The NCLAT has dismissed an appeal by shareholder Titus Babu, who held 1.35 lakh equity shares of Sintex Industries Ltd. that were extinguished under the company's NCLT-approved resolution plan led by a Reliance Industries-ACRE consortium, and who sought over Rs. 110 crore in compensation, fresh equity and damages over that extinguishment.
The Tribunal held that under the IBC's 'clean slate' doctrine, no independent membership right survives once the underlying shareholding is extinguished by an approved resolution plan, and that 'member' and 'shareholder' are legally synonymous under Section 2(55) of the Companies Act for this purpose — meaning a shareholder's rights rise and fall entirely with the equity itself, with nothing separate surviving its extinguishment.
The ruling reaffirms that pre-CIRP shareholders retain no residual claim once their equity is extinguished under an approved resolution plan, giving resolution applicants and acquirers greater certainty that the post-acquisition equity structure they receive cannot later be reopened or challenged by shareholders whose pre-CIRP holdings were wiped out.