March 3, 2022
W.P. (CRL) 3037/2019 and CRL M.A. 39126/2019, High Court of Delhi, Decided on 16.03.2020
The petitioner, Tata Steel Limited was the successful resolution applicant of Bhushan Steel Limited (‘BSL’). The order of the National Company Law Tribunal (‘NCLT’) approving the resolution plan of TSL further approved by the National Company Law Appellate Tribunal.
This petition was filed by TSL against the order passed by the trial court in a criminal case filed by the Serious Fraud Investigation Office (‘SFIO’) against the corporate debtor, BSL, in which the trial court had taken cognizance of various offences punishable under the Companies Act 1956/2013, and the Indian Penal Code, and had issued summons to the petitioner.
Section 32A of the Insolvency and Bankruptcy Code 2016 (‘IBC’)
The court, reiterated Section 32A of the IBC that expressly discharges the corporate debtor from all the past offences and prosecutions pursuant thereto, from the date of the approval of the resolution plan. However, this does not apply when the resolution plan results in a change in management/control to a person who is (a) a promoter or in the management or control of the corporate debtor or a related party to such person, and (b) an abettor/conspirator in any offence against which an investigating authority has filed a complaint before any statutory authority/court.
On a plain application of Section 32A, the court held that the resolution plan proposed by the petitioner was successfully approved. Further the petitioner (the successful resolution applicant) did not fall under either of the two exceptions to the Section 32A immunity.
Therefore, it held that the petitioner would get the benefit of Section 32A, and accordingly, quashed the original complaint by the SFIO, as well as the order and summons issued by the trial court against the petitioner.
However, it further clarified that the discharge of the petitioner from the said cases would not affect the prosecution of the erstwhile promoters or any officers who may be directly responsible in the commission of the offences, applying the second proviso to Section 32A.
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