# In the matter of M/s. Radico Trading Ltd. Vs. Tarun Batra (Insolvency Professional) & Ors. Comp. App. (AT) (Insolvency) No. 139 of 2022

> NCLAT judgment dated 2022-03-22. Citation: TCN-2022-NCLAT-00572. This is a Company Appeal (AT) (Insolvency) filed against the judgment and order of the…

- **Court:** NCLAT
- **Order date:** 22 Mar 2022
- **Citation:** TCN-2022-NCLAT-00572
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ms-radico-trading-ltd-vs-tarun-batra-6bf2616d

## Summary

### Background

This is a Company Appeal (AT) (Insolvency) filed against the judgment and order of the Adjudicating Authority (National Company Law Tribunal), New Delhi, regarding an application filed by the Resolution Professional. The application sought to declare a transaction of the Corporate Debtor's plant and machinery to Respondent No. 3 as fraudulent and to cancel the transaction. The Adjudicating Authority allowed the application, leading the Appellant (original Respondent No. 3) to file this appeal.

## Facts

The Resolution Professional filed an application seeking to declare the transaction of the Corporate Debtor's plant and machinery to Respondent No. 3 as fraudulent. The Adjudicating Authority allowed the application, leading to the appeal. An application under Section 7 was filed on 2019-01-25. The Appellant claimed to have purchased Plant and Machinery for Rs. 7,55,200/- and Rs. 14,40,600/- on 2019-05-03 and 2019-05-08 respectively. A transaction audit was conducted, and the final report dated 2020-05-15 reported irregularities, including preferential and undervalued transactions intended to defraud creditors. The Adjudicating Authority noted that the book value of the machinery was Rs. 1.56 Cr., while the Appellant purchased it for a significantly lower amount. The

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority erred in declaring the transaction as undervalued without …

**Ratio:** Section 46(2) of the IB Code empowers the Adjudicating Authority to require an

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**Reasoning:** The court reasoned that the power under Section 46(2) is an enabling power, and the use

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**Interpretation:** Section 46(2) grants discretionary power to the Adjudicating Authority to

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**Application:** In this case, the court found no error in the Adjudicating Authority's decision

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## Parties

- **Judges:** Ashok Bh…; Alok Sriv…; +2 more
- **Appellants:** M/s. Radico…
- **Respondents:** Tarun B…

## Timeline

- **2019-01-25 — Application under…**: Application under Section 7 was filed…
- **2019-05-03 — Appellant claims to…**: Appellant claims to have purchased…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 46 — Relevant period for avoidable transactions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-46)

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