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ARTICLE · 23 APRIL 2020

Ring-fencing Under IBC, And Open Issues

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Whether by virtue of Section 32A of IBC all the statutory remedy under the criminal statutes will come to a halt by mere approval of resolution plan which is a purely a civil and commercial action.

IndiaInsolvency/Bankruptcy/Re-Structuring
Swet Shikha
Swet Shikha
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An ordinance was promulgated on December 28, 2019 ("Ordinance") making further amendment in the Insolvency and Bankruptcy Code, 2016 ("IBC) and the President of India accorded his assent to the Insolvency and Bankruptcy Code (Amendment) Act, 2020 (Amendment Act) inserting section 32 A which is now the fourth amendment to IBC.

The Amendment Act inter alia introduced Section 32 A to IBC which provides immunity to the corporate debtor and its assets if the resolution plan is approved and it results in change of the management of the corporate debtor from any prosecution, action, attachment, confiscation.

It is imperative to mention that the underlining reason of introduction of Section 32 A to the IBC is in connection to the Corporate Insolvency Resolution Process ("CIRP") of one the giants having its place in the list of dirty dozen announced by Reserve Bank of India, 'Bhushan Power & Steel Limited' ("BPSL").

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