# In the matter of Parikh Fabrics Pvt. Ltd. IA No.879 of 2019 in CP(IB) No.12-10-HDB-2019

> NCLT judgment dated 2023-06-26. Citation: TCN-2023-NCLT-02793. The Resolution Professional (RP) filed an application (IA No. 879 of 2019) against the…

- **Court:** NCLT
- **Order date:** 26 Jun 2023
- **Citation:** TCN-2023-NCLT-02793
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/parikh-fabrics-pvt-ltd-ia-no879-of-2019-in-cpib-no12-10-hdb-2019-f3cb8e3a

## Summary

### Background

The Resolution Professional (RP) filed an application (IA No. 879 of 2019) against the suspended Board of Directors (Respondents No. 1 & 2) of Parikh Fabrics Pvt Ltd, the Corporate Debtor (CD). The RP sought orders to vest transferred property (cash) into the CD, repayment of benefits received from the CD, restoration of the pre-transaction position, protection of creditors' interests, and contribution from directors/related parties to the CD's assets. The application was based on findings of preferential, undervalued, and fraudulent transactions identified by Forensic and Transaction Auditors. The CD was admitted into CIRP on 2019-02-08. The RP opined that the CD had been subjected to transactions covered under Sections 43, 45, 50, and 66 of the IBC, 2016.

## Facts

The Corporate Debtor (Parikh Fabrics Pvt Ltd) was admitted into CIRP on 2019-02-08. The Resolution Professional (RP) filed an application (IA No. 879 of 2019) seeking orders related to preferential, undervalued, and fraudulent transactions. The RP relied on Forensic and Transaction Audit Reports. The RP identified several transactions, including: Transfer of Rs.2,41,58,975/- to Ankith & Co. (related party) during FY 2017-18, Transfer of Raw Material-Yarn valued at Rs.2,80,00,000/- to a generic account on 2018-03-31, Adjustments to related parties through Ankith & Co. amounting to Rs.1,86,47,654, Adjustment against liability created under OTS amounting to Rs.19,11,320, Creation of receivables amounting to Rs.36,00,001, Share application money amounting to

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## Issues and analysis

### Issue 1: Whether the Resolution Professional (RP) complied with the timelines stipulated under Regulation …

**Ratio:** Regulation 35A of the IBBI Regulations specifies timelines for the RP to form an opinion

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**Reasoning:** The court found that the RP appointed the Transaction Auditors on 2019-05-24, which was

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**Interpretation:** Regulation 35A mandates strict adherence to the specified timelines for the RP

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**Application:** In this case, the RP's failure to appoint Transaction Auditors and make a

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## Parties

- **Judges:** TELAPROLU…; Shri. Chara…
- **Appellants:** G. Satyanarayana…
- **Respondents:** Parikh Fabrics…; Nikhil B…
- **Advocates:** K.V. Sri…; A. S. Sathish…

## Timeline

- **2019-02-08 — CIRP Commen…**: The Corporate Debtor was taken into…
- **2019-03-07 — First CoC M…**: First CoC meeting was held on…

## 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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