# Atul Babulal Prajapati & Anr. vs. Suhas Dinkar Bhattbhatt & Ors.

> NCLAT judgment dated 25 Mar 2026. Citation: TCN-2026-NCLAT-00058. Appellants, Atul Babulal Prajapati and Pinal Prajapati, promoters and suspended directors of…

- **Court:** NCLAT
- **Order date:** 25 Mar 2026
- **Citation:** TCN-2026-NCLAT-00058
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/atul-babulal-prajapati-anr-vs-suhas-dinkar-bhattbhatt-ors-53f6b0b4

## Summary

### Background

Appellants, Atul Babulal Prajapati and Pinal Prajapati, promoters and suspended directors of WSH Pvt. Ltd. (Corporate Debtor), challenged an NCLT order dated 01.10.2024. This order directed them, along with Zen Agrifoods LLP, to pay Rs. 2,00,50,000/-, declaring a transaction as preferential. The transaction involved offsetting receivables of the Corporate Debtor from Wholesale Hub LLP against payables to Atul Babulal Prajapati's proprietorship firm, without routing funds through the Corporate Debtor's bank account. CIRP against WSH Pvt. Ltd. commenced on 01.02.2021. A forensic auditor was appointed on 17.04.2021, and based on their report, the Resolution Professional (Suhas Dinkar Bhattbhatt) filed an application (I.A. No. 556 of 2021) to avoid preferential,

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## Facts

Appellants Atul Babulal Prajapati and Pinal Prajapati are promoters and suspended directors of WSH Pvt. Ltd., the Corporate Debtor.

Atul Babulal Prajapati operates a proprietorship firm and controls Wholesale Hub LLP.

CIRP against WSH Pvt. Ltd. commenced on 01.02.2021.

The RP (Suhas Dinkar Bhattbhatt) appointed a forensic auditor, who identified an offsetting transaction of Rs. 2,00,50,000/-.

This transaction involved WSH Pvt. Ltd. (CD) offsetting receivables from Wholesale Hub LLP against payables to Atul Babulal Prajapati's proprietorship firm.

The transaction was executed on 30.06.2019, without routing funds through the Corporate Debtor's bank account or corporate authorization.

Appellants admitted the diversion was to "avoid unnecessary/multiple banking transactions."

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## Issues and analysis

### Issue 1: Whether the transaction involving the offsetting of receivables from Wholesale Hub LLP against …

**Ratio:** A transaction is deemed preferential under Section 43(2) IBC if there is a transfer of

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**Reasoning:** The NCLAT found that Atul Babulal Prajapati was a Director/KMP of the Corporate Debtor,

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**Interpretation:** Section 43(2)(a) is interpreted broadly to include extinguishment or reduction

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**Application:** The diversion of Rs. 2,00,50,141/- from Wholesale Hub LLP to the appellant's

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## Parties

- **Judges:** N. Sesha…; Arun Ba…; +1 more
- **Appellants:** Atul Babulal…; Pinal Pra…
- **Respondents:** WSH Priva…; Suhas Dinkar…; +3 more
- **Other parties:** Preferential…; Insolvency and…; +8 more

## Timeline

- **2018-2019 — Transaction Period…**: Forensic Auditor appointed to audit transactions for FY 2018-2019 & 2019-2020. Ledger…
- **2019-06-30 — Offsetting Transaction…**: The square-off/offsetting transaction of Rs. 2,00,50,141/- was effected on this date,…

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