If the Resolution Plan contemplates a change in the nature of business of Corporate Debtor to another line when the existing business is obsolete or non-viable, it cannot be construed that the Resolution Plan is not feasible or viable – Next Orbit Ventures Fund Vs. Print House (India) Pvt. Ltd. – NCLAT New Delhi

NCLAT held that merely because the Resolution Plan does not stick to the core printing business, in its truest sense, it cannot be said that the approved Resolution Plan lacks the right vision and proposition specially in the light of the converging market forces and refocused business models. Further, it has been agreed by the Resolution Applicant that the new management will upgrade the skills of the workmen and employees for this business cycle. In Arcelor Mittal India Private Limited [2018] ibclaw.in 31 SC it has been observed by the Hon'ble Apex Court that `if there is a `Resolution Applicant' who can continue to run the Corporate Debtor as a going concern every effort must be made to try and see if this is possible'. Going concern does not mean that the nature of the business cannot be changed with an objective to add value or create synergy. If it is viewed in this perspective, it would be interpreting the word `going concern' in a very narrow compass which is not the scope and objective of the Code.

Related Posts

Scroll to Top