Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2022 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 1234 - AT - Insolvency and BankruptcyUndervalued Transactions - Preferential Transactions - Fraudulent Transaction - it is alleged that these transaction had been carried out by the Members of the Suspended Management though two years prior to the Insolvency Commencement date - HELD THAT:- Though the relevant time is provided for under the Code, the fact remains that unless the Liquidator, scrutinises and peruses the material which is relevant, to determine whether the ‘Preferential Transactions’ or ‘Undervalued Transactions’ took place at the ‘relevant time’, he cannot come to a conclusion as to whether these transactions took place ‘during the relevant time’. There are force in the contention of the Liquidator that unless he is in the possession of all the material documents, he cannot determine whether they are ‘Undervalued Transactions’ or ‘Preferential Transactions’, during the relevant period of time, and therefore, the ‘Corporate Debtor’ cannot deny these documents at the threshold itself. There is no provision in the Code for the Appellant to invoke the clause concerning relevant period of two years solely on the ground of denying documents/information directed to be given to the Liquidator - this Tribunal, is of the earnest view that the Adjudicating Authority has rightly invoked its Inherent Power under Rule 11 of the Company Law Rules, 2016 in the interest of justice to direct the Promoters to provide the relevant information. On an Application preferred by the Liquidator, seeking clarification as to whether the Liquidator was allowed to investigate the ‘Transactions’ executed or entered into by the ‘Corporate Debtor’, beyond two years from the ICD and relevant records can be asked for from the Promoters, the Adjudicating Authority has affirmed that the Promoters should give the necessary documents to the Liquidator and cooperate to enable the Forensic Auditors M/s. KPMG to complete the Audit - there is no illegality or infirmity in the Order of the Adjudicating Authority having exercised its Inherent Powers under Rule 11 of NCLT Rules, 2016 and hence this Appeal fails. Appeal dismissed.
|