Supreme Court: Pre-existing claims extinguished once Resolution Plan is approved under IBC Section 31, ensuring stability.

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Full Text of the Document

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....Fresh claim after approval of Resolution Plan - Consequence of Award in the arbitration proceedings - The view of the Supreme Court as crystallized in Essar is that pre-existing and undecided claims which have not featured in the collation of claims and consequent consideration by the Resolution Professional shall be treated as extinguished upon approval of the Resolution Plan under Section 31 of the IBC. This can be seen as a necessary and an inevitable fallout of the IBC in order to prevent, in the words of the Supreme Court, a “hydra head popping up” and rendering uncertain the running of the business of a corporate debtor by a successful resolution applicant - HC....