# In the matter of Sewa Steels Private Limited

> NCLT judgment dated 2023-11-30. Citation: TCN-2023-NCLT-00500. The case involves an application filed under Section 43 of the Insolvency & Bankruptcy Code,…

- **Court:** NCLT
- **Order date:** 30 Nov 2023
- **Citation:** TCN-2023-NCLT-00500
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sewa-steels-private-limited-0134e40a

## Summary

### Background

The case involves an application filed under Section 43 of the Insolvency & Bankruptcy Code, 2016 ('IBC') by the Resolution Professional ('RP') of M/s Sewa Steels Private Limited ('Corporate Debtor'). The RP seeks to declare certain fund transfers made to Respondent No. 1 (Pinki Aggarwal) and Respondent No. 2 (Sanchi Aggarwal) as preferential transactions. An application was initially filed under Section 9 of the Code by the Operational Creditor, Mr. Pawan Garg, which led to the initiation of the CIRP of the Corporate Debtor. The Adjudicating Authority admitted the application on 25.05.2022, and Mr. Arun Chadha was appointed as the Interim Resolution Professional ('IRP'). Subsequently, the Applicant was appointed as the Resolution Professional ('RP') on 01.09.2022.

## Facts

Mr. Pawan Garg, an Operational Creditor, initiated CIRP against M/s Sewa Steels Pvt. Ltd. The CIRP was admitted on 25.05.2022. The Resolution Professional (RP) discovered fund transfers from the Corporate Debtor to Pinki Aggarwal (Respondent No. 1) and Sanchi Aggarwal (Respondent No. 2). Pinki Aggarwal is the Promoter-Director of the Corporate Debtor, holding 28.36% equity, while Sanchi Aggarwal, her daughter, holds 3.36% equity. On 07.01.2023, the RP requested explanations from the Respondents regarding these transfers. The Respondents explained on 15.01.2023, admitting the payments were repayments of unsecured loans. Respondent Nos. 1 and 2 had extended unsecured loans to the Corporate Debtor, which were repaid during the look-back period (2 years prior to CIRP

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## Issues and analysis

### Issue 1: Whether the fund transfers from the Corporate Debtor to Respondent No. 1 and Respondent No. 2 …

**Ratio:** Section 43 of the IBC defines preferential transactions and outlines the conditions under

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**Reasoning:** The court reasoned that the transfers to Respondents No. 1 and 2 were for antecedent

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

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

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## Parties

- **Judges:** Deep Chandr…; RAJEEV ME…
- **Appellants:** Pawan…
- **Respondents:** M/S Sewa Steels…
- **Advocates:** Kunal God…; Surendra…

## Timeline

- **2022-05-25 — CIRP Init…**: Application under Section 9 of the Code by Mr. Pawan Garg admitted, initiating CIRP of…
- **2022-05-25 — Appointment…**: Mr. Arun Chadha appointed as Interim…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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