# In the matter of  IDEB Projects Private Limited IA No. 58 of 2020 in C.P. (IB)No.17-BB-2019

> NCLT judgment dated 2023-04-13. Citation: TCN-2023-NCLT-03813. The case involves an application filed by the Liquidator of IDEB Projects Private Limited,…

- **Court:** NCLT
- **Order date:** 13 Apr 2023
- **Citation:** TCN-2023-NCLT-03813
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/ideb-projects-private-limited-ia-no-58-of-2020-in-cp-ibno17-bb-2019-a3fa941b

## Summary

### Background

The case involves an application filed by the Liquidator of IDEB Projects Private Limited, seeking a declaration that certain payments made by the Corporate Debtor to Respondent No. 3 (IDEB Grand Reality Pvt. Ltd.) constitute preferential transactions under Section 43 of the Insolvency and Bankruptcy Code, 2016 (IBC). The liquidator contends that these payments, totaling Rs. 7,23,61,260/-, were made to settle debts owed to a related party, thereby violating the provisions of the IBC. The respondents, including the former directors of the Corporate Debtor, opposed the application, arguing that the payments were made in the ordinary course of business and pursuant to a settlement deed. The applicant appointed M/s. M M Reddy & Co. Chartered Accountants to carry out

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## Facts

IDEB Projects Private Limited (the Corporate Debtor) underwent Corporate Insolvency Resolution Process (CIRP) and subsequent liquidation. The Liquidator identified certain transactions as potentially preferential under Section 43 of the IBC. Specifically, the Corporate Debtor made payments totaling Rs. 7,23,61,260/- to IDEB Grand Reality Pvt. Ltd. (Respondent No. 3) between January 2018 and April 2018. IDEB Grand Reality Pvt. Ltd. was a related party to the Corporate Debtor for a portion of this period, as the directors of the Corporate Debtor were also shareholders of Respondent No. 3. The shareholding was transferred on 31.03.2018. The Liquidator argued that these payments were made to settle debts owed to Respondent No. 3, giving them a preferential position over

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## Issues and analysis

### Issue 1: Whether the payments made by the Corporate Debtor, IDEB Projects Private Limited, to Respondent No. …

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

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**Reasoning:** The NCLT reasoned that the payments made by the Corporate Debtor to Respondent No. 3 fell

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**Interpretation:** Section 43 is interpreted as a deeming provision, meaning that if a transaction

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**Application:** The NCLT applied the ratio of Section 43 to the facts of the case, finding that

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## Parties

- **Judges:** T. Krishn…; Manoj Kumar…
- **Appellants:** Velayudham…
- **Respondents:** IDEB Projects…; Harkirat Singh…

## Timeline

- **2011-08-25 — Settlemen…**: Settlement reached before the…
- **2018-01-24 — First Pa…**: Corporate Debtor transferred…

## 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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