Resolution Plan Approved Under Section 31(1) IBC Extinguishes All Pre-approval Claims and Contractual Dues.

The Petitioner was sanctioned projects by Respondent No. 2 through Respondent No. 1 in 2010, with funds released in 2015

In 2019, Corporate Insolvency Resolution Process (CIRP) was initiated against the Petitioner before the NCLT. A resolution plan was approved by the Committee of Creditors on 16.10.2020 and subsequently by the NCLT on 08.02.2021 under Section 31(1) of the Insolvency and Bankruptcy Code (IBC)

In August 2023, the Respondents initiated recovery proceedings for Rs. 2,46,78,328/- regarding dues from the pre-resolution plan period

The Respondents argued that the "clean-slate doctrine" did not apply because the successful resolution applicant was an existing promoter, and the Petitioner had suppressed the CIRP proceedings from them

1. Whether Respondents can initiate or continue recovery of a claim arising prior to the approval of a resolution plan under the IBC

2. Whether the "clean-slate doctrine" applies when the successful resolution applicant is an existing promoter/director of the Corporate Debtor rather than a third party

3. Whether the lack of direct notice to creditors regarding CIRP proceedings (beyond public announcement) justifies the revival of pre-resolution claims

Section 31(1) of the IBC, which mandates that an approved resolution plan is binding on all stakeholders

Ghanashyam Mishra and Sons Pvt. Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., establishing that all claims not included in the resolution plan stand extinguished on the date of approval

MBL Infrastructure Ltd. v. Pradeep Colonisers and Suppliers Pvt. Ltd., which holds that the doctrine attaches to the juristic entity of the corporate debtor regardless of the identity of the resolution applicant

RPS Infrastructure Ltd. v. Mukul Kumar regarding Section 15 of the IBC, confirming that public announcements constitute deemed knowledge for commercial entities

The court rejected the Respondents' attempt to distinguish Ghanashyam Mishra on facts, noting that Section 31(1) of the IBC does not differentiate between statutory and contractual dues; both are extinguished if not part of the plan

Regarding the Respondents' challenge to the Petitioner's bona fides due to the successful applicant being a promoter, the court observed that the IBC focuses on the continuity of the corporate personality and institutional integrity, not the identity of the management

The court emphasized that the "clean-slate doctrine" is a statutory mandate under Section 31, not merely a rule of commercial fairness for third parties

Furthermore, the court dismissed the argument regarding the lack of direct communication, ruling that under Section 15 of the IBC, the statutory public announcement through newspapers constitutes "deemed knowledge," and a commercial entity cannot plead ignorance of CIRP proceedings to revive extinguished claims

The court allowed the petition and set aside the recovery communications dated 03.08.2023 and 04.08.2023

The court concluded that respondents cannot resurrect claims through collateral proceedings for a period prior to the approval of the resolution plan