All Liabilities of Corporate Debtor stand Extinguished after Approval of Resolution Plan: NCLT

The National Company Law Tribunal (NCLT) ruled that once a resolution plan for a corporate debtor is approved, all liabilities of the debtor are extinguished. The decision aligns with the provisions of the Insolvency and Bankruptcy Code (IBC) that aim to give companies a fresh start after resolving financial distress. This ruling ensures that companies undergoing insolvency proceedings are not burdened by past liabilities once a resolution plan is successfully implemented, thus allowing them to focus on their recovery and revival.