Protection of action taken in good faith

A resolution professional takes charge of a failing company on a Sunday. Wages are due, the plant is running, suppliers are calling, and a hard decision cannot wait for a court order. If every unhappy creditor, promoter or employee could sue him personally for a decision that did not work out, nobody sensible would take the job. Section 233 of the Code gives a shield, and the word that unlocks it is good faith.

In two minutes

Section 233 bars any suit, prosecution or other legal proceeding against the Government or its officers, the Chairperson, Members, officers and employees of the Board, an insolvency professional or a liquidator, for anything done or intended to be done in good faith under the Code or its rules and regulations.

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