# In the matter of Right Engineers and Equipments India Pvt. Ltd. I.A. No. 482 of 2020 in C.P. (IB) No. 320-BB-2019

> NCLT judgment dated 2022-02-02. Citation: TCN-2022-NCLT-04288. The Resolution Professional of M/s. Right Engineers and Equipments Pvt. Ltd. filed an I.A.…

- **Court:** NCLT
- **Order date:** 2 Feb 2022
- **Citation:** TCN-2022-NCLT-04288
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/right-engineers-and-equipments-india-pvt-ltd-ia-no-482-of-2020-in-cp-ib-no-320-b-078b408b

## Summary

### Background

The Resolution Professional of M/s. Right Engineers and Equipments Pvt. Ltd. filed an I.A. (Interlocutory Application) against the respondents under Section 43 of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the National Company Law Tribunal Rules, 2016, seeking a declaration that certain payments made to the respondents constitute preferential transactions violating Section 43 of the IBC. The applicant also sought the reversal of advance repayment transactions made to the respondents and the return of Rs.49.83 Lacs paid by the Corporate Debtor. The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor based on an application filed by M/s. Sri M. Visveswaraya Co-operative Bank Ltd. The Adjudicating Authority ordered

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## Facts

M/s. Right Engineers and Equipments Pvt. Ltd. underwent Corporate Insolvency Resolution Process (CIRP) after an application by M/s. Sri M. Visveswaraya Co-operative Bank Ltd. The Adjudicating Authority ordered liquidation and appointed the Applicant as Liquidator. The Audited Balance Sheets showed fund transfers to related parties, prompting a forensic audit. The audit revealed potential preferential transactions (Rs.81.33 Lacs) and fraudulent transactions (Rs.78.81 Lacs). The Resolution Professional filed I.A. No.482 of 2020 seeking to declare certain payments to Respondents 1, 2, and 3 as preferential transactions under Section 43 of the IBC. Respondent No.3, wife of Respondent No.2, was also found liable to return Rs.11,50,000/-. The Respondents failed to provide

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## Issues and analysis

### Issue 1: Whether the transactions in question constitute preferential transactions under Section 43 of the …

**Ratio:** Section 43 of the I&B Code defines preferential transactions and provides for their

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**Reasoning:** The court relied on the Forensic Audit Report, which identified specific transactions as

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**Interpretation:** Section 43 is interpreted to prevent debtors from unfairly favoring certain

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**Application:** The court applied Section 43 to the specific facts, finding that the payments

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## Parties

- **Judges:** Ajay Kumar…; Manoj Kumar…
- **Appellants:** Addanki H…
- **Respondents:** M/s. Right…; H.P. Arun…

## Timeline

- **2019-10-29 — Initiation…**: The Adjudicating Authority admitted the CP filed by M/s. Sri M. Visveswaraya Co-operative…
- **2020-11-09 — CoC Meet…**: The 8th Meeting of the Committee of Creditors (CoC) was held, and the draft Forensic…

## 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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