Section 32A immunity after resolution plan approval applies on genuine change in control, and pending appeals do not suspend it.

Section 32A of the Insolvency and Bankruptcy Code is discussed as conferring immunity on a corporate debtor once a resolution plan is approved under Section 31 and implementation brings a genuine change in management and control. The text states that, where the corporate debtor is no longer under the control of the erstwhile management, the provision gives the successful resolution applicant a clean break from prior liabilities, including prosecution for antecedent offences. It also notes that pending appeals against plan approval do not make a Section 32A application premature if no interim stay has been granted, because the approved plan continues to operate until stayed.

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Issues: (i) Whether the corporate debtor was entitled to immunity under Section 32A of the Insolvency and Bankruptcy Code, 2016 after approval of the resolution plan and consequent change in management and control. (ii) Whether pendency of appeals against the resolution plan approval order rendered the application under Section 32A premature.

Issue (i): Whether the corporate debtor was entitled to immunity under Section 32A of the Insolvency and Bankruptcy Code, 2016 after approval of the resolution plan and consequent change in management and control.

Analysis: The resolution plan had been approved under Section 31 of the Insolvency and Bankruptcy Code, 2016 and subsequent events showed that management and control had changed pursuant to implementation of the plan. The conditions for immunity under Section 32A, namely approval of the resolution plan and a qualifying change in management, were treated as satisfied. The corporate debtor was also no longer under the control of the erstwhile directors. The provision was applied to give the successful resolution applicant a clean break from past liabilities.

Conclusion: The corporate debtor was entitled to immunity under Section 32A and could not be denied discharge from prosecution.

Issue (ii): Whether pendency of appeals against the resolution plan approval order rendered the application under Section 32A premature.

Analysis: The mere filing of an appeal did not suspend the operation of the resolution plan approval order. The appellate forum had declined interim stay, and in the absence of a stay the approved plan continued to operate. On that basis, the application under Section 32A could be entertained and was not rendered premature merely because appeals were pending.

Conclusion: The application under Section 32A was not premature despite pendency of appeals.

Final Conclusion: The impugned order was set aside, the corporate debtor was discharged from the criminal case, and the petitions were allowed with consequential disposal of the connected intervention application.

Ratio Decidendi: Where a resolution plan has been approved under the Insolvency and Bankruptcy Code and has brought about a genuine change in management and control, Section 32A operates to extinguish the corporate debtor's liability for prior offences; pending appeals without a stay do not by themselves prevent the statutory immunity from taking effect.

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