Section 32A insolvency protection extends to attached corporate assets after resolution plan approval and change in control.

Section 32A of the Insolvency and Bankruptcy Code protects the corporate debtor's property from attachment, seizure, retention or confiscation for pre-CIRP offences once a resolution plan is approved under Section 31(1) and control shifts to an eligible new management. The provision is framed to give the successful resolution applicant a clean break from past misconduct, and its Explanation gives "action against the property" wide scope. On that basis, the benefit of Section 32A extended to the successful resolution applicant, and the attached properties ought to have been released; refusal to do so was erroneous.

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Issues: Whether, after approval of the resolution plan, the successful resolution applicant was entitled to the protection of Section 32A of the Insolvency and Bankruptcy Code, 2016 so as to require release of the properties of the corporate debtor attached by the Enforcement Directorate.

Analysis: Section 32A(2) bars action against the property of the corporate debtor in relation to offences committed before commencement of the corporate insolvency resolution process once a resolution plan is approved under Section 31(1) and the approved plan results in a change in control to an eligible person. The Explanation to Section 32A(2) expressly includes attachment, seizure, retention and confiscation within the expression "action against the property of the corporate debtor", giving the provision wide amplitude. The approved plan in the present case had already been sanctioned by the Committee of Creditors and placed before the adjudicating authority, and the legislative scheme recognised that the new management should receive a clean break from past offences. The earlier authorities relied upon did not justify refusing relief once the statutory trigger for Section 32A had been satisfied.

Conclusion: The benefit of Section 32A extended to the successful resolution applicant, and the adjudicating authority was in error in declining to direct release of the attached properties.

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