Transfer of assets among group companies not fraudulent under IBC. Appellant's appeal dismissed.

The Tribunal affirmed the decision of the Adjudicating Authority, ruling that the transfer of assets among group companies did not amount to fraudulent trading under Section 66(1) of IBC, 2016. The Appellant's arguments regarding fraudulent intentions and lack of consideration of documentary evidence were not substantiated, leading to the dismissal of the appeal without costs.

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Issues Involved:
1. Whether the transfer of assets within group companies constitutes 'fraudulent trading' under Section 66(1) of IBC, 2016.
2. Whether the transactions were conducted with fraudulent intentions to defraud creditors.
3. Whether the adjudicating authority erred in dismissing the application without considering the documentary evidence presented.

Summary:

Issue 1: Transfer of Assets Within Group Companies
The Adjudicating Authority observed that the transfer of assets within group companies does not per se constitute 'fraudulent trading' under Section 66(1) of IBC, 2016. The transaction appeared plausible as it occurred within the Regen Group, and the funds were provided by RPPL to the Corporate Debtor, which then provided them to the 3rd Respondent.

Issue 2: Fraudulent Intentions
The Appellant contended that the adjudicating authority ignored documented evidence such as sale deeds, bank statements, and financial statements indicating that the lands were purchased using the Corporate Debtor's funds but registered in the name of the 3rd Respondent. The Appellant argued that this transaction was not in the ordinary course of business and provided no profit or gain to the Corporate Debtor. However, the Adjudicating Authority found no merits in the allegations of fraud or dishonest intention on the part of the Respondents, as there was no substantial evidence to prove fraudulent trading.

Issue 3: Consideration of Documentary Evidence
The Appellant argued that the adjudicating authority failed to consider the overwhelming documentary evidence and accepted the unsubstantiated defense of the Respondents. The Appellant referred to various judgments to support the need for documentary proof in civil suits and the duty of the Resolution Professional to form an opinion and present evidence of fraudulent transactions. Despite these arguments, the Adjudicating Authority concluded that the Appellant had not established the aspect of fraud or dishonest intent to the satisfaction of the Tribunal.

Conclusion:
The Tribunal affirmed the decision of the Adjudicating Authority, stating that the transfer of assets among group companies did not constitute fraudulent trading under Section 66(1) of IBC, 2016. The Appellant failed to prove fraudulent intent or dishonest actions by the Respondents. Consequently, the appeal was dismissed without costs.

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