Excerpts of the order;
1. The petitioner has filed the present petition impugning an order dated 16.08.2019 in CC No. 770/2019 captioned ‘Serious Fraud Investigation Office v. Bhushan Steel Limited’, whereby the Trial Court had taken cognizance of the offences punishable under the Companies Act, 2013; offences punishable under the Companies Act, 1956 and; certain offences under the Indian Penal Code, 1860. The petitioner also impugns the summons dated 21.08.2019, issued by the learned ASJ to the petitioner. The petitioner also prays that the complaint bearing CC No. 770/2019 filed by the Serious Fraud Investigation Office, be quashed.
2. It is stated in terms of the Insolvency and Bankruptcy Code, 2016 (hereafter the ‘IBC’), a financial creditor of the petitioner (then known as ‘Bhushan Steel Limited’) had initiated the Corporate Insolvency Resolution Process (CIRP) by filing a petition before the National Company Law Tribunal (NCLT). The said petition was admitted on 26.07.2017. Thereafter, Tata Steel Limited had submitted a Resolution Plan with respect to the petitioner (then known as ‘Bhushan Steel Limited’), which was approved by the Committee of Creditors on 20.03.2018 and by Adjudicating Authority (NCLT) on 15.05.2018. The said order dated 15.05.2018 was impugned before the National Company Law Appellate Tribunal (NCLAT) in Company Appeal (AT) (Insolvency) No. 221/2018 and connected matters. The same was dismissed by NCLAT on 10.08.2018. Thereafter, 72.65% of the petitioner’s equity capital was acquired by Tata Steel Limited.
3. In terms of the Resolution Plan, the management of the petitioner company has been taken over by new promoters, who are not connected with the previous management.
4. The learned counsel appearing for the petitioner submits that in terms of Section 32A of the IBC, as inserted by virtue of theInsolvency of Bankruptcy Code (Amendment) Act, 2020; the petitioner is required to be discharged from the aforesaid proceedings.
6. It is clear from the express language of the aforementioned provision that a Corporate Debtor would not be liable for any offence committed prior to commencement of the CIRP and the corporate debtor would not be prosecuted if a resolution plan has been approved by the Adjudicating Authority.
7. In the present case, there is no dispute that a resolution plan has been approved by the Adjudicating Authority (NCLT) and in the circumstances, there is much merit in the contention that the petitioner cannot be prosecuted and is liable to be discharged.
8. The petition is, accordingly, allowed and the impugned order dated 16.08.2019 and the impugned summons dated 21.08.2019, are set aside. The impugned complaint (CC No. 770/2019) against the petitioner, is also set aside.
9. It is clarified that this order will not affect the prosecution of the erstwhile promoters or any of the officers who may be directly responsible for committing the offences in relation to the affairs of the petitioner company.
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