The Supreme Court in Adani Power Limited v. Shapoorji Pallonji and Co, on appeal against the previously discussed NCLAT order, seems to have cleared the confusion caused by its observation in Fourth Dimensions. In Adani Power, the Supreme Court has re-affirmed the fresh slate principle as the following:
“In our opinion, there is no ambiguity in the above observations and directions recorded by the NCLAT, as they reflect that the Resolution Plan, as approved, is binding on all and cannot be made subject matter of arbitration or any other proceedings. The claim of respondent no. 1 – Shapoorji Pallonji and Co. Pvt. Ltd. has been categorized by the Resolution Professional as a ‘contingent liability’. Respondent no. 1 – -Shapoorji Pallonji and Co. Pvt. Ltd. may continue with the arbitration proceedings for adjudication of its claim and quantification thereof, if they so wish and choose to do so.
However, the claim even if allowed in favour of M/s. Shapoorji Pallonji and Co. Pvt. Ltd. will have no bearing on the rights and obligations of the appellant – M/s. Adani Power Limited, which are in terms of the Resolution Plan. It has been held by the judgment dated 23.02.2023, that the appellant cannot be saddled with any liability except what is mentioned in the Resolution Plan.”
Relying on the fresh slate principle, a successful resolution applicant can now deny any additional payment for contingent claims which gets crystallised after a resolution plan is passed by NCLT. This will greatly provide comfort to potential resolution applicants as they will now have finality on the total payout proposed to be made for acquisition of a company undergoing insolvency proceedings.
Source: Barandbench
