# In the matter of Shivshakti Barrels Pvt. Ltd. . IA-282(AHM)2021 in CP(IB) No. 717 of 2019

> NCLT judgment dated 2023-01-02. Citation: TCN-2023-NCLT-05236. The case involves an application filed by the Interim Resolution Professional (IRP) of…

- **Court:** NCLT
- **Order date:** 2 Jan 2023
- **Citation:** TCN-2023-NCLT-05236
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shivshakti-barrels-pvt-ltd-ia-282ahm2021-in-cpib-no-717-of-2019-06540cd6

## Summary

### Background

The case involves an application filed by the Interim Resolution Professional (IRP) of Shivshakti Barrels Pvt. Ltd. under Section 66 read with Section 14 of the Insolvency and Bankruptcy Code (IBC), 2016, against two directors of the Corporate Debtor, Mr. Jaivik Samratsingh Parihar and Mr. Prerit Samratsingh Parihar. The IRP alleged that the directors had fraudulently transferred funds from the Corporate Debtor's accounts during the moratorium period declared under Section 14 of the IBC.

## Facts

The Interim Resolution Professional (IRP) of Shivshakti Barrels Pvt. Ltd. filed an application under Section 66 read with Section 14 of the Insolvency and Bankruptcy Code (IBC), 2016, against two directors of the Corporate Debtor, Mr. Jaivik Samratsingh Parihar and Mr. Prerit Samratsingh Parihar. The IRP alleged that the directors had transferred Rs. 42,51,563/- from Federal Bank and Rs. 17,11,351/- from Bank of Baroda on 10.03.2021 and 19.03.2021 respectively, during the moratorium period declared under Section 14 of the IBC, constituting fraudulent transactions. The directors contended that the transfers were made in the normal course of business to keep the Corporate Debtor as a going concern by paying small suppliers and employees. The Corporate Debtor was admitted

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## Issues and analysis

### Issue 1: Whether the transfers made by the directors of the Corporate Debtor during the moratorium period …

**Ratio:** The ratio applied is that the 'aspect' of 'Fraudulent Trading' requires a very 'High

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**Reasoning:** The court reasoned that the transactions in question were of small value and were

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**Interpretation:** The interpretation of Section 66 of the IBC, 2016, is that it requires a high

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**Application:** The court applied the ratio and reasoning to the facts of the case, noting that

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## Parties

- **Judges:** Madan B.…; KAUSHALENDRA…
- **Appellants:** Hiten R A…
- **Respondents:** Shivshakti…; Jaivik Samratsingh…

## Timeline

- **2021-03-10 — Transfer of…**: Rs. 42,51,563/- transferred…
- **2021-03-10 — Corporate Debtor…**: The Corporate Debtor is admitted in CIRP and the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 66 — Fraudulent trading or wrongful trading](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-66)

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