Corporate Debtor Not Liable for Pre-CIRP Offences Post Approval of Resolution Plan: Delhi High Court

The Delhi High Court ruled that a Corporate Debtor cannot be prosecuted for offences committed prior to the commencement of the CIRP  if a resolution plan is approved under Section 31 of the IBC.  

The case involved Bhushan Power and Steel Ltd. (BPSL), where JSW Steel took over through CIRP. Still, enforcement agencies pursued legal action for past financial misconduct, whose assets were attached by the Enforcement Directorate under PMLA.

The court emphasized that while the company's liability ceases, its past role remains relevant in the trial of former executives.

The ruling is subject to pending Supreme Court proceedings.