Whether change of business of the Corporate Debtor by Successful Resolution Applicant is permissible in Resolution Plan? – Jaydip Ghosh, Director of suspended Board of Directors of Castal Extrusion Pvt. Ltd. Vs. Niraj Agarwal, RP of Castal Extrusion Pvt. Ltd. – NCLAT New Delhi
In this important judgment, NCLAT held that:
(i) Law is settled on the point that the suspended Board of Directors have got no locus to file an appeal against the approval of the plan by CoC and finally approved by the Adjudicating Authority
(ii) It has already been held that an unsuccessful resolution plan applicant has got no vested right and also settled that acceptance of plan is commercial wisdom of the CoC.
(iii) The provision particularly Section 5(26) of the IBC permits a resolution plan that entails restructuring. Similarly Regulation 37(ba) also permits restructuring, whereas Regulations 37(a) and (b) even permit for transfer of all or part of the assets and also sale of all or part of the assets of the CD. Only requirement is to see whether situation permits to do the same in the interest of the concerned creditors.
(iv) it was commercial wisdom of the CoC to accept the plan which has been noticed by way of change of the business of the CD.
