High Court of Delhi

Angul Energy Limited Vs. Union of India and Ors.

MANU/DE/0815/2020

13.03.2020

Insolvency

A Corporate Debtor would not be liable for any offence committed prior to commencement of CIRP and would not be prosecuted, if a resolution plan has been approved by Adjudicating Authority

The Petitioner has filed the present petition impugning an order, whereby the Trial Court had taken cognizance of the offences punishable under the Companies Act, 2013; offences punishable under the Companies Act, 1956 and certain offences under the Indian Penal Code, 1860. The Petitioner also impugns the summons issued by the learned ASJ to the Petitioner. The Petitioner also prays that the compliant filed by the Serious Fraud Investigation Office, be quashed.

It is stated in terms of the Insolvency and Bankruptcy Code, 2016 ('IBC'), a financial creditor of the Petitioner (then known as 'Bhushan Energy Limited') had initiated the Corporate Insolvency Resolution Process (CIRP) by filing a petition before the National Company Law Tribunal (NCLT). The said petition was admitted. Thereafter, Tata Steel Limited had submitted a Resolution Plan with respect to the Petitioner (then known as 'Bhushan Energy Limited'), which was approved by the Committee of Creditors and the NCLT. Pursuant to the same, 99.9% of the Petitioner's equity capital was acquired by Tata Steel BSL Limited.

In terms of the Resolution Plan, the management of the Petitioner Company has been taken over by new promoters, who are not connected with the previous management. The learned counsel appearing for the Petitioner submits that, in terms of Section 32A of the IBC, as inserted by Section 10 of the Insolvency of Bankruptcy Code (Amendment) Ordinance, 2019; the Petitioner is required to be discharged from the aforesaid proceedings.

It is clear from the express language of the Section 32A (1) of the IBC that, a Corporate Debtor would not be liable for any offence committed prior to commencement of the CIRP and the corporate debtor would not be prosecuted, if a resolution plan has been approved by the Adjudicating Authority.

In the present case, there is no dispute that a resolution plan has been approved by the Adjudicating Authority (NCLT) and in the circumstances, there is much merit in the contention that, the Petitioner cannot be prosecuted and is liable to be discharged.

The petition is, accordingly, allowed and the impugned order and the impugned summons are set aside. The impugned compliant against the Petitioner, is also set aside. It is clarified that this order will not affect the prosecution of the erstwhile promoters or any of the officers who may be directly responsible for committing the offences in relation to the affairs of the Petitioner Company.

Tags : Complaint Cognizance Quashing of

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