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2021 (3) TMI 464 - Tri - Insolvency and BankruptcyPreferential, undervalued and fraudulent transactions by Respondent - survival of application filed under Section 43 for avoidance of preferential transactions beyond the conclusion of the resolution process - role of the RP in pursuing such applications - HELD THAT:- On a perusal of Section 43 of the I & B Code, it is clear that to adjudicate the applicability of Section 43, one must look back two years from the date of commencement of CIRP, for a transaction with a related party and one year from the date of commencement of CIRP, for a transaction with a person other than a related party. Here, the application was admitted and CIRP initiated on 15.01.2018, the Resolution Plan was approved by the CoC on 28.12.2018 and approved by the Adjudicating Authority on 23.01.2019. This application was first heard before the Tribunal on 03.10.2018 and NCLT, Chennai Bench had posted it for making final submissions. But from the proceedings, it is seen that the applicant as well as Respondents sought several adjournments and which is beyond the approval of Resolution Plan approval on 28.12.2018. A perusal of the chronology of events would show that the avoidance application in this case was filed before the CoC had approved the Resolution Plan and almost end of the submissions on the Resolution Plan being heard by the NCLT. The NCLT did not pass any orders on the avoidance application before or at the time of approval of the Resolution Plan - This Tribunal is of an opinion that an avoidance application for any preferential transaction is meant to give some benefit to the creditors of the Corporate Debtor. The benefit is not meant for the Corporate Debtor in its new form, after the approval of the Resolution Plan. This is clear from a perusal of Section 44 of the IBC, which sets out the kind of orders which can be passed by the NCLT in case of preferential transactions. The benefit of these orders would be for the Corporate Debtor, prior to approval of the Resolution Plan. Any property transferred or sum acquired in an order passed in respect of a preferential transaction would have to form part of the final Resolution Plan. The Resolution Plan would have to take into consideration such amounts and benefits which can be given to the Corporate Debtor for the benefit of the CoC. The benefit of an avoidance application is not meant for the company, after the Resolution Plan is considered by the CoC and approved by the NCLT. The benefit of orders passed in respect of such transactions may be passed on to the Corporate Debtor which may assist in liquidating the company at the final stage. However, that is not the case in the present application. The NCLT ought not to be permitted to now adjudicate the preferential nature of the transaction, after the approval of the Resolution Plan. This Tribunal is of the view that after the approval of Resolution Plan, this Tribunal has no jurisdiction to entertain and decide avoidance applications, in respect of a Corporate Debtor, which is now under a new management. i.e., M/s Acme Chem Limited. - Application dismissed.
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