Anubhav Anilkumar Aggarwal Vs Rajendra Kumar Girdhar (NCLAT Delhi)
NCLAT Delhi held that once a transaction has been held to a fraudulent transaction there is no limitation to look back if the other ingredients of Section 66 (1) of the Insolvency and Bankruptcy Code are satisfied. Accordingly, appeal of appellants is dismissed.
Facts- The instant appeal challenges an order dated 07.05.2024 passed by Ld. NCLT Mumbai allowing IA 2853/2021 moved by the Resolution Professional of Corporate Debtor under Section 66 of the Insolvency and Bankruptcy Code, directing the erstwhile directors of Chamber Construction Pvt. Ltd. (CD) to contribute Rs. 36.53 crores to the Corporate Debtor’s assets due to alleged fraudulent/wrongful trading.
Conclusion- The legislature has intentionally kept no look back period for fraudulent transactions and the time gap between the transaction and CIRP, in our understanding is meaningless, if the transaction appears to be fraudulent. Once a transaction has been held to a fraudulent transaction there is no limitation to look back if the other ingredients of Section 66 (1) of the Code are satisfied.
Held that the impugned transaction is a fraudulent transaction entered into by the appellants with respondent No.2 to take funds out of the CD, fraudulently. We are also of the view that if the transaction has been found fraudulent the same could not be exonerated on technical issues or minor irregularities committed by the adjudicating authority.
