is final and binding upon the Corporate Debtor, Successful Resolution Applicant, creditors and all stakeholders. Claims not provided for in the Resolution Plan stand extinguished and cannot thereafter be enforced through civil suits, arbitration or other proceedings.

B. Operational Creditors — Pending Civil Suits and Arbitration — Effect of approval of Resolution Plan.

Held, civil suits and arbitral proceedings relating to pre-CIRP operational debts, which had not crystallised into quantified claims by the effective date of the Resolution Plan, automatically stand withdrawn, abated, extinguished or waived in accordance with the approved Resolution Plan.

C. Insolvency Resolution — "Clean Slate" Doctrine.

Held, the Successful Resolution Applicant must commence business on a "clean slate". Permitting unresolved or contingent claims to survive after approval of the Resolution Plan would defeat the very object of the Insolvency and Bankruptcy Code and create commercial uncertainty.

D. Operational Creditors — Notional admission of claim at ₹1 — Effect.

Held, where disputed operational claims were finally verified and admitted only at a quantified value of ₹1 in the Final List of Creditors, the creditors cannot subsequently pursue the original disputed amounts through independent proceedings after approval of the Resolution Plan.

E. Resolution Professional — Final List of Creditors — Finality.

Held, once the Final List of Creditors attains finality and remains unchallenged, the treatment of claims under the approved Resolution Plan becomes binding. Operational creditors cannot subsequently reopen the categorisation or valuation of their claims indirectly through civil or arbitral proceedings.

F. Commercial Wisdom of Committee of Creditors.

Held, allocation and treatment of operational creditors under a Resolution Plan form part of the commercial wisdom of the Committee of Creditors, which is ordinarily non-justiciable except on the limited grounds recognised under the Insolvency and Bankruptcy Code.

G. Resolution Plan — Interpretation.

Held, a Resolution Plan must be read as an integrated commercial document. Individual clauses cannot be interpreted in isolation to preserve claims expressly extinguished elsewhere in the Plan. Harmonious construction must prevail.

H. MSMEs and Small Operational Creditors — Legislative Concern.

Held, although the existing statutory framework places operational creditors, including MSMEs and local bodies, at a significant disadvantage in insolvency distribution, any modification of the repayment mechanism lies within the legislative domain. The Court recommended consideration of the issue by the Law Commission and Legislature.

Analysis of Facts

Bhushan Steel Limited entered Corporate Insolvency Resolution Process (CIRP).

Prior to commencement of CIRP, one operational creditor had instituted a civil recovery suit, while another had initiated multiple arbitration proceedings against the Corporate Debtor.

Both creditors submitted their claims before the Resolution Professional during CIRP. Since their claims were under adjudication elsewhere, they were admitted in the Final List of Creditors at a quantified value of ₹1 each.

The Committee of Creditors approved Tata Steel's Resolution Plan, which was subsequently sanctioned by the NCLT.

Despite approval of the Resolution Plan, the operational creditors continued their civil suit and arbitration proceedings. The High Courts permitted continuation of those proceedings.

The Successful Resolution Applicant challenged those orders before the Supreme Court.

The Supreme Court held that the approved Resolution Plan extinguished all unresolved pre-CIRP claims except to the extent expressly recognised therein. Since the operational creditors' claims stood finally quantified at ₹1 each and the Resolution Plan had attained finality, continuation of the pending civil and arbitral proceedings was impermissible. The appeals were accordingly allowed and the proceedings dismissed.

Analysis of Law

The Supreme Court laid down the following principles:

Approval of a Resolution Plan under Section 31 freezes all claims against the Corporate Debtor.
Claims not incorporated in the Resolution Plan stand extinguished.
The "clean slate" principle protects the Successful Resolution Applicant from unforeseen liabilities after takeover.
Operational creditors whose disputed claims are finally admitted only at a quantified value of ₹1 cannot subsequently enforce larger disputed claims.
The Final List of Creditors, if unchallenged, attains finality and binds all stakeholders.
The commercial wisdom of the Committee of Creditors regarding treatment of operational creditors is ordinarily immune from judicial interference.
A Resolution Plan must be interpreted harmoniously as one integrated commercial document.
Civil suits and arbitration proceedings relating to pre-resolution operational claims which remain uncrystallised at the effective date stand withdrawn, abated or extinguished in accordance with the approved Resolution Plan.
While recognising hardships faced by MSMEs and small operational creditors under the present insolvency regime, any alteration of the statutory repayment framework is a matter for legislative intervention rather than judicial modification.

Ratio Decidendi

Once a Resolution Plan is approved under Section 31 of the Insolvency and Bankruptcy Code, all claims stand frozen in the manner provided therein and every claim not incorporated in the Plan stands extinguished. Operational creditors whose disputed claims had not crystallised into quantified liabilities by the effective date of the Resolution Plan cannot continue civil suits or arbitration proceedings for recovery of such pre-CIRP dues. The approved Resolution Plan must be read as a whole, giving full effect to the "clean slate" doctrine, thereby enabling the Successful Resolution Applicant to take over the Corporate Debtor free from past liabilities not preserved by the Plan.