Transaction Audit Report is Sufficient to File Application for Avoidance of Preferential Transactions u/s 43 of IBC: NCLAT [Read Order]
The tribunal rejected the contention that the liquidator should have formed an independent opinion before filing an application for avoidance of preferential transactions under section 43 (1) of the IBC
NCLAT – Section 43 of IBC – Insolvency and Bankruptcy Code – Filing application under IBC Section 43 – taxscan
NCLAT – Section 43 of IBC – Insolvency and Bankruptcy Code – Filing application under IBC Section 43 – taxscan
The New Delhi bench of the National Company Law Appellate Tribunal ( NCLAT ) held that Transaction Audit Report is sufficient to file an application for avoidance of preferential transactions under section 43 of the Insolvency and Bankruptcy Code, 2016 ( IBC ).
Alok Tripathi,the Suspended Director filed the appeal under Section 61 of the IBC against the Order passed by the National Company Law Tribunal ( NCLT ) whereby the said I. A. was allowed and the Appellant was directed to deposit a sum of Rs. 3,67,900/- (Rupees Three lakhs, sixty-seven thousand and nine hundred only.
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The Appellant met Mr. Vijay Thapar, who assured the Director to get him a big loan and took hefty amounts of money as service charges. However, he never arranged for the assured loan for the Corporate Debtor. After paying the money to him, the finances of the Company went into doll-drum and resulted into the collapse of the Company.
Due to the inability of the Corporate Debtor to pay its Creditors, they approached the Adjudicating Authority, and the Corporate Debtor was placed under CIRP and subsequently under liquidation. The Liquidator filed application under Section 43 of the IBC based upon the Transaction Audit Report.
The appellant submitted that the amount under contention in the Transaction Audit Report was withdrawn by the Appellant against the amount payable by the Corporate Debtor to him and the amount was utilised for the benefit of the Corporate Debtor to keep it running and protected from the rigors of CIRP.
It was argued that the Liquidator had failed to form his independent opinion about the existence of the preferential transaction and that as per the provisions of Section 43, the Application by the Resolution Professional or the Liquidator, as the case may be, is to be filed after forming his opinion in this regard.
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The tribunal rejected the contention that the liquidator should have formed an independent opinion before filing an application for avoidance of preferential transactions under section 43 (1) of the IBC.
“When the Liquidator has got a Transaction Audit Report done and on the basis of which has come to a conclusion that this is a preferential transaction, after which he filed an I.A. before the Adjudicating Authority, in such conditions, we cannot agree with the submissions of the Appellant that the Liquidator has not formed an opinion. We reject the submissions of the Appellant accordingly”, .The NLCAT bench of Justices Ashok Bhushan ( Chairperson ), Barun Mitra ( Technical Member ) and Arun Baroka ( Technical Member ) held.
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