# In the matter of Shree Rudra Shakti Industries Pvt. Ltd.

> NCLT judgment dated 2023-12-22. Citation: TCN-2023-NCLT-00047. M/s. V.N. Commercial Corporation, an operational creditor, filed an application under Section 9…

- **Court:** NCLT
- **Order date:** 22 Dec 2023
- **Citation:** TCN-2023-NCLT-00047
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/shree-rudra-shakti-industries-pvt-ltd-eca93980

## Summary

### Background

M/s. V.N. Commercial Corporation, an operational creditor, filed an application under Section 9 of the Insolvency and Bankruptcy Code (IBC) against M/s. Shree Rudra Shakti Industries Private Limited, the corporate debtor. The application was admitted, and CIRP was initiated. The applicant alleged fraudulent and undervalued transactions by the corporate debtor, including the sale of land, inventory, and plant & machinery. The applicant sought to declare these transactions void and restore the property's original position. The Resolution Professional (RP) initially filed avoidance applications but later withdrew them with the approval of the Committee of Creditors (CoC). The applicant appealed against this withdrawal before the NCLAT.

## Facts

M/s. V.N. Commercial Corporation filed an application under Section 9 of the IBC against M/s. Shree Rudra Shakti Industries Private Limited on 23.06.2018, which was admitted on 14.05.2019. The applicant sought to declare certain transactions as fraudulent and undervalued. Respondent No. 2 was initially appointed as the Interim Resolution Professional (IRP) and later confirmed as the Resolution Professional (RP). The applicant alleged that the suspended directors of the corporate debtor conspired to siphon off the property by executing a bogus memorandum of understanding (MoU) to sell land and building at an undervalued price to Respondent No. 7. The building of the corporate debtor was purchased from Hyderabad Silk Private Limited on 30.09.2002. A part of the property

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## Issues and analysis

### Issue 1: Whether the sale transactions executed by the Corporate Debtor were fraudulent and undervalued, …

**Ratio:** Sections 43, 45, 47, and 66 of the IBC deal with preferential, undervalued, and

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**Reasoning:** The NCLT observed that the sale transactions were executed after the Section 9

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**Interpretation:** The interpretation of these sections requires a thorough examination of the

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**Application:** In this case, the NCLT directed the appointment of two new valuers to ascertain

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## Parties

- **Judges:** Rajeev Bh…; Sanjay…
- **Appellants:** V.N. Commercial…
- **Respondents:** Shree Rudra…; Chakravarthi…

## Timeline

- **2018-06-23 — Section 9 Application…**: M/s. V.N. Commercial Corporation filed an application under Section 9 of the IBC against…
- **2018-12-08 — Execution…**: Execution of Memorandum of Understanding (MoU) between the Corporate Debtor and…

## 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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