Sub-judice claims not crystallized before resolution plan approval stand extinguished under the clean slate doctrine.

During the pendency of a recovery suit filed by Respondent No. 1 (Varsha) and arbitral proceedings initiated by Intervenor-Masyc against the Corporate Debtor, the Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor.

The Resolution Plan submitted by the Appellant (Tata Steel Ltd.) was subsequently approved by the Adjudicating Authority (NCLT).

1. Whether claims that were sub-judice at the time of approval of a Resolution Plan, but not formally submitted or crystallized during the CIRP, can be pursued against the successful resolution applicant.

2. Whether the 'clean slate doctrine' under the Insolvency and Bankruptcy Code (IBC) extinguishes all past liabilities not included in the approved Resolution Plan.

Section 31 of the Insolvency and Bankruptcy Code, 2016, provides that once a resolution plan is approved, it is binding on the corporate debtor, its employees, members, creditors, and other stakeholders.

The "Clean Slate Doctrine" as established in Committee of Creditors of Essar Steel India Limited v. Satish Kumar Gupta ensures that the successful resolution applicant starts on a fresh slate without being burdened by "undecided" claims.

The court reasoned that the legislative intent of the IBC is to ensure the resuscitation of the Corporate Debtor. Allowing sub-judice claims to survive the approval of a Resolution Plan would result in 'hydra-headed' monsters popping up, jeopardizing the commercial calculations of the Resolution Applicant.

The court interpreted that all claims which were not part of the approved Resolution Plan stand extinguished, as a Successful Resolution Applicant cannot be faced with surprise claims relating to the period prior to the commencement of the CIRP.

The appeals were allowed, and the sub-judice claims initiated by the Respondents were held to be no longer maintainable against the Appellant under the clean slate doctrine.