Goal plan can't be dismissed if goal candidate can show plausibility to run organization in future

  • Corporate Law
  • financeseva

If a resolution applicant can show the feasibility to run company in the future. The resolution plan cannot be rejected because the corporate debtor is not a worry.  

In the instant case, the Appellant moved an application under section 7, pursuant to which the Corporate Insolvency Resolution Process was initiated against the corporate debtor. The Resolution plan submitted by the promoter was considered by the Committee of Creditors, which by voting of 74.19 percent of voting share approved the resolution plan. 

The NCLT approved said plan by impugned order and the Appellant, one of the dissenting financial creditors, challenged the impugned order alleging different infirmities and irregularities. 

Since the Committee of Creditors had gone through financial aspects, including viability, feasibility and other terms of resolution plan and had approved a plan with 74.19 percent of voting share, The Appellate Tribunal was not inclined to decide such an issue merely because the appellant was a dissenting financial creditor, no interference was called for in absence of any illegality.