The Madhya Pradesh High Court on 27 May held that once a resolution plan is approved under the Insolvency and Bankruptcy Code, 2016, the corporate debtor in its “new avatar” cannot face pre-resolution claims or proceedings that stand extinguished under the approved plan.
Justice Jai Kumar Pillai reiterated that the insolvency framework ensures a “clean slate” to the successful resolution applicant and allowed the petition filed by Pushp Ratna Realty Pvt Ltd, whose resolution plan the NCLT, Indore had approved. The Bench observed:
“…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…