# In the matter of Maximum Synthetics Pvt. Ltd. {IA No. 366-JPR-2019 in CP No. (IB)-17-7-JPR-2018]

> NCLT judgment dated 2024-02-22. Citation: TCN-2024-NCLT-02469. The case involves an application filed by the Resolution Professional (RP) of M/s Maximum…

- **Court:** NCLT
- **Order date:** 22 Feb 2024
- **Citation:** TCN-2024-NCLT-02469
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/maximum-synthetics-pvt-ltd-ia-no-366-jpr-2019-in-cp-no-ib-17-7-jpr-2018-de6a151f

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) of M/s Maximum Synthetics Pvt. Ltd. ('Corporate Debtor') under Section 43 of the Insolvency and Bankruptcy Code, 2016 ('IBC') to declare certain transactions as preferential and seek directions for reversing them. The Adjudicating Authority had admitted an application filed by M/s Reliance Commercial Finance Limited, Financial Creditor under Section 7 of the Code for initiating Corporate Insolvency Resolution Process ('CIRP') against the Corporate Debtor. Subsequently, a liquidation order was passed, and the RP was appointed as the Liquidator. The RP, based on the transaction audit, identified certain transactions as preferential under Section 43 of the IBC.

## Facts

M/s Reliance Commercial Finance Limited initiated Corporate Insolvency Resolution Process (CIRP) against M/s Maximum Synthetics Pvt. Ltd. under Section 7 of the IBC. Mr. Satyendra Prasad Khorania was appointed as the Resolution Professional (RP) and later as the Liquidator. The RP, based on Regulation 35A, opined that the Corporate Debtor's directors made preferential transactions under Section 43 of the IBC. M/s H Mittal & Co. conducted a transaction audit. The audit identified payments to Maxima Textiles (Rs. 39,03,400), BRC Fashions Pvt. Ltd. (Rs. 44,19,082), Suiting World (Rs. 20,84,500), Taruna Chandak (Rs. 1,00,000), and Kailash Chandak (Rs. 10,65,320). Maxima Textiles is a proprietorship of Shiv Ratan Chandak, who was also a director of the Corporate Debtor.

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## Issues and analysis

### Issue 1: Whether the payments made by the Corporate Debtor to Maxima Textiles, BRC Fashions Pvt. Ltd., …

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

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**Reasoning:** The court analyzed each transaction to determine if it met the criteria for a

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**Interpretation:** Section 43 of the IBC aims to prevent corporate debtors from unfairly favoring

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**Application:** The court applied the principles of Section 43 to the specific facts of each

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Respondents:** M/S MAXIMUM…; SHIV RATAN…

## Timeline

- **2018-07-07 — CP No. (IB)- 17/7/JPR/20…**: The case was registered as…
- **2019-05-17 — Order by Adjudicating…**: The Adjudicating Authority admitted an application filed by M/s Reliance Commercial…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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