NCLAT stops Burn Standard closure and retrenchment
The National Company Law Appellate Tribunal (NCLAT) Monday stopped the closure of West Bengal based wagon maker Burn Standard Company and retrenchment of its workers.
The NCLAT set aside the Kolkata NCLT's approval to close down the PSU as part of a resolution plan.
"We set aside the part of the approved 'Resolution Plan' in so far as it relates to closure.... The 'Corporate Debtor' is directed to ensure that the company remains a going concern and employees are not retrenched," the NCLAT order passed by Justice S J Mukhopadhayay and Justice Bansi Lal Bhat said.
It said, "The 'Resolution Plan' is against the object of the (insolvency) 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 closure of the 'Corporate Debtor'/'Corporate Applicant' being against the scope and intent of the I&B Code is in violation of Section