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TMI Blog2021 (4) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... Similarly, in order to prove the time period of transaction held prior to two years from the date of commencement of CIRP, nothing was placed on record to that extent also. Thus the contention of the Applicant as to this transaction being preferential transaction, under Section 43 of I B Code, cannot be accepted. Even otherwise, while relying on Regulation 35 A of CIRP Regulations a specific timeline has been provided, by which the Resolution Professional has to form an opinion if the Corporate Debtor has been subjected to any of the objectionable transactions - The objectionable transactions including preferential transactions cannot be an unending process. The examination has to commence on the insolvency commencement date. The Resolution Professional has to form an opinion by the 75th day of commencement of CIRP. If the Resolution Professional comes to the conclusion that the Corporate Debtor has been subject to preferential transactions, the determination has to be made by the 115th day commencement of CIRP. On verification of the records, it is seen that even though an Application for avoidance of preferential transactions has been filed by the Applicant on 04.01.2021 [after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .00 0 1139201.00 3 Mikesh Joseph 2407593.00 2188500 219093.00 4 Sumesh Joseph 164461.00 0 164461.00 5 Rajesh Joseph 1357597.00 87500 1270097.00 Total 10084344.00 2276000 7808344.00 4. The Respondents who are the Managing Directors and suspended Directors of the Corporate Debtor filed reply to the Application stating that the Company's account for the Financial year 2018-2019 was audited by M/s. Maharaj N R Suresh and Co and filed a Report on 20.05.2020. The Report states that the Respondent No.1 Company under the head "other payables" is required to make payments of an amount of ₹ 1,20,57,031/- [One Crore Twenty Lakhs Fifty-Seven Thousand Thirty-One Only] to the Respondent Nos.4,5 and 6. 5. It is further stated that the outstanding dues which are payable by the Respondent No.1 Company in favour of the Respondent Nos.4 to 6 exceeds the preferential transactions alleged in this application i.e. (₹ 1,20,57,031 - Rs. 78,08,344 = ₹ 42,48,687). Hence, they submit that they are entitled to get back a sum of ₹ 42,48,687 as the same has been paid from their personal accounts in their individual capacity. 6. This Tribunal gone through the averm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new value" means money or its worth in goods, services, or new credit, or release by the transferee of property previously transferred to such transferee in a transaction that is neither void nor voidable by the liquidator or the resolution professional under this Code, including proceeds of such property, but does not include a financial debt or operational debt substituted for existing financial debt or operational debt. (4) A preference shall be deemed to be given at a relevant time, if- (a) it is given to a related party (other than by reason only of being an employee), during the period of two years preceding the insolvency commencement date; or (b) a preference is given to a person other than a related party during the period of one year preceding the insolvency commencement date. 8. On a perusal of the above provision it is clear that Section 43 of I&B Code, 2016 is mainly focussed in two points: - (i) preferential transaction - "being the transaction where an insolvent debtor makes transfer to or for the benefit of a creditor so that such beneficiary would receive more than what it would have otherwise received through the distribution of bankruptcy estate." and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e corporate debtor has been subjected to any transactions covered under sections 43, 45, 50 or 66, he shall make a determination on or before the one hundred and fifteenth day of the insolvency commencement date, under intimation to the Board. (3) Where the resolution professional makes a determination under sub-regulation (2), he shall apply to the Adjudicating Authority for appropriate relief on or before the one hundred and thirty-fifth day of the insolvency commencement date. 12. The objectionable transactions including preferential transactions cannot be an unending process. The examination has to commence on the insolvency commencement date. The Resolution Professional has to form an opinion by the 75th day of commencement of CIRP. If the Resolution Professional comes to the conclusion that the Corporate Debtor has been subject to preferential transactions, the determination has to be made by the 115th day commencement of CIRP. The Resolution Professional also has to apply to the NCLT for appropriate relief on or before the 135th day commencement of CIRP. The prescription of the above timelines has a purpose. However, what is significant is the fact that under Regulation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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