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2020 (1) TMI 1270 - Tri - Insolvency and BankruptcyRejection of Resolution plan - Voluntary Insolvency invocation by the Corporate Debtor - main ground preferred by the unsuccessful Resolution Applicant for the rejection of the Resolution Plan of the successful Resolution Applicant is on the ground that the successful Resolution Applicant (Sify) would convert the business of the Debtor company from printing to Data Centre. This, as per the unsuccessful Resolution Applicant, would go against the IB Code as the IB Code says that the Resolution Plan should maintain the "ongoing" character of the business - HELD THAT:- This contention of the unsuccessful Resolution Applicant emanates from improper understanding of the Code. The term "ongoing" business means that the business of the Corporate Debtor should remain functional. It never means that the line of business cannot be changed. In fact, the Corporate Debtor had filed Petition under the provisions of Section 10 of the Code. Therefore, it was a case of voluntary insolvency as the printing business of the Corporate Debtor was under distress and revenue generation was not sufficient to continue the printing business. It is very common in the life cycle of a Company to change its portfolio mix or even the line of business. It is for this reason that in many companies mergers and acquisition, restructuring, hiving off businesses are all part of the life cycle of a company. In this particular case, as the printing business of the Corporate Debtor Company has been unsuccessful, the prospective Resolution Applicant (Sify) intends to change the line of business from printing to Data Centre. The Sify in its Resolution Plan proposes to continue the services of majority of the workmen and employees who are currently on the rolls. It undertakes to provide training and upgradation of skills so that all the existing employees can be retained in the new line of business - This clearly indicates that there is always a possibility of change in business and it is not binding upon a successful Resolution Applicant to continue in the same business. In fact, the change in business and the portfolio mix, are all part of commercial decision of the CoC - thus, the commercial wisdom of the CoC is supreme and cannot be challenged. Resolution is to be approved - present application dismissed.
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