Will the sale of Corporate Debtor as a Going Concern have precedence, rather than resorting to the Scheme of Compromise under Section 230(1) of the Companies Act, 2013 – Narottamka Trade & Vyapaar Pvt. Ltd. Vs. SPP Insolvency Professionals LLP Liquidator Kamachi Industries Ltd. and Anr. – NCLAT Chennai
Hon’ble NCLAT held that:
(i) The sale of the Corporate Debtor as a going concern under Section 32(e) & 32A is more transparent and effective; therefore, the sale of the Corporate Debtor as a going concern will have precedence, rather than resorting to the Scheme of Compromise under Section 230 (1) of the Companies Act, 2013.
(ii) While taking action under Chapter 6 of Liquidation Process Regulations, dealing with realizations of assets of the Corporate Debtor, selling the Corporate Debtor as a going concern, will have to be the first priority for the Liquidator, in order to meet the objective of the I & B Code, 2016, i.e. the Corporate Debtor is to be kept, as a going concern after resolution of the insolvency.