Ascertaining impact of IBC’s section 32A on criminal proceedings – Law.asia

The Insolvency Law Committee (committee), in its third report, recommended that section 32A be inserted into the Insolvency and Bankruptcy Code, 2016 (code). This granted immunity to the corporate debtor and its property from any action under penal laws following a successful corporate insolvency resolution process (CIRP). This section attempts to balance the codes goal of value maximization, last mile repayments and the duty of the state to penalize the commission of offences, especially those involving the public interest. The committee believed that, in the absence of such immunity, potential resolution applicants might price their resolution plans lower or be discouraged from proposing a resolution plan.