The Supreme Court has reiterated that once a resolution plan is approved under Section 31 of the Insolvency and Bankruptcy Code (IBC), it becomes binding on the corporate debtor, creditors and all other stakeholders. Court held that all claims not specifically provided for in the approved plan stand extinguished, and no fresh or pending legal proceedings can thereafter be initiated or continued against the successful resolution applicant.
A Bench of Justices Manoj Misra and Manmohan said the successful resolution applicant is entitled to take over the company on a “clean slate” and cannot be burdened with undecided claims that do not form part of the approved resolution plan.
Can creditors continue lawsuits after approval of an IBC…