Ashok Kumar Agarwal Vs Narayan Chandra Saha & Ors. (NCLAT Delhi)
In Ashok Kumar Agarwal vs Narayan Chandra Saha & Ors., the National Company Law Appellate Tribunal (NCLAT), Delhi, examined an appeal against the order of the Adjudicating Authority (NCLT Kolkata) dated 10.12.2024, which had rejected an application filed by the Liquidator under Section 66 of the Insolvency and Bankruptcy Code, 2016.
The case involved a transaction where the Corporate Debtor was to receive ₹37.50 lakhs from Orient Exports Pvt. Ltd. Instead of cash repayment, the dues were settled through the transfer of shares held by Orient Exports in another group company, Imperial Commercial Pvt. Ltd. The Appellant argued that the transaction was preferential and should have been treated as fraudulent, particularly as noted in the Transaction Audit Report.
The Adjudicating Authority found that the companies involved were unlisted and that the settlement through share transfer was adopted instead of writing off a long-pending receivable. It also observed that the Liquidator claimed undervaluation of shares without providing any valuation report and relied on assumptions such as net asset value. Further, no adverse remarks were made by statutory auditors, no objections were raised by shareholders, and no inquiries were initiated by statutory authorities.
