Dentons Link Legal successfully obtained interim relief for its client, DBM Geotechnics and Constructions Private Limited, in a Writ Petition before the Hon'ble Bombay High Court challenging an ex-parte order of the Labour Court that sought to impose liability for pre-CIRP dues post the approval and implementation of a resolution plan.
It was contended on behalf of the client that it had undergone Corporate Insolvency Resolution Process (CIRP) since 30th August 2019 under the Insolvency and Bankruptcy Code, 2016 (IBC), during which a moratorium was in effect barring further legal proceedings. A resolution plan was approved on 25th January 2023, and implemented, with the Petitioner now under a new management who were protected under Section 32A of the IBC.
It was further argued that under Section 32A of the IBC, the company is not liable for prior debts once the resolution plan is approved, especially since the Respondent’s claim pertained to a period from June 2015 to March 2016 who did not file any claim during the CIRP.
The landmark judgments of the Hon'ble Supreme Court in Ruchi Soya Industries Ltd. v. Union of India, (2022) 6 SCC 343 and Ghanashyam Mishra & Sons (P) Ltd. v. Edelweiss Asset Reconstruction Co. Ltd., (2021) 9 SCC 657 were relied upon to argue the “clean slate” principle and to state that any dues not considered in the Resolution Plan stood extinguished and could not be subsequently enforced under new management.
On these submissions made, the Hon'ble Court stayed the operation of the Impugned Order dated 11th December 2024 and all subsequent correspondences/developments in pursuance thereof.
The team was led by Petrushka Deas Dasgupta (Partner), Krishna Baruah (Principal Associate), and Devdatta Uchil, (Associate).