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2021 (4) TMI 594 - AT - Insolvency and BankruptcyApproval of resolution plan - main objection of the Applicants is that the Resolution Applicant intends to change the main business of the ‘Corporate Debtor’ form printing business to running Data Centers - change in the nature of the business of the ‘‘Corporate Debtor’’ is permitted or not. Whether the Resolution Plan approved under Section 31 by the Learned Adjudicating Authority is in contravention with the scope and objective of the Code which is ‘Resolution’, ‘maximization of value of assets of the ‘Corporate Debtor’’ and ‘promoting entrepreneurship’, ‘availability of credit and balancing interest of all stakeholders’? HELD THAT:- The Jurisdiction of NCLAT being in continuation of the proceedings envisages that any Appeal against an Order approving the Resolution Plan shall be in the manner and on the grounds specified in Section 61(3) of the IBC. Pertinently, the grounds, be it under Section 30(2) or under Section 61(3) are regarding testing the validity of the Resolution Plan approved by the CoC. The enquiry in such an Appeal would be limited to the power authorized to the RP under Section 30(2) of the IBC, or at best, by the Adjudicating Authority under Section 31(2) read with Section 31(1). This Tribunal can examine the challenge only in relation to the grounds specified in Section 61(3), which is limited. The Hon’ble Supreme Court in ‘K. Sashidhar’ [2019 (2) TMI 1043 - SUPREME COURT] has laid down the role of the CoC in accepting or rejecting the Resolution Plan as well as the role of the Adjudicating Authority while considering the Application from approval or rejection of the Resolution Plan. There is an intrinsic assumption that the ‘Financial Creditors’ are fully informed about the viability of the ‘Corporate Debtor’ and the feasibility of the Resolution Plan. The opinion expressed after due deliberations in the CoC meeting through voting, is a collective business decision. The legislature, consciously, has provided only limited grounds to challenge the commercial wisdom or their collective decision by the Adjudicating Authority. The submission of the Appellant that interest of all stakeholders is ignored, is not sustainable, keeping in view, the substantial amounts earmarked for workmen and employees in the aforenoted table and also what Schedule V of the Plan has envisaged to balance the interests of all stakeholders. Thus, it can be seen from the Sections 30(2) & 31 and Regulations 37, 38 and 39 that there is nothing in the Code which prevents a ‘Resolution Applicant’ from changing the present line of business to adding value or creating ‘Synergy’ to the existing assets and converting an obsolete line of business to a more ‘viable and feasible’ option. Appeal dismissed.
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