Sanjay Gupta Liquidator Vandana ... vs Prahlad Agarwal And Others
- CitationCompany Appeal (AT) (Insolvency) No. 1447 of 2022
Ratio decidendi
The rule this decision rests on
Under Section 45(2) of the Insolvency and Bankruptcy Code, 2016, the extended look-back period for transactions with a related party is measured back from the initiation of the corporate insolvency resolution process; where the impugned transactions fall outside even the two-year period so measured, they cannot be avoided under Section 43 or Section 45. Whether a transaction is fraudulent under Section 66 is a question of merits to be decided by examining each transaction; where the Adjudicating Authority, on such examination, finds the transactions to have been in the ordinary course of business, that finding stands and an appellate body will not disturb it absent a different view on the merits. The non-joinder of parties alleged to have benefited from transactions is not a ground that by itself vitiates an adjudication where the decision rests on an independent examination of the merits; the Tribunal expressed no concluding view on whether joinder was necessary.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Sanjay Gupta Liquidator Vandana Vidhyut Ltd. ...Appellant
Versus
Prahlad Agarwal & Ors. ...Respondents
Present: For Appellants: Mr. Dhananjaya Sud, Mr. Aditya Gauri, Mr. Amar Vivek, Mr. Shalya Agarwal, Ms. Damini Srestha, Mr. Chaitanya Bansal and Mr. Abhinav Tyagi, Advocates. For Respondents: Mr. Kunal Godhwani, Advocate for R-1. Mr. Akshat Singh, Mr. Bhanu, Gupta, Mr. Dacchita Shahi and Mr. Utkarsh Kandpal, Advocates for R- 5.
ORDER
13.01.2023: Heard learned counsel for the Appellant. This Appeal has
been filed against the order dated 26.09.2022 by which order the Adjudicating
Authority has rejected application filed by the Appellant under Section 43,45
and 66 of the I&B Code.
2. Learned counsel for the Appellant submits that with regard to
transactions under Section 43 and 45 there was transactions with one related
party, hence, in accordance with Section 45(2) the look back period ought to
have been 2 years, whereas, Adjudicating Authority has treated the period as
one year only. He further submits that with regard to fraudulent transactions
Cont'd.../ 2
the Adjudicating Authority committed error in observing that those entities
who were benefited ought to be impleaded, whereas impleadment was not
necessary.
3. We have considered the submission of learned counsel for the parties
and perused the record. Insofar as transaction under Section 43 and 45 are
concerned, even if look back period of two years is taken, admittedly, the
transactions were held two years before the initiation of CIRP. The CIRP was
initiated on 26.04.2018 and transactions were held in March, 2016, hence
they were not covered by Section 43.
4. Insofar as fraudulent transactions are concerned, the Adjudicating
Authority has considered the said submission on merits, examined each
transaction and with regard to said transaction the Adjudicating Authority has
stated that those transactions were in the natural course of business and it
cannot be said that there was any fraudulent transaction.
5. Insofar as submission of learned counsel for the Appellant regarding
observation of the Adjudicating Authority that parties who are benefited
because of the fraudulent transactions having not been brought on the record,
suffice it to say that the Adjudicating Authority has not based its decision
solely on the said observation rather examined the merits of transaction for
coming to the conclusion that the transactions were not fraudulent
transactions. The Adjudicating Authority in detail have considered the said
issue from Para 19 to para 30.
Company Appeal (AT) (Insolvency) No. 1447 of 2022 3
6. We are of the view that no different opinion can be taken with regard to
findings on merits and for the purpose of this case it is not necessary to give
any concluding opinion with regard to joinder of parties. With above
observations, Appeal is dismissed.
[Justice Ashok Bhushan] Chairperson
[Barun Mitra] Member (Technical) Archana/nn
Company Appeal (AT) (Insolvency) No. 1447 of 2022
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