# In the matter of Nicomet Industries Limited

> NCLT judgment dated 2024-04-23. Citation: TCN-2024-NCLT-01638. The Applicant filed an application impugning certain transactions for avoidance under the…

- **Court:** NCLT
- **Order date:** 23 Apr 2024
- **Citation:** TCN-2024-NCLT-01638
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nicomet-industries-limited-09e49ea9

## Summary

### Background

The Applicant filed an application impugning certain transactions for avoidance under the Insolvency and Bankruptcy Code, 2016. The Liquidator sought clarifications from the Resolution Professional regarding transactions between the Corporate Debtor and other entities, including preferential, undervalued, and fraudulent transactions. The Liquidator stated that the Avoidance Application has legal flaws due to inconclusive findings and that it is not feasible to pursue the application on merits. The Transaction Audit Report questioned preferential transactions with Kaatyaayini Exports, Cupro Tubes Enterprises Private Limited, and Vienna Metals Trading FZC. It also identified undervalued transactions related to Cupro Tubes Enterprises and Trafigura India Pvt. Ltd., as

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## Facts

Mr. Devang Sampat, the Resolution Professional (RP) of Nicomet Industries Limited, filed an application to impugn certain transactions as preferential, undervalued, or fraudulent under the Insolvency and Bankruptcy Code, 2016 (IBC). The RP relied on a Transaction Audit Report that identified several transactions of concern. Kaatyaayini Exports, a related party, received advances exceeding purchases, and amounts were adjusted against payments to suspended promoters. Cupro Tubes Enterprises Private Limited (CTEPL) engaged in high sea sales and purchases with Nicomet, with stock located at CTEPL's factory. Vienna Metals Trading FZC had a significant amount written off. Journal entries were flagged for setting off amounts payable to creditors against receivables from

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## Issues and analysis

### Issue 1: Whether the transaction of amounts paid to suspended board/account being settled by adjusting …

**Ratio:** Section 43 of the Insolvency and Bankruptcy Code, 2016 defines preferential transactions.

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**Reasoning:** The court found that the transaction of amounts paid to suspended board/account being

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**Interpretation:** The court interpreted Section 43 to mean that any transaction that gives

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**Application:** The court applied the ratio to the facts by determining that the set-off of

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## Parties

- **Judges:** V.G. B…; Prabhat…
- **Appellants:** Devang S…
- **Respondents:** Nicomet Industries…; Nicomet Indsutries…

## Timeline

- **2019-01-01 — MA No. 4119/MB…**: Filing of MA No.…
- **2018-01-01 — C.P (IB) No.619/MB/C-I/2…**: Filing of C.P (IB)…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 44 — Orders in case of preferential transactions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-44)

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