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2019 (7) TMI 284 - AT - Insolvency and BankruptcyValidity of Resolution Plan - a unique plan which provides no revival of the corporate debtor but to close it by discharging its debts to all stakeholders inclusive of its staff and workmen - Corporate Applicant - grievance of the Appellant- ‘Industrial Services’ is that the suits were filed by the ‘Corporate Debtor’ during the period of ‘Moratorium’ against the ‘Industrial Services’ and, therefore, the same cannot be taken into consideration to deny the admissible dues payable to the ‘Industrial Services’- (Operational Creditor) - whether the plan in question is in conformity with Section 30(2) (e) of the ‘I&B Code’ and achieves the Objects of the ‘I&B Code’? HELD THAT:- Resolution Plan has been prepared for ensuring settlement of dues of the creditors on receipt of fund as proposed in payment Schedule of the Resolution Plan Supervision & implementation of the resolution plan will be done by the Board of Directors of the Company as "going concern" - Though during the ‘Resolution Process’, and thereafter, the ‘Resolution Applicant’ is required to ensure that the company remains as a going concern but contrary to the provisions of the ‘I&B Code’, closure of the ‘Corporate Debtor’ has been proposed and approved by the Adjudicating Authority. In SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. [2019 (1) TMI 1508 - SUPREME COURT] the Hon’ble Supreme Court noticed the Preamble of the Code and held that the primary focus of the legislation is to ensure revival and continuation of the ‘Corporate Debtor’ by protecting the ‘Corporate Debtor’ from its own management and from a corporate’s death by liquidation. As the ‘Resolution Plan’ is against the object of the Code and the application under Section 10 was filed with intent of closure of the ‘Corporate Debtor’ for a purpose other than for the resolution of insolvency, or liquidation, we hold that the part of the ‘Resolution Plan’ which relates to closure of the ‘Corporate Debtor’/ ‘Corporate Applicant’ being against the scope and intent of the ‘I&B Code’ is in violation of Section 30(2)(e) of the ‘I&B Code’ - the part of the approved ‘Resolution Plan’ in so far as it relates to closure of the ‘Corporate Debtor’/ ‘Corporate Applicant’ but uphold the rest part of the ‘Resolution Plan’, as approved is set aside. The case is remitted to the Adjudicating Authority, Kolkata Bench, to make necessary correction in the ‘Resolution Plan’ by asking the ‘Corporate Debtor’ to delete the portion of the plan which proposes closure of the Company - appeal allowed by way of remand.
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