NTPC Ltd. Vs Directorate of Enforcement (Delhi High Court)
Delhi High Court clarified that NTPC, as a successful Resolution Applicant of Jhabua Power Ltd., enjoys immunity under Section 32A IBC. Criminal proceedings against the corporate debtor cannot be extended to the new management, reinforcing finality in insolvency resolutions.
The Delhi High Court, in the case of NTPC Ltd. Vs Directorate of Enforcement, addressed the application of the ‘Clean Slate’ doctrine under Section 32A of the Insolvency and Bankruptcy Code (IBC) to shield a successful Resolution Applicant (RA) from criminal proceedings initiated against the Corporate Debtor (CD). The court declined to quash the proceedings outright but directed the National Thermal Power Corporation (NTPC) to present the details of the approved resolution plan and the statutory immunity to the Trial Court for a reasoned order.
The Core Dispute: Past Liabilities vs. Clean Slate
The dispute arose after Jhabua Power Ltd. (JPL), the Corporate Debtor, underwent a Corporate Insolvency Resolution Process (CIRP). NTPC Ltd., a Maharatna Public Sector Undertaking, was the successful Resolution Applicant, with its plan approved by the Committee of Creditors (CoC) with a vote and subsequently by the National Company Law Tribunal (NCLT), Kolkata Bench, on July 6, 2022. The NCLT’s approval order explicitly granted immunity from prior offences under Section 32A of the IBC.
