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TMI Blog2022 (8) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... ess (CIRP) against M/s. Panyam Cements and Mineral Industries Limited (Corporate Debtor). On 14.05.2020, this Tribunal admitted for CIRP of the Corporate Debtor and the Applicant appointed as Interim Resolution Professional (IRP). ii. Subsequently, IRP made a public announcement on 23.05.2020 for inviting claims from the Creditors of the Corporate Debtor and last date for submission of claims on or before 04.06.2020. Accordingly, IRP constituted Committee of Creditors (CoC). iii. In 1st CoC meeting was held on 20.06.2020, the IRP appointed as Resolution Professional (RP). iv. In 4th CoC meeting held on 20.08.2020, approved the appointment of G.D. Apte & Co. as the Transaction Auditor of the Corporate Debtor vide its letter dated 29.08.2020. v. On 09.01.2021, Auditor submitted his report to the Applicant and same was discussed and deliberated upon the CoC. Thereafter, final report was submitted by the Auditor on 21.05.2021. The report inter alia, sets out a list of preferential and undervalued transactions entered into by the Corporate Debtor during the review period as identified in accordance with Section 43 and 45 of IBC, 2016. As per auditor's report a sum of Rs. 13, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... official transporters of the Corporate Debtor. The Applicant gravely erred in calling the transactions which occurred in ordinary course of business as preferential transactions merely because the Sujala Pipes is a related party. Even the other transporters used to collect the amounts due to the Corporate Debtor and after deducting the transportation charges and incidental charges remit the balances into the account of the Corporate Debtor. d) The Auditors and Applicant failed to acknowledge Section 43(2), wherein it is specifically stated that preference shall not include the transfer made in the ordinary course of business and it should not be considered as preferential transactions. The Corporate Debtor purchased land in Bommanahalli and Hogasandhra Villages and entered into Development Agreement with Salarpuria Properties Private Limited and also a supplemental agreement on 30.01.2006, as per the terms of which the Corporate Debtor got entitled to 20% of the saleable area etc. e) The Corporate Debtor sold their rights pertaining to an area of 6000 Sq. Feet to one C.S. Vidya Sagar Rao in the year 2007-2008 through registered agreement for a consideration of Rs. 1.10 Crores a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vent the further loss to the creditors. j) From Section 43(2) of IBC it can be inferred that in order to consider a transaction as preferential transactions, there should be a transfer of property or interest in property and this transfer should be done on account of antecedent debt. In terms of Section 43(3) the transfers made by the Corporate Debtor cannot be considered as preferential transfers. All the payments are made by the Corporate Debtor for goods received, for future works and transportation services rendered to the Corporate Debtor and which crucial for the cement industry. Hence, the Application is liable to be dismissed. 4. Heard both the Counsel and perused the written submissions filed by the Counsel. The Counsel for the Applicant except placing the auditor's report did not file any documents with regard to the transactions which are allegedly preferential transactions. The Auditor's report cannot be taken as a proof of what is stated in the said report unless it is supported by the material on the basis of which the said conclusion or opinion were arrived at. The auditor's report with regard to the observations pertaining to the related parties is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to the disputes between the builder and the Corporate Debtor, the fact that there are disputes is not countered by the Applicant. Apart from there being no sufficient material to hold that the transactions alleged are preferential transactions. The ground raised by the Corporate Debtor with regard to the maintainability of this application needs to be considered. The contention is that the Resolution Plan is already approved and hence, the Tribunal does not have jurisdiction to entertain this Application. It is submitted that the Resolution Professional (RP) has vacated his office on 25.06.2021 and hence, he cannot pursue the present application. 6. As per Section 23 the role of the Resolution Professional (RP) is to manage the affairs of the Corporate Debtor during the Resolution Process and not thereafter. Until the proviso to Section 23 which was introduced with effect from 28.12.2019 was enacted the Resolution Professional (RP) mandate concluded with the CIRP. The proviso extended the mandate of the Resolution Professional (RP) till the approval of the Resolution Plan under Section 31(1) appointment of the Liquidator under Section 34. The continuation of a Resolution Prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not affect the proceedings of the Corporate Insolvency Resolution Process". 9. The contention of the Respondents therein that the avoidance applications would not affect the CIRP was also discussed. The Court observed that Form-H of the CIRP Regulations, which is filed by the RP at the time of submitting the Resolution Plan to the NCLT would mention the preferential transactions under Section 43, apart from other types of transactions. The contention that the avoidance applications would be pending at the stage when the RP files the plan was also appreciated and it was held that though at the first blush the said submission may appear attractive a closer analysis reveals that Form-H seeks to achieve what is mandated in Regulations and it is merely a format prescribed to provide the said details. Under the Scheme of IBC in so far as avoidance applications are concerned the RP has to collect the details, form an opinion, make a determination and submit the same to the NCLT within the prescribed timelines. This is independent of the various other steps which are part of the CIRP. The activities in respect of objectionable transactions which the RP has to conduct would run parallel wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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