# 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-04280. 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-04280
- **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-74f5bef0

## 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 following an application by M/s. Sri M. Visveswaraya Co-operative Bank Ltd. The Adjudicating Authority ordered the

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## Facts

M/s. Right Engineers and Equipments Pvt. Ltd. underwent Corporate Insolvency Resolution Process (CIRP) initiated by M/s. Sri M. Visveswaraya Co-operative Bank Ltd. The applicant, Addanki Haresh, was appointed as the Interim Resolution Professional (IRP) and later as the Resolution Professional (RP). Subsequently, the company was ordered to be liquidated, and the applicant was appointed as the Liquidator. The audited balance sheets showed certain transactions and transfer of funds to related parties. A forensic audit was conducted, revealing potential preferential transactions covered by section 43 amounting to Rs.81.33 Lacs and potential fraudulent transactions covered by section 66 amounting to Rs.78.81 Lacs. Specifically, amounts were paid as 'Advance' to related

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## Issues and analysis

### Issue 1: Whether the payments made to the respondents constitute preferential transactions under Section 43 …

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

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**Reasoning:** The Adjudicating Authority relied on the Forensic Audit Report, which identified certain

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**Interpretation:** The interpretation of Section 43 involves determining whether the transactions

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**Application:** In this case, the Adjudicating Authority applied the ratio of Section 43 to the

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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…
- **2020-12-02 — Liquidation…**: The Adjudicating Authority ordered the liquidation of the Corporate Debtor and appointed…

## 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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