Delhi High Court Rules Govt Cannot Seek Dues Post-Insolvency
· Business · LiveMint, Hindustan Times
The Delhi High Court has ruled that government agencies cannot recover old dues from a company once its insolvency resolution plan is approved. The judgment, delivered in a case involving Jaiprakash Associates, reinforces the 'clean slate' principle of the Insolvency and Bankruptcy Code (IBC). The court quashed a customs department demand for ₹5.89 lakh, noting that the agency failed to file its claim during the corporate insolvency resolution process. The ruling clarifies that creditors, including statutory authorities, are responsible for identifying and submitting their claims within the specified timeframe. The court emphasized that allowing such late claims would undermine the IBC and unfairly burden the new owners of a resolved company.
Why it matters
This ruling provides legal certainty for successful bidders in insolvency cases by protecting them from unexpected liabilities. It impacts how government departments manage their claims and ensures the finality of the insolvency process for companies like Jaiprakash Associates.
Read the original report — LiveMint
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