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2023 (4) TMI 1137 - AT - Insolvency and BankruptcyPreferential Transactions - appellant are related party to the Corporate Debtor or not - repayment to related parties and repayment to the non-related parties - HELD THAT:- There is no dispute between the parties that repayment to related parties and repayment to the non-related parties were within the lookout period. The avoidance transaction in Insolvency Proceedings has been dealt with in the legislative schemes under several enactments relating to subject. We may have a look over the legislative scheme with regard to avoidance transaction prior to enforcement of IBC to appreciate the changes in the legislative scheme which has been brought by the IBC - Anuj Jain [2020 (2) TMI 1259 - SUPREME COURT] was a case where the Hon’ble Supreme Court was considering a case where IRP filed an Application for avoidance of certain transactions as preferential transactions where the Corporate Debtor had created security interest by way of mortgage in favour of lenders of third party that is “JAL” on the unencumbered land of the Corporate Debtor which transaction were sought to be avoided by RP by filing an application. The Adjudicating Authority has declared the said transaction as preferential transaction. Taking financial assistance from related and non-related parties which transactions are subject of enquiry in the present Appeal can not be held to be ordinary course of business of the Corporate Debtor. The expression “ordinary course of business” or “financial affairs of the Corporate Debtor” has to be read “ejusdem generis”. The expression “financial affairs of the Corporate Debtor” cannot be given an extended meaning as contended by Learned Counsel for the Appellants that all financial transactions done by the Corporate Debtor is covered within expression “financial affairs’ hence the loan taken by the corporate debtor from different related and non-related parties is part of the financial affairs cannot be accepted - Undistinguished common flow of the business of the Corporate Debtor does not contemplate any such or particular situation where the Corporate Debtor’s claim that its financial position became unstable due to market condition and had started arranging money from their relatives and other parties. Money arranged from relative and other parties by the Corporate Debtor thus cannot be held to be part of ordinary course of business or part of financial affairs. When the law mandates that any transfer made in pursuance of order of Court can not preclude such transfer to be deemed to be giving a preference there is no occasion for not accepting any transaction made in pursuance to a notice or demand issued by the Lender or by threat extended by lender for initiating any legal proceeding as preferential transaction. The legislative scheme which is clarified by the above proviso clearly leads to the conclusion that any transaction under any notice, demand or threat shall not lose its character of preferential transaction merely on the above reason. The submissions of the Appellant on the ground that the transaction was entered into by the Corporate Debtor due to pressure put on it has no relevance and shall not change the nature of transaction from preferential transaction. Whether the composite application under Section 43, 44, 45, 46, 66, 67 and 60(5) of the Code could not have been filed by the RP? - HELD THAT:- The ingredients of Section 43, 45 and 66 are different and Resolution Professional is expected to keep such requirement in view while making motion to the Adjudicating Authority - When we look into the Application which has been filed in the present case the Resolution Professional has in the avoidance application in his application has dealt with preferential transaction undertaken by the Corporate Debtor and undervalued transaction undertaken by the Corporate Debtor as well as fraudulent transaction in different heads - thus allegations and averments were separately made and filing of composite application does not lead to any infirmity in the Application. We are not persuaded to accept the submission of the Appellant that since the composite Application was filed it ought to have been rejected. The Adjudicating Authority has rightly allowed the Application filed by the Resolution Professional and declared the preferential transactions undertaken in favour of the Appellants and directed the Appellants to refund the amount within three months - Appeal dismissed.
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