AI Drafter 
TaxTMI 
TaxTMI 
2021 (2) TMI 1201
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....IRP) being the Applicant. 2. The Applicant was subsequently confirmed as the Resolution Professional (RP) by the Committee of Creditors of the Corporate Debtor (CD) under the relevant provisions of the Act on 07.03.2019. 3. It is also seen that paper publications were duly effected calling claims from the Creditors in Form 'A' in accordance with the provisions of IBC, 2016. The gravamen of the charge as against the 1st and 2nd Respondents in this Application is that the 2nd Respondent being the Director, whose powers stood suspended acting on behalf of the Corporate Debtor had executed a Sale Deed purportedly agreeing to transfer land to an extent of 99,456 sq.ft. belonging to the Corporate Debtor valued at Rs. 1,69,07,520/- by virtue of Sale Deed executed between the parties on 04.07.2018 and Registered as Doc. No. 1812/2018 on the file of the Office of the Sub - Registrar, SH128, Shankar Nagar, Sholinghur. The land is stated to have been situated as dealt within the Sale Deed dated 04.07.2018 at Pandyanallur Village, comprising of 68 vacant residential plots in the Survey Numbers contained in the schedule as given in the Sale Deed. The consideration for the sale is sta....
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....ting to effect the transfer by defrauding the other Creditors. 7. Taking into consideration the above transactions, the following reliefs have been sought by the Applicant / RP :- 1. Declare the said transfer, executed by way of Sale Deed dated 04-JUL-2018 registered as Document bearing No. 1812 of 2018 on the file of Office of the Sub - Registrar, SH128, Shankar Nagar, Sholingur, Tamil Nadu 631102 as evidenced by the copy of the said document found in Annexure 2, executed on behalf of the CD by the 2nd Respondent, as granting preference to the 1st Respondent and thus being in contravention to Section 45 (1) of the Code. 2. Set aside the said transfer, executed by way of the aforesaid Sale Deed dated 04-JUL-2018 registered as Document bearing No. 1812 of 2018 in favour of the 1st Respondent, as aforesaid and require the property (ies) so transferred to vest in the Corporate Debtor and thus restore position as it existed before such transfer as if the transaction (s) has not been entered into. 3. Declare that the 1st Respondent has no right, title or interest in the subject matter property, consequently. 4. Direct the 1st Respondent to surrende....
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.... be given the colour as such by the Resolution Professional / Applicant. d) Even on facts it is contended that since the Corporate Debtor was in need of raw materials to run its operations and was not having the liquidity to even pay wages to its workmen and faced with the consequences of the unit of the Corporate Debtor being closed and since the same would have proved disastrous at the relevant point, transaction was undertaken in the course of business activities and to run the day to day affairs of the Corporate Debtor. e) There is no preference in the transaction as between the Corporate Debtor and the 1st Respondent as the payment due to the 1st Respondent was settled in due course of business activities of the 1st Respondent which was in subsistence from 01.04.2018. f) Further it is contended that no benefit has been received by the 1st Respondent as a recipient viz., the 1st Respondent has received only as per its entitlement by virtue of the transaction and by transferring the parcel of land, the Corporate Debtor had only settled its liability against Respondent No.1 and did not extend any undue benefit to it. No material has been shown by t....
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....n. The initial recital portion mentions clearly that there is an outstanding amount payable by the Corporate Debtor to the 1st Respondent, to the extent of Rs. 1,69,39,541/- and that since the Corporate Debtor had expressed its inability to settle the dues owing to unfavourable market conditions and the Corporate Debtor also being in possession of an unencumbered land had offered the same for a consideration of Rs. 1,69,39,541/- with a view to settle the dues of the 1st Respondent. The extent of land as given therein is to the extent of 99,456 sq.ft. The schedule to the Sale Deed consists the following details viz., SCHEDULE Sl. No. Plot No. Area (Sq. Ft.) 1 243 2427 2 244 1200 3 245 1200 4 246 2400 5 247 3503 6 248 1625 7 249 1614 8 250 1563 9 251 1527 10 252 1502 11 253 1461 12 254 1424 13 255 1387 14 256 1780 15 257 1116 16 258 1200 17 259 1200 18 260 1200 19 261 1200 20 262 1200 21 263 1200 22 264 2400 23 272 1200 24 273 1824 25....
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....il Appeal Nos.9357-77 of 2019. 17. After a detailed discussion by the Hon'ble Supreme Court of India in relation to the provisions of Section 43 of IBC, 2016 the following has been culled out at Paragraph No.28.1 for the benefit of the Resolution Professional as well as for the benefit of this Authority to ascertain a transaction as preferential which reads as follows:- 28.1. Looking to the legal fictions created by Section 43 and looking to the duties and responsibilities per Section 25, in our view, for the purpose of application of Section 43 of the Code in any insolvency resolution process, what a resolution professional is ordinarily required to do could be illustrated as follows: 1. In the first place, the resolution professional shall have to take two major but distinct steps. One shall be of sifting through the entire cargo of transactions relating to the property or an interest thereof of the corporate debtor backwards from the date of commencement of insolvency and up to the preceding two years. The other distinct step shall be of identifying the persons involved in such transactions and of putting them in two categories; one being of the persons who ....
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....eference, will have to pass through another filtration to find if it does not answer to either of the clauses (a) and (b) of sub-section (3) of Section 43. After the resolution professional has carried out the aforesaid volumetric as also gravimetric analysis of the transactions on the defined coordinates, he shall be required to apply to the Adjudicating Authority for necessary order/s in relation to the transaction/s that had passed through all the positive tests of sub-section (4) and sub-section (2) as also negative test of sub-section (3). 18. Adverting to the steps as given above by the Hon'ble Supreme Court of India to ascertain whether the transaction is a preferential one or otherwise it is evident that the Applicant has not made any plea in relation to the 1st Respondent to be a related party other than stating that the Transaction is as between the Respondents who have colluded. 19. Coming to Step 2, in the absence of the 1st Respondent being the related party to the Corporate Debtor the sunset phase provided under the provisions of IBC, 2016 is of one year prior to the date of initiation of the CIRP. 20. Proceeding to Step No.3, it is evident from the Sale....
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....s provisional 55,05,300 55,05,300 (b) (i) Workmen dues for 24 months 2,11,23,139 68,64,128 (b) (ii) Secured Creditors 59,86,33,405 19,45,30,572 (c) Employee dues for 12 months 0 0 (d) Financial Debts of Unsecured Creditors 2,37,10,120 0 (e ) Statutory Creditors 33,91,657 0 (f) Operational Creditors 5,24,96,338 0 24. Thus it is seen that despite Secured Financial Creditors who gain precedence over the Operational Creditors over the category under which the 1st Respondent falls, a preference seems to have been given to the 1st Respondent thereby prejudicing the interest of the other Creditors who either have precedence in relation to the claim being settled much ahead of the 1st Respondent or even in relation to the other Operational Creditors who are similarly placed like the 1st Respondent. 25. In relation to the sixth step as prescribed by the Hon'ble Supreme Court of India as to whether it will pass through the filtrations to find if it does not answer to either clauses (a) and (b) of Sub Section 3 of Section 43, the Hon'ble Supreme Court of India has given a vital guideline as to how the same is ....