Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2020 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (3) TMI 1208 - AT - Insolvency and BankruptcyCIRP Proceedings - scope of preferential transactions - It was submitted that the "corporate debtor" paid a sum of ₹ 2,50,00,000 towards part payment of principal amount to the appellant on October 29, 2016 which is more than one year before the commencement date of initiation of the "corporate insolvency resolution process", therefore, it cannot be termed to be "preferential transactions". - HELD THAT:- Section 43 of the "I and B Code" deals with "preferential transactions", it is clear that if there is a transfer of property or an interest thereof of the "corporate debtor" for the benefit of a creditor or a surety or a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the "corporate debtor" is transferred, then it comes within the meaning of "preferential transactions". The "preferential transactions" has the effect of putting such creditor or a surety or a guarantor in a beneficial position than it would have been in the event of a distribution of assets being made in accordance with section 53 - As per sub-section (3) of section 43, transfer made in the ordinary course of the business or financial affairs of the "corporate debtor" or the "transferee" be not included within the meaning of "preferential transactions". Whether in such case, the transactions, in question, can be claimed to be a transfer made in the ordinary course of business? - HELD THAT:- It is not the case of the appellants that apart from the appellants, all other creditors were paid their dues during the ordinary course of business. It is only in the case of the appellants that the amounts were released and repaid just before a period of one year from the date of the insolvency commencement date, i. e., July 18, 2017 - This apart, as it is not in dispute that the promoters of the "corporate debtor" hold 99.4 per cent. shareholding in "Excello Fin Lea Ltd." and 50 per cent. shareholding in "Tirumala Balaji Alloys P. Ltd." and rest of the 50 per cent. shareholding of the "Tirumala Balaji Alloys P. Ltd." is with the relatives of the promoters of the "corporate debtor", i. e., "Rungta Family", we are of the view that all the transactions made during the period of two years preceding date of the insolvency commencement date, i. e., July 18, 2017 come within the meaning of "preferential transactions". The impugned order dated August 6, 2018 passed by the Adjudicating Authority, Mumbai Bench, Mumbai is upheld - appeal dismissed.
|