# In the matter of Reliance Communications Ltd.

> NCLT judgment dated 2024-04-16. Citation: TCN-2024-NCLT-01717. The application IA 1276/2020 was filed by Mr. Anish Niranjan Nanavaty, the Resolution…

- **Court:** NCLT
- **Order date:** 16 Apr 2024
- **Citation:** TCN-2024-NCLT-01717
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/reliance-communications-ltd-ad38a78d

## Summary

### Background

The application IA 1276/2020 was filed by Mr. Anish Niranjan Nanavaty, the Resolution Professional, in the matter of M/s Reliance Communications Limited (Corporate Debtor) under Section 43 & 44 of The Insolvency and Bankruptcy Code, 2016, seeking to declare certain repayments made by the Corporate Debtor to the Respondent as preferential transactions. The Applicant observed that prior to the commencement of the corporate insolvency resolution process (CIRP), the Corporate Debtor repaid an unsecured loan of Rs. 1,745 crores to the Respondent, along with interest payments of Rs. 52.98 crores. The Applicant contended that these payments, totaling Rs. 1797.98 crores, constitute a preferential transaction liable to be set aside.

## Facts

Mr. Anish Niranjan Nanavaty, the Resolution Professional of Reliance Communications Limited (Corporate Debtor), filed an application (IA 1276/2020) under Sections 43 and 44 of the Insolvency and Bankruptcy Code, 2016, seeking to declare certain transactions as preferential. The Corporate Debtor had repaid an unsecured loan of Rs. 1,745 crores to Reliance Capital Limited (Respondent) before the commencement of the Corporate Insolvency Resolution Process (CIRP). Additionally, the Corporate Debtor made interest payments of Rs. 52.98 crores on the unsecured loan. These payments, totaling Rs. 1797.98 crores, were made in multiple tranches between May 15, 2016, and June 30, 2017. The Resolution Professional appointed Grant Thornton India LLP as auditors, who identified these

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## Issues and analysis

### Issue 1: Whether the repayment of unsecured loans by the Corporate Debtor to the Respondent constitutes a …

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

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**Reasoning:** The NCLT observed that the Corporate Debtor repaid an unsecured loan to the Respondent

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**Interpretation:** Section 43 is interpreted to mean that any transaction that answers to the

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**Application:** In this case, the Corporate Debtor owed money to the Respondent prior to the

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## Parties

- **Judges:** Prabhat…; V. G. Bisht…
- **Appellants:** Anish Niranjan…
- **Respondents:** Reliance Communica…; Reliance Capital…

## Timeline

- **2020-01-09 — Auditors' Inter…**: Grant Thornton India LLP submitted an interim report identifying the repayments made by…
- **2020-01-10 — Auditors' Fina…**: Grant Thornton India LLP submitted a final report identifying the repayments made by the…

## 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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