Section 32A IBC immunity requires an approved resolution plan and change in management to extinguish criminal liability.

The Appellant (A1), a corporate entity, was convicted of offences under Sections 420 and 120B of the Indian Penal Code (IPC) relating to Coal Block Allocation cases

On 08.07.2025, the Special Judge (CBI) sentenced the Appellant to pay a fine of ₹50,00,000 for each offence

The Appellant moved an application under Section 430 read with Section 528 of the Bhartiya Nagrik Suraksha Sanhita (BNSS), 2023, seeking suspension of the sentence of fine during the pendency of the appeal

The Appellant contended that since it had been under insolvency since 2019 and liquidation since 2020, past criminal liabilities must cease under the Insolvency and Bankruptcy Code, 2016 (IBC)

The Respondent (CBI) opposed the plea, arguing that the chargesheet was filed in 2014 (pre-insolvency) and that no resolution plan had been approved to trigger statutory immunity

1. Whether the liability of a corporate debtor for criminal offences committed prior to the Corporate Insolvency Resolution Process (CIRP) ceases under Section 32A of the IBC in the absence of an approved resolution plan.

2. Whether the moratorium provisions under Section 14 or liquidation proceedings under Section 33(5) of the IBC necessitate the suspension of a criminal sentence of fine.

The Court applied Section 32A of the IBC, which provides that criminal liability of a corporate debtor ceases only from the date a resolution plan is approved, provided there is a change in management to persons unrelated to the original promoters or offenders

It relied on the precedent in Manish Kumar v. Union of India (2021), which established that Section 32A aims to provide a "clean slate" to new management and not to allow wrongdoers to evade liability

The Court further distinguished Section 14 of the IBC, noting that a moratorium is a temporary suspension (a "shadow") of proceedings that does not extinguish civil or criminal liability, unlike the discharge contemplated under Section 32A

The Court observed that the Appellant failed to satisfy the essential conditions of Section 32A of the IBC, primarily because no resolution plan had been approved by the adjudicating authority

The Court reasoned that immunity from prosecution is contingent upon the fulfillment of specific conditions, including a change in control to a party not involved in the original offence

It was noted that the present criminal proceedings were initiated in 2014, significantly prior to the commencement of insolvency

The Court held that Section 32A is intended to protect "new management" to encourage asset acquisition, rather than providing an escape for the original corporate debtor when no takeover has occurred

Consequently, the "shadow" of the moratorium does not equate to the extinguishment of the fine imposed

It held that the Appellant did not meet the necessary criteria for immunity under Section 32A of the IBC and, given the gravity of the offence, the court was not inclined to suspend the sentence of fine

The main appeal was listed for further hearing on 15.10.2026