TMI Blog2020 (1) TMI 1270X X X X Extracts X X X X X X X X Extracts X X X X ..... ful 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the Applicant Next Orbit Ventures Fund, opposes the approval of the Resolution Plan by this Bench. The Prayer the Applicant in the case is as under:- a. Allow the applicant hereto intervene in the instant matter; b. Reject the Resolution Plan as submitted by Mr. Manish Kumar Baldeva, The Resolution Professional, for approval of the Adjudicating Authority under section 30(6) of the Code; c. Pass any further orders in the interest of justice as this Hon'ble Tribunal Pleases. 2. Brief on the Corporate Debtor and the CIRP in respect of Print House (India) Pvt. Ltd. 2.1. The Corporate Debtor is engaged in the business of commercial printing and packaging, having its operations situated in Navi Mumbai. The printing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sify Technologies Limited; (b) Staple Pins Private Limited; and (c) Next Orbit Ventures Fund. 2.6. At the 18th CoC meeting held on 26 August 2019, the CoC deliberated and voted in favour of Sify Technologies Limited, approving its resolution plan as mentioned below. Further as per the Evaluation matrix which has been recorded in the last CoC meeting held on 26 August 2019, Sify scored 93.85 whereas Next Orbit scored only 22.44. The details of the voting in the CoC meeting which approved the Plan of the successful Resolution Applicant is as under:- Item No. Particulars Vote by Pegasus Asset Reconstruction Pvt. Ltd. (voting share 70.05%) Vote by Sumi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hly on commercial parameters yet, since the Corporate Debtor's business as per the successful Resolution Plan would shift from printing to Data Centre, therefore, it should not have been approved by the CoC. 4. Submissions by the Resolution Professional 4.1. Incorporated in the year 1995, Sify Technologies Limited is one of the major integrated Information Communication Technology (ICT) solutions and service provider in the country. Sify operates in domestic and international market, with large infrastructure facilities in Mumbai, Chennai, Noida, Bangalore, Hyderabad and telecom infrastructure across 1600 towns in India. Sify's revenue streams originates from telecom services, data centre services, cloud and managed services, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de as the IB Code says that the Resolution Plan should maintain the ongoing character of the business. 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. 5.1. It is very common in the life cycle of a Company to change its portfolio mix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the same business. 5.3. In fact, the change in business and the portfolio mix, are all part of commercial decision of the CoC which is clearly upheld by Hon'ble Supreme Court in case of K. Shridhar Vs. Indian Overseas Bank Others in Civil Appeal No. 10673 of 2018, Order dated 05 February 2019 which reads as under:- The legislature, consciously, has not provided any ground to challenge the commercial wisdom of the individual financial creditors or their collective decision before the adjudicating authority. That is made non-justiciable. This clearly brings out that the commercial wisdom of the CoC is supreme and cannot be challenged. 6. In view of the above, MA 3724/2019 preferred by Next Orbit Ventures Fund, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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