Topic
The SC ruled that an operational creditor whose claim is extinguished under IBC resolution plan may assert a set-off defence in arbitration initiated by resolution applicant, with no affirmative recovery. This limits clean-slate for OCs after CIRP.
The Bombay High Court has ruled that Section 32A of the IBC wipes out pre-CIRP attachments made under the MPID Act when a corporate debtor was never named as an accused, affirming the clean slate principle even for properties attached before insolvency. This shields resolution applicants from legacy liabilities, reinforcing the IBC’s intent to restore operational viability without collateral legal entanglements.
The Allahabad High Court has ruled that under Section 31 of the IBC, statutory electricity dues arising before the Corporate Insolvency Resolution Process are extinguished as of the Effective Date specified in the approved resolution plan - not the date of NCLT approval. This clarifies that resolution applicants inherit liability only prospectively, reinforcing the clean slate principle and shielding them from legacy dues improperly revived post-resolution.