# In the matter of Akshaya Imaging Systems Private Limited

> NCLT judgment dated 2024-04-18. Citation: TCN-2024-NCLT-01680. 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-01680
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/akshaya-imaging-systems-private-limited-ec64f2ff

## 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 amounting to 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.

## 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 of Rs.45,03,680/- without clear narration for the financial year ending 31.03.2018. The CIRP had commenced on 31.05.2018. The Liquidator sought clarification from the Respondents, Mr. Sreenivasan Harikrishnan and Mr. Sreenivasan Janakiraman, regarding these transfers. The Respondents claimed the funds were borrowed from a third party and repaid. The Liquidator argued the transactions lacked commercial nexus and were intended to defraud creditors. The Respondents contended the application was not maintainable under Section 43 of the IBC. The Liquidator stated that the Respondents

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## Issues and analysis

### Issue 1: Whether the transactions in question constitute preferential transactions under Section 43 of the …

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

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

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**Interpretation:** Section 43 aims to prevent debtors from favoring certain creditors over others

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**Application:** The Tribunal applied Section 43 to the facts, noting that the transactions

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## Parties

- **Judges:** SANJIV…; Venkataraman…
- **Appellants:** Varadachari…
- **Respondents:** Akshaya Imaging…; Sreenivasan…

## Timeline

- **2018-03-31 — End of Financ…**: Financial year ending, during which cash transfers of Rs.45,03,680/- occurred without…
- **2018-05-31 — CIRP Init…**: Corporate Insolvency Resolution Process (CIRP) initiated against 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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