IBC UPDATE | CLEAN SLATE DOCTRINE REAFFIRMED
Ujaas Energy Ltd. v. WBPDCL (Supreme Court)
🔍 Key Takeaways:
✅ Once a Resolution Plan is approved (Section 31, IBC) →
👉 All claims not included = EXTINGUISHED FOREVER
🚫 No Counterclaims Allowed Post-Approval
Tribunals cannot entertain fresh or surviving counterclaims after approval of the plan.
⚖️ Set-Off: Limited but Permitted
✔ Can be raised as a defense in arbitration
❌ Cannot be used for:
- Independent recovery
- Claiming surplus amounts
📌 “Clean Slate” Doctrine Strengthened
The successful resolution applicant gets the company free from past liabilities, ensuring certainty and revival.
💡 Practical Impact:
- Creditors must file claims timely during CIRP
- Post-plan litigation scope is strictly limited
- Arbitration rights survive only as a shield, not a sword
Shri Ganpati Jurists
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