# In the matter of Sterling Biotech Limited

> NCLT judgment dated 2024-03-05. Citation: TCN-2024-NCLT-02203. The case involves multiple applications (M.A. 136/2019, M.A. 675/2019, and M.A. 687/2019) filed…

- **Court:** NCLT
- **Order date:** 5 Mar 2024
- **Citation:** TCN-2024-NCLT-02203
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sterling-biotech-limited-1b979c3f

## Summary

### Background

The case involves multiple applications (M.A. 136/2019, M.A. 675/2019, and M.A. 687/2019) filed by Sterling Biotech Limited through its Resolution Professional under the Corporate Insolvency Resolution Process (CIRP). These applications seek directions against the erstwhile directors (Respondent Nos. 1 to 5) regarding fraudulent and preferential transactions, as well as undervalued transactions. The initial corporate insolvency resolution process was initiated by Andhra Bank, a financial creditor, against Sterling Biotech Limited, which was admitted on June 11, 2018.

## Facts

Andhra Bank initiated corporate insolvency resolution process (CIRP) against Sterling Biotech Limited, admitted on June 11, 2018. The Resolution Professional (RP) filed applications (M.A. 136/2019, M.A. 675/2019, M.A. 687/2019) alleging fraudulent, preferential, and undervalued transactions by the erstwhile directors. Key facts include: Purchases at exorbitant prices from suppliers with questionable credentials; Payments to Nishant Consultancy without supporting documents; Advances paid to related parties with no direct business nexus; An undervalued land lease to Sterling Healthcare Private Limited, a related entity; A sharp decline in the Corporate Debtor's revenue and profit from 2012 onwards; Significant investments in uncompleted projects, including a gelatin

…

## Issues and analysis

### Issue 1: Whether the transactions undertaken by the Corporate Debtor constitute fraudulent transactions …

**Ratio:** Section 66 of the Insolvency and Bankruptcy Code, 2016 allows the Adjudicating Authority

…

**Reasoning:** The Tribunal observed that the facts placed on record by the Resolution Professional

…

**Interpretation:** The term 'fraud' is not defined in the Code but is defined in Explanation to

…

**Application:** The Tribunal applied the definition of fraud and found that the transactions,

…

## Parties

- **Judges:** Prabhat…; V.G. B…
- **Respondents:** Sterling Biotech…; Nitin Jayantilal…
- **Advocates:** Devashish G…

## Timeline

- **2018-06-11 — Insolvency Application…**: Andhra Bank's application against Sterling Biotech Limited was admitted, initiating the…
- **2018-07-26 — Resolution Professional…**: The Applicant was appointed as a resolution…

## 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)

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sterling-biotech-limited-1b979c3f