State Cannot Blacklist a Company After Approval of Resolution Plan: Tripura HC rules New Management Cannot Be Punished for Old Misdeeds [Read Order]
The Tripura High Court ruled that a company revived under a resolution plan cannot be blacklisted for the past misconduct of its former management
![State Cannot Blacklist a Company After Approval of Resolution Plan: Tripura HC rules New Management Cannot Be Punished for Old Misdeeds [Read Order]](https://images.taxscan.in/h-upload/2025/08/16/2077485-resolution-plan-taxscan.webp "State Cannot Blacklist a Company After Approval of Resolution Plan: Tripura HC rules New Management Cannot Be Punished for Old Misdeeds [Read Order]")
In a recent ruling, the Tripura High Court held that the State cannot blacklist a company after approval of a resolution plan under the Insolvency and Bankruptcy Code, and that the new management cannot be punished for the actions of the old management. SREI Infrastructure Finance Limited, the petitioner, challenged the blacklisting order passed by the State of Tripura which banned...
In a recent ruling, the Tripura High Court held that the State cannot blacklist a company after approval of a resolution plan under the Insolvency and Bankruptcy Code, and that the new management cannot be punished for the actions of the old management.
SREI Infrastructure Finance Limited, the petitioner, challenged the blacklisting order passed by the State of Tripura which banned the company from participating in government contracts for three years.
The blacklisting was based on misconduct and defaults committed when the company was under its earlier management, before the approval of the resolution plan by the National Company Law Tribunal.
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The petitioner’s counsel argued that the blacklisting order defeated the purpose of the Insolvency and Bankruptcy Code, which gives a company a clean slate after a resolution plan is approved. They submitted that punishing the revived company would discourage resolution applicants and go against the objective of corporate revival under the Code.
The State’s counsel argued that the government has the right to choose with whom it will contract and that the past conduct of the company justified its decision to blacklist. They argued that the IBC does not take away the power of the State to act in the public interest and prevent companies with a history of misconduct from participating in future projects.
The Division Bench comprising Chief Justice Apresh Kumar Singh and Justice Arindam Lodh observed that the IBC ensures continuity of business and revival of companies under new management.
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The court explained that once a resolution plan is approved, the misconduct of the previous management cannot be attributed to the new management. The tribunal pointed out that blacklisting the company after approval of the resolution plan would defeat the clean slate principle recognised by law.
The court held that the blacklisting order against SREI Infrastructure Finance Limited was legally unsustainable. It quashed the order, stating that the company under new management must be given a fair chance to operate without carrying the burden of past misdeeds. The writ petition was allowed.
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