The primary goal of a Resolution Plan as well as the sale of a Corporate Debtor as a Going Concern remains the same i.e revival of Corporate Debtor’s business – Universaltech Paper LLP Vs. Mr. Krishnaswami CVR, Liquidator of Kohinoor Pulp & Paper Pvt. Ltd. – NCLT Kolkata Bench
In IA to grant the reliefs/ concessions to successful bidder, Hon’ble NCLT Kolkata Bench holds that:
(i) The primary goal of a resolution plan as well as the sale of a Corporate Debtor as a going concern remains the same i.e revival of the Corporate Debtor’s business. The struggles faced by the purchaser during the sale of a Corporate Debtor as a ‘going concern’ and that of the Successful Resolution Applicant are similar, if not the same. As such, comparable reliefs and concessions ought to be granted in both cases.
(ii) While the successful bidder is allowed the liberty to file application before the Adjudicating Authority claiming reliefs and concessions, the said reliefs and concessions cannot be too elaborate and general and must be in consonance with the process document in the liquidation proceedings.
(iii) With respect to the waivers sought in relation to guarantors, the judgment of Lalit Kumar Jain v Union of India & Ors. (2021) ibclaw.in 61 SC wherein the Hon’ble Supreme Court held in para 133 that sanction of a resolution plan and finality imparted to it by section 31 does not per se operate asa discharge of the guarantor’s liability shall apply. In view of the above position of law, the sale of the assets of the Corporate Debtor ‘as a going concern’ shall be binding on the Corporate Debtor and other persons, authorities etc.