Sidharth Bharatbhushan Jain Vs State Bank of India (NCLAT Delhi)
NCLAT Delhi held that extension of look back period beyond 2 years for related party transactions under section 43 of the Insolvency and Bankruptcy Code is not allowable.
Facts-This appeal is against an impugned order dated 09.11.2023 whereby an application filed u/s. 43 of the Code was allowed by NCLT. Appellant submits the Corporate Debtor had supplied certain goods to M/s Pratap Associates, an HUF firm of Appellant No.3 herein and hence a related party. Such goods were supplied before 23.05.2018 and the amount outstanding against Pratap Associates as on 23.05.2018 was of Rs.7,78,31,555/-. M/s Pratap Associates (HUF) could not pay this outstanding to Corporate Debtor. .
On 8th September, 2021, M/s Sysco Industries Ltd, the Corporate Debtor, went into CIRP and thus look back period u/s. 43 of Code commenced w.e.f. 8th September, 2019.
Conclusion- Held that the outstanding being of more than 2 years prior to CIRP commencement date, the relief under Section 43 of the Code would not be available. In the circumstances we set aside the impugned order passed by Ld. NCLT, with liberty aforesaid.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
This appeal is against an impugned order dated 09.11.2023 whereby an application filed under Section 43 of the Code was allowed by the Ld. NCLT. The Learned counsel for the appellant submits the Corporate Debtor had supplied certain goods to M/s Pratap Associates, an HUF firm of Appellant No.3 herein and hence a related party. Such goods were supplied before 23.05.2018 and the amount outstanding against Pratap Associates as on 23.05.2018 was of Rs.7,78,31,555/-. M/s Pratap Associates (HUF) could not pay this outstanding to Corporate Debtor. .
