REASSESSING CLEAN SLATE DOCTRINE POST–KALYANI TRANSCO VS M/S BHUSHAN POWER AND STEEL

AUTHOR – SARGA P S, STUDENT AT NATIONAL LAW INSTITUTE UNIVERSITY, BHOPAL

BEST CITATION – SARGA P S, REASSESSING CLEAN SLATE DOCTRINE POST-KALYANI TRANSCO VS M/S BHUSHAN POWER AND STEEL, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (3) OF 2026, PG. 481-485, APIS – 3920 – 0001 & ISSN – 2583-2344.

ABSTRACT

This paper examines the evolving scope of the Clean Slate Doctrine under the Insolvency and Bankruptcy Code, 2016 (IBC). The doctrine, reflected in Sections 31 and 32A of the IBC, was designed to ensure that a successful resolution applicant acquires the corporate debtor free from past liabilities, thereby encouraging investment in distressed assets and facilitating corporate revival. However, the recent Supreme Court decision in Kalyani Transco v Bhushan Power and Steel Ltd has raised concerns regarding the certainty and breadth of this protection. While the Court did not directly reinterpret Section 32A, its refusal to restrain enforcement actions under public law statutes such as the Prevention of Money Laundering Act (PMLA) suggests a narrowing of the practical protection offered by the Clean Slate Doctrine. It studies the role of disqualification provisions under Section 29A of the IBC and their interaction with the Clean Slate Doctrine. The paper concludes that while the IBC aims to promote certainty and asset revival, recent judicial developments risk undermining investor confidence unless clearer boundaries are established between insolvency protections and parallel public law enforcement actions.

Keywords- Clean Slate Doctrine, Insolvency and Bankruptcy Code, Distressed M&A, Section 32A IBC, Resolution Applicant, Corporate Insolvency Resolution Process, Section 29A, PMLA, Judicial Review, Investor Confidence.