New Delhi (India): The Supreme Court on Tuesday upheld laws that protect new owners of insolvent companies from the charges filed against the previous management.
“A bankrupt company and its assets cannot face criminal proceedings once it is sold to new owners,” a bench of the apex court, headed by Justice Rohinton Fali Nariman, said, in its verdict.
The top court upheld Section 32A of the Insolvency and Bankruptcy Code (IBC) granting statutory immunity to successful resolution applicants from prosecution.
“Imperative needs to attract resolution applicants who would not shy away from offering reasonable and fair value. Legislature thought it is necessary to provide legal immunity to corporate debtor, provision is well thought out,” the court noted.