# In the matter of Akshaya Imaging Systems Private Limited

> NCLT judgment dated 2024-04-18. Citation: TCN-2024-NCLT-01689. The case involves an application (IA/1320/IB/2020) filed by the Liquidator of Akshaya Imaging…

- **Court:** NCLT
- **Order date:** 18 Apr 2024
- **Citation:** TCN-2024-NCLT-01689
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/akshaya-imaging-systems-private-limited-adaf2cee

## Summary

### Background

The case involves an application (IA/1320/IB/2020) filed by the Liquidator of Akshaya Imaging Systems Private Limited under Section 43 of the Insolvency and Bankruptcy Code (IBC), 2016, seeking a declaration that certain transactions constitute preferential transactions. The Liquidator identified cash transfers totaling Rs.45,03,680/- without clear narration for the financial year ending 31.03.2018. The Corporate Insolvency Resolution Process (CIRP) was initiated on 31.05.2018. The Liquidator sought clarification from the Respondents (Mr. Sreenivasan Harikrishnan and Mr. Sreenivasan Janakiraman) regarding these transactions. The Respondents claimed the funds were borrowed from a third party and repaid. The Liquidator argued that these payments were preferential and

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## Facts

The Liquidator of Akshaya Imaging Systems Private Limited filed an application under Section 43 of the IBC, 2016, alleging preferential transactions. The Liquidator identified cash transfers totaling Rs.45,03,680/- without clear narration for the financial year ending 31.03.2018. The CIRP was initiated on 31.05.2018. The Liquidator sought clarification from Mr. Sreenivasan Harikrishnan and Mr. Sreenivasan Janakiraman, the Respondents. The Respondents claimed the funds were borrowed from a third party and repaid. The Liquidator argued that these payments were preferential and intended to defraud creditors. The Respondents withdrew Rs.1,40,29,613.75 between 01.07.2017 and 31.05.2018. The Corporate Debtor's current assets decreased by Rs.1,21,92,320.43, and current

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## Issues and analysis

### Issue 1: Whether the transactions identified by the Liquidator constitute preferential transactions under …

**Ratio:** Section 43 of the IBC, 2016 defines preferential transactions as those where a corporate

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**Reasoning:** The court reasoned that the Respondents' admission of borrowing funds from a third party

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**Interpretation:** Section 43 aims to prevent a corporate debtor from favoring certain creditors

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**Application:** The court applied the provisions of Section 43 to the facts, noting that the

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** Varadachari…
- **Respondents:** Akshaya Imaging…; Sreenivasan…
- **Advocates:** Pavithra D…; James Victor…; +2 more

## Timeline

- **2018-03-31 — Financial Y…**: Financial year ending, during which the Liquidator identified cash transfers totaling…
- **2018-05-31 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) initiated for Akshaya Imaging Systems…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 43 — Preferential transactions and relevant time](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-43)

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