TaxTMI 
TaxTMI 
2020 (3) TMI 1208
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....Gupta , For the Respondent : Nakul Mohta and Johnson Subba JUDGMENT SUDHANSU JYOTI MUKHOPADHAYA J. (CHAIRPERSON). - 1. In both the appeals as common impugned order dated August 6, 2018 is under challenge and common question of law being involved, they were heard together and disposed of by this common judgment. 2. In the "corporate insolvency resolution process" against "Monnet Ispat and Energy Ltd." ("corporate debtor"), the "resolution professional" filed miscellaneous application under sections 43 and 44 of the Insolvency and Bankruptcy Code, 2016 ("I and B Code" for short) against appellants-"Excello Fin Lea Ltd." and "Tirumala Balaji Alloys P. Ltd." for refund of Rs. 23,48,40,274 from "Excello Fin Lea Ltd." and for refun....
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....debtor" was facing financial stress for some years, the lenders implemented the SDR in the "corporate debtor" in August, 2015 and converted Rs. 350 crores of their dues into equity to hold 51 per cent. equity (controlling stake) in the "corporate debtor". Owing to the heavy financial stress, the "corporate debtor" was unable to source funds from its existing lenders, as the lenders did not provide any additional line of credit, for the purpose of meeting its financial obligations including working capital requirements. 6. According to learned counsel for the appellants, the transactions, in question, were made during the usual course of business and do not fall within the meaning of "preferential transactions". Reliance has been placed o....
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....nd B Code". The transactions which were made between the parties and reflected in the records of the "corporate debtor" shows that the "corporate debtor" availed loan of Rs. 23 crores at an interest rate of 18 per cent. per annum from "Excello Fin Lea Ltd." and Rs. 5 crores at an interest rate of 15 per cent. per annum from "Tirumala Balaji Alloys P. Ltd.". The amounts were reflected in the bank accounts as under : "Excello Fin Lea Ltd." Date Bank account number of corporate debtor Bank name Type of -account Received 5-10-2016 2554002100002680 PNB RPR (Punjab National Bank, Raipur) Current Account 7,50,00,000 5-10-2016 2554002100002680 PNB RPR (Punjab National Bank Current Account 7,50,0....
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.... 37,60,274 21-3-2017 65254133186 SBI (erstwhile SBOP) Current Account 3,00,00,000 31-3-2017 65254133186 SBI (erstwhile SBOP) Current Account 10,80,000 Total 23,48,40,274 12. As to "Tirumala Balaji Alloys P. Ltd." loan, the records of the "corporate debtor" discloses that repayment was made to "Tirumala Balaji Alloys P. Ltd." on July 11, 2016, July 13, 2016, October 28, 2016, March 31, 2017, as mentioned below : "Tirumala Balaji Alloys Pvt. Ltd." Date Bank account number of corporate debtor Bank name Type of -account Received 11-7-2016 65254133186 SBI (erstwhile SBOP) Current Account 34,38,081 13-7-2016 65254133186 SBI (erstwhile ....
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.... down in subsection (2) to any persons as referred to in sub-section (4), he shall apply to the Adjudicating Authority for avoidance of preferential transactions and for, one or more of the orders referred to in section 44. (2) A corporate debtor shall be deemed to have given a preference, if- (a) there is a transfer of property or an interest thereof of the cor porate debtor for the benefit of a creditor or a surety or a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the corporate debtor ; and (b) the transfer under clause (a) has the effect of putting such creditor or a surety or a guarantor in a beneficial position than it would have been in the even....
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.... 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 commence ment date." 16. From the aforesaid provisions, it is clear that if there is a transfer of property or an interest thereof of the "corporate debtor" for the benefit of a creditor or a surety or a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the "corporate de....