Tribunal Upholds Decision on Preferential Transactions, Ex-Director Ordered to Transfer Funds

The Tribunal upheld the Adjudicating Authority's decision regarding preferential transactions under Section 46 of the IBC, directing the ex-Director to transfer disputed amounts back to the Corporate Debtor's account. The appellant's failure to comply with procedural requirements led to ex-parte proceedings and dismissal of the appeal without costs.

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Issues Involved:
1. Validity of the ex-parte proceedings against the appellant.
2. Legitimacy of the transactions carried out by the ex-Director of the Corporate Debtor.
3. Compliance with procedural requirements by the appellant in the adjudicating process.
4. Determination of preferential transactions under Section 46 of the IBC.

Issue-wise Detailed Analysis:

1. Validity of the ex-parte proceedings against the appellant:
The appellant contended that the proceedings were conducted ex-parte against him despite having valid reasons for his absence. The appellant claimed he was not given an opportunity to present his defense adequately. The Tribunal noted that the appellant's proxy counsel undertook to file a reply within two weeks on 16.12.2020, but failed to do so, leading to the case being listed for ex-parte hearing on 16.2.2021. The Tribunal concluded that the appellant was remiss in seeking permission from the Adjudicating Authority to take his reply on record, resulting in the ex-parte adjudication.

2. Legitimacy of the transactions carried out by the ex-Director of the Corporate Debtor:
The appellant argued that the transactions with Simran Technologies and Lotus Imports were genuine business transactions. The Tribunal examined the records and found that the appellant, Mr. Sandeep Sood, had not provided satisfactory explanations or proof that the transactions were related to business dealings. The Tribunal observed that significant amounts were debited from the Corporate Debtor's accounts without clear purposes or supporting evidence, leading to the inference that these transactions were not conducted in the ordinary course of business.

3. Compliance with procedural requirements by the appellant in the adjudicating process:
The appellant failed to file his reply on time and did not seek permission from the Adjudicating Authority to take his reply on record. The Tribunal noted that the appellant's reply was submitted after the case had been ordered to be heard ex-parte. The Tribunal emphasized that the appellant's failure to comply with procedural requirements resulted in the ex-parte proceedings and the subsequent judgment.

4. Determination of preferential transactions under Section 46 of the IBC:
The Tribunal evaluated whether the transactions in question were preferential under Section 46 of the IBC. The transactions, amounting to significant sums, were carried out within two years prior to the initiation of the Corporate Insolvency Resolution Process (CIRP). The Tribunal found that the appellant did not provide satisfactory explanations or evidence to prove that these transactions were part of normal business operations. Consequently, the Tribunal upheld the Adjudicating Authority's decision that the transactions were preferential and directed the appellant to transfer the monies back to the Corporate Debtor's account.

Conclusion:
The Tribunal concluded that the Adjudicating Authority correctly directed the ex-Director of the Corporate Debtor to transfer the disputed amounts back to the Corporate Debtor's account within two weeks. The appeal was dismissed, and no order as to cost was made.

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