The 'Clean Slate' theory established by the Supreme Court in insolvency cases extinguishes all claims not included in the Resolution Plan, impacting the rights of creditors and other parties involved.

JUDGMENT

Sabyasachi Bhattacharyya, J. - In the present writ petition, the petitioners have prayed primarily for restoration of their electricity connection, which was disconnected by the respondent-distribution licensee on November 29, 2014 because of non-payment of electricity dues by the petitioner.

2. The learned Senior advocate appearing for the petitioners contends that the documents filed by the West Bengal State Electricity Distribution Company Limited (in short, WBSEDCL) have no relevance in the matter.

3. The learned Senior advocate for the petitioners argues that in respect of the petitioner no.1-Company, a Corporate Insolvency Resolution Process (CIRP) was initiated vide Order dated October 28, 2019 under the Insolvency and Bankruptcy Code, 2016 (for the sake of brevity, 'the IBC'), on an application filed under Section 7 of the IBC by the Stressed assets Stabilisation Fund. Pursuant to the order of the National Company Law Tribunal (NCLT), amravati Bench, the Resolution Professional appointed by the adjudicating authority called for claims from creditors vide Public announcement dated October 31, 2019, which was widely circulated. Subsequently, the Resolution Plan was passed by the NCLT, amravati bench vide order dated November 10, 2021. It is argued that by operation of Section 31(1) of the IBC, the petitioner no.1 has no dues whatsoever upon the approval of the said Resolution Plan.

4. The learned Senior advocate submits that claims which were not filed before the approval of the Resolution Plan and were not a part of the said Plan, stand extinguished. The learned Senior advocate places reliance on the provisions of Section 31(1) and Section 238 of the IBC on such score and cites Ghanashyam Mishra and Sons Private Limited Vs. Edelweiss asset Reconstruction Company Limited, reported at (2021) 9 SCC 657, where the Supreme Court held that claims which were not filed before the approval of the Resolution Plan by the NCLT and which are not a part of the Resolution Plan, stand extinguished.

5. The petitioner also places reliance on the judgment dated February 25, 2021 passed by the National Company Law appellate Tribunal (NCLaT), Delhi, in M/s. Shiv Sakti Inter Globe Exports Pvt. Ltd. Vs. M/s. KTC Foods Private Limited in Company appeal (aT) (Insolvency) No.650 of 2020, wherein it was held that subsequent to the sale of the Corporate Debtor Company as a 'going concern', claims of the distribution licensee, that is, the Uttar Haryana Bijli Vitran Nigam could not be foisted upon the appellant therein. The scope and objective of the IBC is to extinguish all claims, specifically the ones which were not even made during the CIRP or in the liquidation stage, to aid the purchaser of the company as a 'going concern' to start on a 'clean slate'.

6. The principle enunciated in Ghanashyam Mishra (supra) was reiterated by the Supreme Court in the judgment dated February 17, 2022 in M/s. Ruchi Soya Industries Ltd. Vs. Union of India & ors., rendered in Civil appeal Nos. 447 - 448 of 2013.

7. It is argued by the learned Senior advocate for the petitioner that the New Management/Resolution applicant cannot be faced with new claims. In support of the said proposition, learned counsel places reliance on Committee of Creditors of Essar Steel India Limited Vs. Satish Kumar Gupta and others, reported at (2020) 8 SCC 531, wherein it was held that a successful Resolution applicant cannot certainly be faced with 'undecided' claims after the Resolution Plan submitted by him has been accepted. The Supreme Court held that acceptance of such undecided claims would amount to a hydra head popping up which would throw into uncertainty amounts payable by a prospective Resolution applicant, who successfully takes over the business of the Corporate Debtor. all claims must be submitted to and decided by the Resolution Professional so that a prospective Resolution applicant knows exactly what has to be paid in order that it may then take over and run the busin