Dismissal of Application on Preferential Transactions under Insolvency Law

The Tribunal dismissed the application regarding preferential and undervalued transactions under Sections 43 and 45 of the Insolvency and Bankruptcy Code, emphasizing that the Resolution Professional's role ends upon approval of the Resolution Plan. Transactions in the ordinary course of business were deemed non-preferential, requiring supporting evidence beyond the auditor's report. The application was deemed not maintainable post-approval of the Resolution Plan, leading to its dismissal.

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Issues Involved:
1. Preferential and undervalued transactions under Section 43 and 45 of the Insolvency and Bankruptcy Code, 2016 (IBC).
2. Ordinary course of business exception under Section 43(2) and 43(3) of IBC.
3. Jurisdiction and maintainability of the application post-approval of the Resolution Plan.

Issue-wise Detailed Analysis:

1. Preferential and Undervalued Transactions under Section 43 and 45 of IBC:
The Resolution Professional (RP) filed an application under Section 43 and 45 of the IBC seeking directions for the Respondents to pay dues to the Corporate Debtor, identified as benefits received from the Corporate Debtor. The auditor's report suggested that a sum of Rs. 13,54,55,000/- was receivable from the Respondents under these sections. The Respondents contended that the transactions were conducted in the normal course of business, especially focusing on transportation and inter-company dealings. They argued that the transactions were not preferential but necessary for the Corporate Debtor's operations.

2. Ordinary Course of Business Exception under Section 43(2) and 43(3) of IBC:
Respondents argued that the transactions were made in the ordinary course of business, which should not be considered preferential as per Section 43(2) and 43(3) of IBC. They highlighted that transportation and inter-company transactions were routine and essential for the Corporate Debtor's business. The Tribunal noted that the auditor's report alone could not be considered conclusive proof without supporting material. It emphasized that transactions made in the ordinary course of business are exempt from being classified as preferential.

3. Jurisdiction and Maintainability of the Application Post-Approval of the Resolution Plan:
The Tribunal addressed the maintainability of the application, noting that the Resolution Plan had already been approved by the NCLT on 25.06.2021. The Tribunal referred to Section 23 of IBC, which states that the RP's role is to manage the Corporate Debtor's affairs during the Resolution Process and not thereafter. The Tribunal cited the High Court of Delhi's ruling in the case of M/s. Venus Recruiters Private Limited vs. Union of India and others, which held that the RP's mandate concludes with the approval of the Resolution Plan. The Tribunal concluded that the RP could not pursue the application post-approval of the Resolution Plan, and the application could not be entertained.

Conclusion:
The Tribunal dismissed the application, stating that the RP's role does not extend beyond the approval of the Resolution Plan. It emphasized that transactions made in the ordinary course of business are not deemed preferential and that the auditor's report alone is insufficient without supporting evidence. The application was dismissed on the grounds of maintainability and lack of jurisdiction post-approval of the Resolution Plan.

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