IndusInd Bank Ltd. & Ors. vs Vamsee Teja Modern Rice Mill Pvt. Ltd. - In view of the foregoing, we find that the adjustment of the Corporate Debtor’s receivables from M/s. Tammana Trading Company against the liabilities due to the Respondent-directors had the effect of reducing/extinguishing their antecedent liabilities and correspondingly diminishing the receivables of the Corporate Debtor. The transactions therefore, require to be examined as preferential transactions within the meaning of Section 43 of the Code.

 NCLT Amaravati (2026.08.31) in IndusInd Bank Ltd. & Ors. vs Vamsee Teja Modern Rice Mill Pvt. Ltd. [(2026) ibclaw.in 3488 NCLT, IA(IBC)/199/2026 in IA(IBC)(LIQ)/2/2026 with IA(IBC)/200/2026 in IA(IBC)(LIQ)/2/2026 in CP(IB)/45/7/AMR/2023] held that; 

• In view of the foregoing, we find that the adjustment of the Corporate Debtor’s receivables from M/s. Tammana Trading Company against the liabilities due to the Respondent-directors had the effect of reducing/extinguishing their antecedent liabilities and correspondingly diminishing the receivables of the Corporate Debtor. The transactions therefore, require to be examined as preferential transactions within the meaning of Section 43 of the Code.

Blogger’s comments; It is pertinent to refer to Regulation 28 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (“CIRP Regulations”), which expressly recognises assignment/transfer of debt due to a creditor during the CIRP period.

Regulation 28 – Transfer of debt due to creditors
(1) In the event a creditor assigns or transfers the debt due to such creditor to any other person during the insolvency resolution process period, both parties shall, within seven days of such assignment or transfer, provide the interim resolution professional or the resolution professional, as the case may be, the terms of such assignment or transfer and the identity of the assignee or transferee.
(2) The resolution professional shall notify each participant and the Adjudicating Authority of any resultant change in the committee within two days of such change.

In light of the above, a clear distinction must be drawn between the following two categories of transactions:

1. Transfer/assignment of debt due to a creditor, initiated at the instance of the creditor

• Here, the creditor (assignor) transfers its claim against the corporate debtor to an assignee/transferee.

• Such assignment is expressly contemplated under Regulation 28 of the CIRP Regulations.

• Since this is a transfer of the creditor’s right to receive payment (and not a transfer of the corporate debtor’s property), it does not, by itself, constitute a “preferential transaction” under Section 43 of the IBC.

2. Transfer of assets/receivables by the corporate debtor to creditors (against antecedent liabilities of directors/others), without creditor assignment/transfer instruments

• In this scenario, the corporate debtor transfers its own property (e.g., receivables/assets) to one or more creditors, typically in discharge or adjustment of antecedent debts/liabilities.

• Such a transaction squarely engages the avoidance regime under Section 43 of the IBC, as it involves: (a) a transfer of property or an interest thereof of the corporate debtor; (b) for the benefit of a creditor (or surety/guarantor); (c) for or on account of an antecedent financial/operational debt or other liability; and (d) having the effect of putting that creditor in a more beneficial position than would result under the waterfall in Section 53.

• The absence of formal assignment/transfer letters from creditors further indicates that the transaction is not a Regulation 28 debt-assignment, but rather a corporate-debtor-side transfer susceptible to characterization as a preferential transaction (subject to the “relevant time” and other statutory conditions).

Accordingly, while creditor-initiated debt assignments are regulatory-recognized and do not per se amount to preferences, transfers of the corporate debtor’s assets/receivables to creditors against antecedent liabilities—particularly without proper creditor assignment documentation—fall within the contemplation of Section 43 and may be avoidable as preferential transactions.

Excerpts of the order;

This Interlocutory Application (hereinafter referred to as the “IA” or “IA 199/2026”) has been filed on 11.05.2026 vide Diary No.825, by Mr. Kambhammettu Sri Vamsi, Liquidator (hereinafter referred to as the “Applicant” or the “Liquidator”) of Vamsee Teja Modern Rice Mill Private Limited (hereinafter referred to as the “Corporate Debtor”), under Sections 43 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the “IBC” or “Code”), seeking the following reliefs:

• (i) Declare and hold that the transactions detailed in the present IA constitute preferential transactions within the meaning of Section 43 of the Code;

• (ii) Pass appropriate orders under Section 43 of the Code, directing Respondent Nos. 1 and 2 to restore and/ or repay to the Corporate Debtor the amounts received by them under the preferential transactions, aggregating to Rs.2,10,39,546/-, along with such interest, as this Adjudicating Authority may deem fit;

• (iii) Direct Respondent Nos. 1 and 2 to return the benefits derived by them from the preferential transactions and to restore the same in the Corporate Debtor for the benefit of its creditors.

• (iv) Pass such other or further orders as this Adjudicating Authority may deem fit and proper in the facts and circumstances of the present case.

# 2. The facts of the case, as submitted by the Counsel of the Applicant are as below:

(i) The Corporate Debtor was admitted into Corporate Insolvency Resolution Process (hereinafter referred to as the “CIRP”) by this Adjudicating Authority vide order dated 03.06.2025 in CP (IB)/45/7/AMR/2023, wherein the Applicant was appointed as the Interim Resolution Professional (hereinafter referred to as the “IRP”).

(ii) Subsequently, the Committee of Creditors (hereinafter referred to as the “CoC”) consisting of the sole Financial Creditor-Induslnd Bank Ltd. in its first meeting held on 03.07.2025 resolved with 100% voting and confirmed the IRP as Resolution Professional (hereinafter referred to as the “RP”) for conducting the CIRP proceedings of Corporate Debtor, which was also approved by this Adjudicating Authority vide its Order dated 28.07.2025.

(iii) During the CIRP, the Applicant formed an opinion was formed under Regulation 35A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter referred to as the “CIRP Regulations”) regarding the existence of transactions falling within Sections 43, 45, 50 or 66 of the Code, pursuant to which M/s. Mahadevan & Co., Chartered Accountants, were appointed as Transaction Auditor. A draft report was received on 20.11.2025 and was placed before the 5th meeting of the Committee of Creditors held on 21.11.2025. The CoC thereafter approved filing of the PUFE application.

(iv) The CIRP ultimately culminated in liquidation, as the CoC did not approve continuation of the CIRP and resolved for commencement of liquidation. This Adjudicating Authority, vide order dated 11.02.2026, allowed the liquidation application and appointed the Applicant as the Liquidator.

(v) The final Transaction Audit Report dated 28.11.2025 was received on 05.03.2026, and two transactions were identified as preferential transactions under Section 43(2) of the Code, both the transactions by the Corporate Debtor with related party during the period of two years preceding of Insolvency commencement date, i.e., 03.06.2025, the details of the transactions are below:

Name of Respondent	Amount in (Rs.)
N. Udaya Durga, Director and Shareholder	19,92,733.41
N.V. Satya Narayana, Director and Shareholder	1,90,46,813.92
Total	2,10,39,547.33

(vi) The Corporate Debtor had passed adjustment entries in favour of its related parties, whereby certain current assets were set off against corresponding liabilities through journal vouchers, without any actual inflow of funds. During the audit, these entries were brought to the notice of the suspended directors, however, no response was received from them.

(vii) The Journal Register of the CD as on 01.04.2024 placed on record at page no.141 of the application corroborates that on 01.04.2024, Journal Vch No.12 recorded an adjustment of Rs.1,90,46,813.92 in the account of N.V. Satyanarayana (US) against Tammana Trading Company, and Journal Vch.No.13 recorded an adjustment of Rs.19,92,733.41 in the account of N. Udaya Durga (US) against Tammana Trading Company.

(viii) The Amount receivables from Tammana Trading Company ought to have been recovered by the Corporate Debtor and utilised towards discharge of its secured/ financial creditors, particularly when the receivables and current assets were charged in favour of the Financial Creditor. Instead of recovery of such receivables and utilisation thereof for the benefit of the creditors, the same were adjusted towards liabilities payable to the directors, who are related parties. The Applicant therefore contends that the aforesaid transactions fall within the ambit of Section 43 of the Code.

# 3. The Respondent Nos.1 and 2 have filed their Counter vide Diary No. 1565 and 1562 both dated 18.08.2026 respectively.

# 4. During the course of hearing, the Counsel appearing for Respondent Nos.1 and 2, while reiterating the averments in the Counter Affidavit, submitted that the present Application is misconceived and that the Applicant has failed to independently establish the essential ingredients of Section 43 of the Code, merely relying upon the Transaction Audit Report, which is only an opinion of the Transaction Auditor. It is contended that the impugned transactions are merely journal/ adjustment entries without any actual inflow or transfer of money or property of the Corporate Debtor and that there is no material to show that the Respondents were placed in a more beneficial position under Section 53 of the Code. It is further contended that the adjustments were made in the ordinary course of business and that the Applicant has failed to establish the relevant circumstances so as to attract Section 43(4). It is also contended that Tammana Trading Company, being the third party in respect of whose the alleged adjustments of receivables were made, has not been impleaded as a party and, therefore, the alleged receivables and their adjustment cannot be conclusively determined in its absence. Reliance has been placed on the judgment of the Hon’ble Supreme Court in Anuj Jain, IRP for Jaypee Infratech Ltd. v. Axis Bank Ltd.. The Respondents also raised objections regarding delay and non-compliance with Regulation 35A and submitted that the liabilities attributable to Respondent Nos.1 and 2 are distinct and no consolidated or joint liability can be fastened upon them.

# 5. The Counsel for the Applicant/ Liquidator submitted that the Applicant had formed an opinion in terms of Regulation 35A of the CIRP Regulations and the same is also mentioned in the IA and thereafter, after approval of the CoC in its 5th meeting of the held on 21.11.2025, filed the present IA. It is submitted that the transactions dated 01.04.2024 fall within the two-year look-back period prescribed under Section 43(4)(a), the insolvency commencement date being 03.06.2025. The Journal Register also records the corresponding adjustment entries of Rs.19,92,733.41 and Rs.1,90,46,813.92 in the accounts of Respondent Nos.1 and 2 respectively, which places the Respondent Nos.1 and 2 in a beneficial position under section 53 of the Code.

# 6. We have considered the rival submissions and perused carefully the IA and Counter Affidavit and other documents placed on record.

# 7. As regards the objection of delay and non-compliance with Regulation 35A, the Applicant has explained the chronology leading to the filing of the present Application after receipt and consideration of the final Transaction Audit Report. Having regard to the facts and circumstances of the case, we find no sufficient ground to reject the Application on that count. In the present case, the Applicant has explained the circumstances leading to the filing of the Application after consideration of the Transaction Audit Report.

# 8. Before examining the impugned transactions, it is appropriate to note that Section 43 requires the Applicant to establish the transfer of property or interest of the Corporate Debtor for the benefit of a creditor on account of an antecedent liability, the resulting beneficial position visà-vis Section 53, the relevant period under Section 43(4), and the absence of any exclusion under Section 43(3). These requirements are required to be examined cumulatively in terms of the judgment of the Hon’ble Supreme Court in Anuj Jain, IRP for Jaypee Infratech Ltd. (Supra).

# 9. In the present case, Respondent Nos. 1 and 2 are directors/ shareholders of the Corporate Debtor. The Transaction Audit Report identifies the two transactions as preferential transactions and records that the unsecured loans payable to the Respondent-directors were set off against the receivables from M/s. Tammana Trading Company through journal vouchers. The Journal Register independently records the corresponding entries dated 01.04.2024.

# 10. The contention that there was no actual cash payment and that the transactions were only journal entries cannot, by itself, take the transactions outside the scope of Section 43. What requires consideration is the effect of the adjustment. The material on record indicates that the Corporate Debtor’s receivables from Tammana Trading Company were adjusted against the liabilities payable to the Respondent-directors, thereby reducing the liabilities owed to them while correspondingly diminishing the receivables of the Corporate Debtor.

# 11. The objection regarding non-impleadment of M/s. Tammana Trading Company does not affect the present Application, as no relief is sought against it. The issue is only whether the Corporate Debtor’s receivables were adjusted against the liabilities of the Respondent/directors, thereby benefiting them. As held by the Hon’ble Supreme Court in Anuj Jain, IRP for Jaypee Infratech Ltd (Supra), the enquiry under Section 43 focuses on the transfer of the Corporate Debtor’s property or interest for the benefit of a creditor and the resulting beneficial position. Hence, non-impleadment of Tammana Trading Company does not prevent determination of the preferential nature of the impugned transactions.

# 12. The plea of ordinary course of business also cannot be accepted merely on a general assertion. The impugned transactions concern adjustment of the Corporate Debtor’s receivables against liabilities owed to its own directors/shareholders. No sufficient material has been placed to establish that such specific adjustment was made in the ordinary course of the business or financial affairs of both the Corporate Debtor and the transferees. The ordinary-course exclusion under Section 43(3) has to be examined with reference to the particular transaction and circumstances.

# 13. The impugned entries dated 01.04.2024 fall within the two-year period preceding the insolvency commencement date of 03.06.2025, as contemplated under Section 43(4)(a). Further, the adjustment was made against amounts stated to be payable to Respondent Nos.1 and 2, thereby meeting the requirement of an antecedent liability under Section 43(2)(a).

# 14. In view of the foregoing, we find that the adjustment of the Corporate Debtor’s receivables from M/s. Tammana Trading Company against the liabilities due to the Respondent-directors had the effect of reducing/extinguishing their antecedent liabilities and correspondingly diminishing the receivables of the Corporate Debtor. The transactions therefore, require to be examined as preferential transactions within the meaning of Section 43 of the Code.

# 15. The present case is distinguishable from a mere intra-group journal adjustment undertaken as part of an established and undisputed commercial arrangement. Here, the impugned entries concern liabilities of the Corporate Debtor towards its own directors and the corresponding reduction of receivables from Tammana Trading Company. The record before us does not establish that the particular adjustments were undertaken as part of an ordinary, undistinguished flow of business.

# 16. We therefore hold that the two transactions dated 01.04.2024, amounting to Rs.19,92,733.41 in favour of Respondent No.1 and Rs.1,90,46,813.92 in favour of Respondent No.2, satisfy the ingredients of Section 43 of the Code and constitute preferential transactions.

# 17. Consequently, the benefit obtained by Respondent Nos.1 and 2 through the aforesaid preferential transactions is liable to be restored to the liquidation estate in terms of Section 44 of the Code. Section 44 empowers the Adjudicating Authority, inter alia, to require a person to pay to the Liquidator such sums in respect of benefits received by him from the Corporate Debtor.

# 18. At the same time, we find merit in the submission of Respondent No.1 that the liabilities attributable to Respondent Nos.1 and 2 are distinct. Therefore, the liability of each Respondent shall be confined to the amount specifically attributable to such Respondent and they shall not be jointly or severally saddled with the amount attributable to the other Respondent merely because the aggregate amount is claimed in the Application.

# 19. Accordingly, Respondent No.1, Nookala Udaya Durga, is liable to restore/ pay a sum of Rs.19,92,733.41 to the Liquidator for being credited to the liquidation estate of the Corporate Debtor, and Respondent No.2, Nukla Venkata Satyanarayana, is liable to restore/pay a sum of Rs.1,90,46,813.92 to the Liquidator.

# 20. In view of the above discussion, IA (IBC)/199/2026 is allowed in the following terms:

• a) The transaction of Rs.19,92,733.41 recorded in the account of Respondent No.1 on 01.04.2024 and the transaction of Rs.1,90,46,813.92 recorded in the account of Respondent No.2 on 01.04.2024 are hereby declared to be preferential transactions within the meaning of Section 43 of the Insolvency and Bankruptcy Code, 2016.

• b) Respondent No.1, Nookala Udaya Durga, is directed under Section 44 of the Code to pay/restore Rs.19,92,733.41 to the Liquidator within 15 days from the date of receipt of this order and file a compliance memo within 30 days from the date of this order.

• c) Respondent No.2, Nukla/Nukala Venkata Satyanarayana, is directed under Section 44 of the Code to pay/restore Rs.1,90,46,813.92 to the Liquidator within 15 days from the date of receipt of this order and file a compliance memo within 30 days from the date of this order.

• d) The amounts so realised shall form part of the liquidation estate of the Corporate Debtor and shall be dealt with by the Liquidator in accordance with the provisions of the Code.

• e) The liability of each Respondent shall remain confined to the amount specifically attributable to him/her as stated above.

• f) The Liquidator shall report the compliance of the above directions by way of a memo within 45 days of this order in the main CP.

# 21. IA (IBC)/199/2026 is accordingly allowed and disposed of in the above terms. No order as to costs.

IA(IBC)/200/2026:

The counsel for both the parties sought two weeks’ time to submit their arguments. Time, as prayed for, is granted. List the matter for hearing on 18.09.2026.

--------------------------------------------------

Kamal Agarwal, Resolution Professional vs Gautam Saha & Ors. - Therefore, in view of lack of concrete evidence with respect to the impugned transactions being preferential under Section 43, IBC, 2016, this Tribunal holds this application devoid of merits.

  NCLT Guwahati (2024.07.02) in  Kamal Agarwal, Resolution Professional vs Gautam Saha & Ors.. [IA (IBC)/11/GB/2022, IA (IBC)/17/GB/2022 In CP (IB)/3/GB/2020] held that;

• Obviously, if the transactions in question are to fall squarely within the mischief of Section 43, they must satisfy all the specifications and ingredients of sub-sections (2) and (4) of Section 43 and ought not to be within the exclusion provided in subsection (3) thereof.

• The Ex-RP has been  unsuccessful in showcasing the transactions referred to by him, as preferential by way  of tangible and appreciable evidence.

• Furthermore, the burden of proof for proving avoidance transactions lies on the Applicant and in the present case, Ex-RP himself has been deficient in  demonstrating the transactions in question as preferential, leaving a doubt in the mind  of this Bench with regards to the preferential nature of the transactions in question.

• Therefore, in view of lack of concrete evidence with respect to the impugned  transactions being preferential under Section 43, IBC, 2016, this Tribunal holds this  application devoid of merits.

Excerpts of the Order; 

1. This Interlocutory Application i.e., IA (IBC)/11/GB/2022 has been filed under Section 43 of the Insolvency and Bankruptcy Code, 2016 read with rule 11 of the NCLT rules, 2016 praying for the following relief - 

• a. Pass an order requiring the Respondent No 1 (Gautam Saha) to pay Rs. 36,87,164/- (Rs. Thirty-Six Lakhs Eighty-Seven Thousands One Hundred and Sixty Four) back in the account of the Corporate Debtor; 

• b. Pass an order requiring the Respondent No 2 (Abhijit Dutta) to pay Rs. 21,15,500/- (Rs. Twenty One Lakhs Fifteen Thousands Five hundred) back in the account of the Corporate Debtor; 

• C. Pass an order on the preferential transactions identified by the Respondent No 4 (Transaction Auditor) as this Tribunal may deem fit and proper. 

# 2. The relevant submissions of the Applicant made vide their Petition, Rejoinder and 

Written Notes are extracted hereunder: 

2.1  This Tribunal vide order dated 09.12.2020, allowed the application bearing  IA(IBC)/64/GB/2020 in CP(IB)/3/GB/2020, for the appointment of the  Applicant, Mr. Kamal Agarwal as the RP of the Corporate Debtor replacing  Mr. Amit Pareek, IRP. 

2.2. The suspended directors failed to provide all the information as was required by the Resolution Professional including the consolidated Tally Data for 31.03.2019 and up to the Insolvency Commencement Date and therefore an application under Section 19(2) of the Code was also filed vide IA 40 of 2021. Based upon the limited information provided by the suspended directors, the transaction auditor has prepared and submitted his report and identified preferential transactions to the tune of Rs 80,17,701/-. The Transaction Auditor in his reports has identified the following transaction to be preferential which is detailed in observation no 32, 34, 35, 36, 37, 38, 39 and 4A and is 

listed below:- 

Observation No.	Nature of Transaction	Amount involved
32	Share of Loss of the corporate debtor in Potential & Concept Educations for F/Y  2018-2019	7,31,579/-
34	Amount paid by Potential & Concept Educations to Abhijit Dutta (Respondent no 2)	10,58,132/ -
35	Amount paid by Potential & Concept Educations to Gautam Saha (Respondent no 1)	14,60,413/-
36	Amount paid by Potential & Concept  Educations to Champalal Bothra (landlord of  Bongaigaon Centre)	9,72,000/-
37	Amount paid by Potential & Concept Educations to Ms Sayera/ Sayena Islam  (landlord of Christian Basti Centre)	11,31,300/-
38	Amount paid by Potential & Concept Educations to M/s Sukchaya (landlord of  Maligaon Centre)	18,63,277 /-
39	Amount paid by Potential & Concept Educations to Mr. Netai Prasad Mazumdar & Ms Shobhana Mazumdar (joint landlord of Silchar Centre)	2,16,000/-
40	Amount paid by Potential & Concept  Educations to M/s Rotary Club (landlord of  Shivsagar Centre)	5,85,000/-
	(Rs Eighty Lakh Seventeen Thousands Seven Hundred and One)	80,17,701/-

2.3. The Applicant sought clarifications from the Respondent no. 4 regarding how  the above-listed transactions are preferential in nature and covered within the  purview of section 43 of the Code, vide e-mail dated 17.01.2022. However, no  reply has been received from the transaction auditor till date and hence, he was  also made a party to this matter. 

2.4. The Applicant has identified the following transactions amounting to Rs.  58,02,664 (Fifty-Eight Lakh Two Thousand Six Hundred and Sixty-Four) to  be preferential within the meaning of section 43 of the Code - 

SI. No.	Nature of Transaction	Amount Involved	Look Back Period
1	Amount paid to Respondent no. 1(Gautam Saha) from 27.42.2018 to 26.02.2020 (Related Party of the Corporate Debtor)	25,24,200/	Two Years Preceding the Insolvency  Commencement date.
2	Amount paid to Respondent no. 2(Abhijit Dutta) from 27.02.2018 to  26.02.2020. (Related Party of the Corporate Debtor)	11,00,000/	Two Years Preceding the Insolvency  Commencement date.
3	Amount paid by corporate debtor to  Respondent no. 1 from the account of - partnership firm   "Potential & Concept Educations"  from 01.02.2019 till 17.09.2019	11,62,964/	Two Years Preceding the Insolvency  Commencement date
4	Amount paid by the corporate debtor to Respondent no. 2 from the account of partnership firm "Potential & Concept Educations" from 01.02.2019 till 17.09.2019	10,15,500/	Two Years Preceding the Insolvency  Commencement date
	Total	58,02,664/
	Rs. Fifty-Eight Lakh Two Thousand Six Hundred and Sixty Four

2.5  Out of 58,02,664/- the respondent no. 1 is beneficiary of Rs 36,87,164/- (Rs. Thirty-Six Lakh Eighty Seven Thousands One Hundred and Sixty Four) and the respondent no 2 is beneficiary of Rs 21,15,500/- (Rs Twenty One Lakh Fifteen Thousand and Five Hundred). The same is supported by the ledger accounts prepared from the bank statements obtained by the applicant. 

2.6. Respondent no. 1 and 2 are also the surety/ guarantor for loans advanced to the Corporate Debtor and are the shareholders of the Corporate Debtor holding 50% Equity Shares (4000 equity shares) each in the Respondent corporate debtor. 

2.7. The abovementioned transfer of funds as detailed has the effect of putting the  beneficiaries in a beneficial position than it would have been in the event of a  distribution of assets being made in accordance with Section 53. 

2.8. Originally, under the Deed of Partnership dated 01.02.2019, the partnership firm "Potential and Concept Educations" was constituted with the Corporate Debtor and the Respondent no. 3, Potential Coaching Institute Private Limited, as its partner with 50% share each. The Partnership stood reconstituted vide deed of agreement dated 19.09.2019, whereby, the Corporate Debtor is retired from the partnership and the spouses of the suspended directors are made partners. 

2.9. Respondent no. 3 was made a party to the present application as it is the partner of the Corporate Debtor and may assist this Tribunal by providing the Tally data or any other software in which the accounts of the partnership firm "Potential & Concept Educations" are maintained since its inception (i.e., 01.02.2019) along with audited financials from 01.04.2019 onwards. 

2.10.The timelines under Regulation 35A of CIRP Regulations 2016 are only directory in nature and cannot benefit the wrong doer as has been clarified by Hon'ble NCLAT in CA(AT) INS no 583 of 2021 in the matter of Aditya Kumar Tibrewal as well as Hon'ble Delhi High Court in LPA 7/2021 in the matter of Tata Steel BSL Ltd. v. Venus Recruiters Pvt Ltd. 

# 3. Respondent No. 1 and 2 vide their reply and written submissions have contended that: 

3.1. In the instant case, insolvency commencement date is 26.02.2020. As per Regulation 35A of CIRP Regulations, 2016, the Applicant was required to form an opinion regarding the impugned transactions purportedly covered under Section 43 of the Code on or before 75th day from the insolvency commencement date, and to make the requisite determination on or before 115th day from the insolvency commencement date. Furthermore, the instant application for appropriate reliefs should have been filed on or before the 135th day of the insolvency commencement date. The Applicant has failed to adhere with the said timelines and also failed to show reasonable cause for such delay. 

3.2. There is lack of determination by the Applicant and he has concluded that the Corporate Debtor had entered into certain prohibited transactions under the Code without independently applying his mind only based on the findings of the transaction auditor. Moreover, he has also shown through his submissions that upon being dissatisfied with the transaction auditor's findings, he made an unsuccessful attempt to seek clarification. 

3.3. The Applicant has failed to provide any material documents to substantiate his contentions with regards to the transaction being preferential. Infact, he has only submitted a ledger account prepared by himself and failed to produce any bank statement from which he collected the transactions. The Ex-RP was also unsuccessful in disclosing the manner in which alleged transactions were identified as preferential. Furthermore, transaction no.3 and 4 so identified by the applicant originate from the account of Respondent No. 3, who is not the CD and against whom there is no prayer. 

3.4. The transactions mentioned as preferential transactions were the transactions done in the ordinary course of business and have also been previously intimated the same to the Applicant that the said transactions were against the teaching services provided by Respondent No. 1 and 2. The amount was drawn as the salary of a teacher of Potential and Coaching Education Institution and not as the partner of the said firm. 

3.5 The Applicant, lacks the authority to file this application on preferential transactions, and has done so after the conclusion of CIRP without showing or seeking leave from this Tribunal. In the Resolution application, there is no authorization for him to file this application. Despite this, he misled the Tribunal by claiming to have been authorized to do so. Therefore, without proper authorization, this application is deemed illegal. 

# 4. Relevant submissions made by Respondent No. 3 vide reply dated 04.05.2023 are extracted hereunder: 

4.1. There is non-adherence of timelines laid down under Regulation 35A of CIRP Regulations, 2016. Further, the allegations of impugned transactions being preferential are void ab initio. The Respondent has provided all the necessary information in hand. 

4.2. The Potential and Concept Education is not in surviving Partnership Farm along with suspended Directors at present and that the answering respondent has already provided with whatever documents available with the answering respondent to the Resolution Professional 

# 5. Written submission dated 16.03.2203 filed by Respondent No. 4 was taken on record and thereby, Respondent No. 4 was released on 11.05.2023. 

# 6. Heard both sides and perused the material available on record. To entertain this application the two main issues which needs to be dealt with on the face of it by this Tribunal are, firstly, whether the application is barred by period of limitation as prescribed under Regulation 35A of the CIRP Regulations and secondly, whether the ex-RP has the locus to file/continue with the said application under Section 43 at hand, even after the approval of Resolution Plan by the Tribunal or taking over of CD by SRA. With regards to the first issue, this Bench, while following the settled law of Regulation 35A of CIRP Regulations only being directory and not mandatory in nature, holds that this application is not barred by limitation. Secondly, this Bench finds that the locus to file/continue with the said application is being derived by the Applicant from the Order passed by this Tribunal dated 24.03.2022 approving the Resolution Plan [IA(IBC)/61/GB/2021 in CP(IB)/03/GB/2020], wherein it was clearly laid down by this Tribunal that the IAs in CP(IB)/03/GB/2020 not disposed off alongwith IA(IBC)/61/GB/2021, were to be decided separately and any amount, if recovered on the account of the two IAs so mentioned in the Order dated 24.03.2022 therein, namely, the present IA, IA (IBC)/11/GB/2022 and IA(IBC)/17/GB/2022 (Section 66) shall be used to pay the Employees /Faculties and so on as per the Sec 53 of IBC only after the payment of fees of the RP of Rs 50,000.00 p. m. as neither is there any further amount that is to be paid to the FC nor are there any workers. Hence, in light of the two aforementioned prima facie issues out of the way, this Bench is thereby proceeding to examine the Section 43 application on merits. 

# 7. Hon'ble Supreme Court in Anuj Jain (RP) v. Axis Bank Limited & Ors. Civil Appeal Nos. 8512-8527 of 2019 has extensively discussed preferential transactions and devised a step by step process for recognition of preferential transactions:sions on 

• "19.5 Thus, the net concentrate of Section 43 is that if a transaction entered into by a corporate debtor is not falling in either of the exceptions provided by sub-section (3) and satisfies the three-fold requirements of sub-sections (4) and (2), it would be deemed to be a preference during a relevant time, whether or not in fact it were so; and whether or not it were intended or anticipated to be so. 

• 20. The analysis foregoing leads to the position that in order to find as to whether a transaction, of transfer of property or an interest thereof of the corporate debtor, falls squarely within the ambit of Section 43 of the Code, ordinarily, the following questions shall have to be examined in a given case: 

• (i). As to whether such transfer is for the benefit of a creditor or a surety or a guarantor? 

• (ii). As to whether such transfer is for or on account of an antecedent financial debt  or operational debt or other liabilities owed by the corporate debtor? 

• (iii) As to whether such transfer has the effect of putting such creditor or surety or  guarantor in a beneficial position than it would have been in the event of distribution of assets being made in accordance with Section 53? 

• (iv). If such transfer had been for the benefit of a related party (other than an employee), as to whether the same was made during the period of two years preceding the insolvency commencement date; and if such transfer had been for the benefit of an unrelated party, as to whether the same was made during the period of one year preceding the insolvency commencement date? (v) As to whether such transfer is not an excluded transaction in terms of sub- section (3) of Section 43? 

• 21. Having taken note of the salient features of Section 43 of the Code and the questions germane for its applicability over any transaction, we may now examine the questions calling for determination in these appeals. Obviously, if the transactions in question are to fall squarely within the mischief of Section 43, they must satisfy all the specifications and ingredients of sub-sections (2) and (4) of Section 43 and ought not to be within the exclusion provided in subsection (3) thereof. 

• ... 

• ...Even when all the requirements of sub-section (2) of Section 43 of the Code are satisfied, in order to fall within the mischief sought to be remedied by Section 43, the questioned preference ought to have been given at a relevant time. In other words, for a preference to become an avoidable one, it ought to have been given within the period specified in sub-section (4) of Section 43. The extent of 'relevant time' is different with reference to the relationship of the beneficiary with the corporate debtor inasmuch as, for the persons falling within the expression 'related party' within the meaning of Section 5 (24) of the Code, such period is of two years before the insolvency commencement date whereas it is one year in relation to the person other than a related party. 

# 8. Be that as it may, upon going through the records available and submissions made by Ex-RP in the present application, this Bench fails to find any merits in the Application.  Although, enumeration of specific transactions made by the Ex-RP acts as sufficient  proof of "firm determination" so made by him, however, the Ex-RP has been  unsuccessful in showcasing the transactions referred to by him, as preferential by way  of tangible and appreciable evidence. Moreover, the transactions identified by the Ex-  RP as preferential may either have been salaries drawn by the Suspended Directors or are transactions that have taken place not by the CD but by one Partnership Firm, Potential and Concept Educations, the tally data or account details of which are  unavailable with this Tribunal owing to the firm being a separate entity from the CD  altogether. Furthermore, the burden of proof for proving avoidance transactions lies on the Applicant and in the present case, Ex-RP himself has been deficient in  demonstrating the transactions in question as preferential, leaving a doubt in the mind  of this Bench with regards to the preferential nature of the transactions in question. Therefore, in view of lack of concrete evidence with respect to the impugned  transactions being preferential under Section 43, IBC, 2016, this Tribunal holds this  application devoid of merits. 

# 9. Hence, for the aforesaid reasons we are of the considered opinion that there is no merit in the instant application and the same deserves to be rejected. Accordingly, IA (IBC)/11/GB/2022 stands dismissed. 

# 10. The Registry is directed to send e-mail copies of the order forthwith to all the parties  and their Ld. Counsel for information and for taking necessary steps. 

# 11. Certified Copy of this order may be issued, if applied for, upon compliance of all  requisite formalities. 

# 12. File be consigned to records. 

---------------------------------------------------------