New Delhi, July 20 -- The Supreme Court reaffirmed the 'clean slate' principle under the Insolvency and Bankruptcy Code (IBC) while urging a review of the law to better protect Micro, Small and Medium Enterprises (MSMEs) and other small operational creditors.

A Bench comprising Justice Manoj Misra and Justice Manmohan held that once a resolution plan is approved under the IBC, all claims not included in the plan stand extinguished. This prevents operational creditors from pursuing civil suits or arbitration for dues that had not been finalised before the plan's approval.

The judgment came while allowing appeals filed by Tata Steel, overturning a prior decision of the Bombay High Court's Nagpur Bench that had permitted such proceedings....