TaxTMI 
TaxTMI 
2026 (6) TMI 531
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....tioner Company, Pushp Ratna Realty Pvt. Ltd. (Corporate Debtor in its new avatar), through its Successful Resolution Applicant. The petition is filed to seek prohibitions, directions, and protections in favour of the petitioner against multiple maliciously initiated proceedings post the approval of the Resolution Plan. 3. The core relief sought by the petitioner is the quashing and setting-aside of various pending cases, suits, and complaints initiated by erstwhile stakeholders, shareholders, and their relatives. The petitioner contends that these proceedings are in the teeth of the statutory embargo under Section 32A, Section 31, Section 231, and Section 238 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "IBC, 2016"), and seeks protection pursuant to the order dated 09.03.2026 passed by the National Company Law Tribunal (NCLT), Indore. Facts of the Case 4. The real estate project named "Lush by Pushparatna" was commenced by the erstwhile management of the Petitioner Company in the year 2009-10. All requisite permissions, approvals, and conveyances were executed during that period. Since 2010, allotment letters were issued to numerous homebuyers. S....
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....ner contends that the impugned actions of the respondents in continuing or initiating multiple proceedings are ex facie illegal, arbitrary, and violative of Article 14 of the Constitution of India. It is urged that upon the approval of the Resolution Plan under Section 31 of the IBC, 2016, the plan becomes binding on all stakeholders, and the liability of the Corporate Debtor for any acts committed prior to the commencement of the CIRP entirely ceases. 10. The petitioner specifically relies upon Section 32-A of the IBC, 2016, which grants complete immunity to the Corporate Debtor and its new management from prosecution for prior offences once the management changes pursuant to an approved resolution plan. It is further argued that by virtue of Section 238 of the IBC, 2016, the provisions of the Code have an overriding effect over all other laws, rendering any collateral civil or revenue proceedings non-maintainable. 11. The petitioner submits that all claims, disputes, and liabilities arising prior to the approval of the Resolution Plan stand extinguished. The continuation of these proceedings amounts to an impermissible collateral attack on the approved Resolution Plan, inte....
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....or in the management or control of the corporate debtor or a related party of such a person; or (b) a person with regard to whom the relevant investigating authority has, on the basis of material in its possession, reason to believe that he had abetted or conspired for the commission of the offence, and has submitted or filed a report or a complaint to the relevant statutory authority or Court: Provided that if a prosecution had been instituted during the corporate insolvency resolution process against such corporate debtor, it shall stand discharged from the date of approval of the resolution plan subject to requirements of this sub-section having been fulfilled: Provided further that every person who was a "designated partner" as defined in clause (j) of Section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), or an "officer who is in default", as defined in clause (60) of Section 2 of the Companies Act, 2013 (18 of 2013), or was in any manner incharge of, or responsible to the corporate debtor for the conduct of its business or associated with the corporate debtor in any manner and who was directly or indirectly involved in the commission ....
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.... the corporate insolvency resolution process." 15. Furthermore, the legislative scheme vests the IBC with an overriding effect over all other statutes. Section 238 of the IBC, 2016 is reproduced below :- "238. Provisions of this Code to override other laws.- The provisions of this Code shall have effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any such law." 16. A conjoint reading of Sections 31, 32A, and 238 makes it unequivocally clear that once a Resolution Plan is approved by the NCLT, the Corporate Debtor undergoes a "clean slate" transition. The intent of the legislature is to ensure that a Successful Resolution Applicant is not saddled with surprise claims, prior liabilities, or legacy litigations that could frustrate the very objective of reviving the Corporate Debtor. The continuation of pre-resolution claims in collateral forums directly militates against this statutory protection. 17. This Court finds substantial merit in the reliance placed by the petitioner on the authoritative pronouncements of the Hon'ble Supreme Court in Ghanshya....
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....same reason, the impugned NCLAT judgment in Standard Chartered Bank v. Satish Kumar Gupta [Standard Chartered Bank v. Satish Kumar Gupta, 2019 SCC OnLine NCLAT 388] in holding that claims that may exist apart from those decided on merits by the resolution professional and by the adjudicating authority/Appellate Tribunal can now be decided by an appropriate forum in terms of Section 60(6) of the Code, also militates against the rationale of Section 31 of the Code. A successful resolution applicant cannot suddenly be faced with "undecided" claims after the resolution plan submitted by him has been accepted as this would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective resolution applicant who would successfully take over the business of the corporate debtor. All claims must be submitted to and decided by the resolution professional so that a prospective resolution applicant knows exactly what has to be paid in order that it may then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, NCLAT judgment [Stan....
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....Section 31 could be continued. (emphasis supplied) 29. It is thus clear that this Court in unequivocal terms held that all such claims which are not a part of the resolution plan, shall stand extinguished and no person will be entitled to initiate or continue any proceedings in respect to a claim, which is not part of the resolution plan. The Court further held that the 2019 Amendment to Section 31 of the Code is clarificatory and declaratory in nature and therefore will be effective from the date on which the Code has come into effect. The Court clearly held that all the dues including the statutory dues owed to the Central Government, or any State Government or any local authority, if not part of the resolution plan, shall stand extinguished and no proceedings in respect of such dues for the period prior to the date on which the adjudicating authority grants its approval under Section 31 could be continued. 30. Insofar as the present petitioner is concerned, the Court considered its case in paras 133 to 140. It will be relevant to refer to para 140, which reads as under: (Ghanashyam Mishra case [Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Recon....
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.... then take over and run the business of the corporate debtor. This the successful resolution applicant does on a fresh slate, as has been pointed out by us hereinabove. For these reasons, NCLAT judgment [Standard Chartered Bank v. Satish Kumar Gupta, (2020) 219 Comp Cas 15 : 2019 SCC OnLine NCLAT 388] must also be set aside on this count." (emphasis supplied) 21. It can thus be seen that in view of clear pronouncement of law by this Court, all the dues of any of the stakeholders including the statutory dues owed to the Central Government, any State Government or any local authority, which were not part of the resolution plan, stood extinguished from the date on which the resolution plan stood approved. 22. In view of the clear legal position established by the Hon'ble Apex Court, the following is observed :- (i) The Corporate Debtor in its new Avatar with new management/control enjoys the protection available under Section 31 (more particularly sub-section 5 and 6), 231 and 238 IBC, 2016. (ii) Order dated 09/03/2026 passed by NCLT of approval of resolution plan no proceeding is maintainable for ascertaining prior plans over the assets of the Corpora....