IBC’s Clean Slate and the Unpaid Sin: Section 32A, Section 66, and the Corporate Metamorphosis of Liability
IBC’s Clean Slate and the Unpaid Sin: Section 32A, Section 66, and the Corporate Metamorphosis of Liability Posted on 27th February, 2026 (GMT 04:57 hrs) ABSTRACT The Insolvency and Bankruptcy Code, 2016 establishes a dual legal framework combining fraud recovery and insolvency resolution. Section 66 embodies the Code’s accountability function by empowering recovery from fraudulent and wrongful trading, thereby restoring value to creditors. In contrast, Section 32A, introduced in 2019 with retrospective effect, extinguishes corporate criminal liability once a resolution plan is approved and control passes to new management. This paper argues that these provisions operate in structural tension: Section 66 presupposes continuity of corporate liability to enable recovery, while Section 32A extinguishes corporate criminal liability while preserving corporate identity, assets, and economic continuity. Through a doctrinal case study of Dewan Housing Finance Corporation Ltd. (DHFL)...