Tribunal upholds Impugned Order on preferential transactions, dismisses appeal under Insolvency and Bankruptcy Code

The Tribunal upheld the Impugned Order in an appeal under section 61 of the Insolvency and Bankruptcy Code, ruling that certain transactions were preferential under section 43 of the IBC. The Appellant's argument that the transactions were in the ordinary course of business was rejected, and they were directed to pay the specified amount to the corporate debtor with interest at 12% per annum. The appeal was dismissed for lack of merit, with the Tribunal emphasizing the legal provisions and lack of justification provided by the Appellant.

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Issues involved:
The appeal under section 61 of the Insolvency and Bankruptcy Code, 2016 against the Impugned Order in IA (IBC) 182/KOB/2022 passed by the Adjudicating Authority (NCLT, Kochi Bench).

Summary:

Background:
The Corporate Insolvency Resolution Process was initiated against the corporate debtor, leading to a forensic audit revealing certain transactions as preferential under section 43 of the IBC. The Liquidator filed an application seeking orders regarding these transactions.

Appellant's Argument:
The Appellant claimed that the transactions were in the ordinary course of business and not preferential. He highlighted the amounts due to him from the corporate debtor and the transfers made, arguing that they did not meet the criteria of section 43 of the IBC.

Legal Analysis:
The Tribunal examined the provisions of section 43 of the IBC, emphasizing the conditions for a transaction to be considered preferential. It noted the lack of clarity in the Appellant's explanations and concluded that the transactions in question fell within the definition of preferential transactions.

Decision:
The Tribunal upheld the Impugned Order, ruling that the transactions were preferential as per section 43 of the IBC. The Appellant was directed to pay the specified amount to the corporate debtor, with interest calculated at 12% per annum. The appeal was dismissed for lack of merit.

Conclusion:
The Tribunal found no reason to interfere with the Impugned Order, emphasizing the legal provisions and the lack of justification provided by the Appellant. The decision was made in line with the requirements of the IBC, and no costs were awarded in the matter.

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