# In the matter of Sterling Biotech Limited

> NCLT judgment dated 2024-03-05. Citation: TCN-2024-NCLT-02202. The case involves an application (M.A. 675/2019) filed by Sterling Biotech Limited's Resolution…

- **Court:** NCLT
- **Order date:** 5 Mar 2024
- **Citation:** TCN-2024-NCLT-02202
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/sterling-biotech-limited-5abd55b9

## Summary

### Background

The case involves an application (M.A. 675/2019) filed by Sterling Biotech Limited's Resolution Professional under the Corporate Insolvency Resolution Process (CIRP). The application seeks a declaration that certain transactions undertaken by the erstwhile directors (Respondents 1 to 5) with related parties are preferential transactions under Section 43 of the Insolvency & Bankruptcy Code, 2016. Andhra Bank, a financial creditor, had initiated the CIRP against Sterling Biotech Limited. The applicant contends that the corporate debtor, under the management of the respondents, engaged in preferential transactions with related parties, specifically Sterling Oil Resources Limited and Sterling Port Limited.

## Facts

Andhra Bank initiated Corporate Insolvency Resolution Process (CIRP) against Sterling Biotech Limited under Section 7 of the Insolvency and Bankruptcy Code, 2016. The application was admitted on June 11, 2018. The applicant was appointed as the interim resolution professional and later as the resolution professional. The applicant identified Sterling Oil Resources Limited and Sterling Port Limited as related parties of the Corporate Debtor. The applicant alleged that the Corporate Debtor, under the management of the respondents, engaged in preferential transactions with these related parties. These transactions involved oil financing and port financing. The total amount involved in these transactions was INR 16.03 Crores. The applicant claimed that these transactions

…

## Issues and analysis

### Issue 1: Whether the transactions between the Corporate Debtor and its related parties qualify as …

**Ratio:** Section 43 of the IBC defines preferential transactions as those where a corporate debtor

…

**Reasoning:** The Tribunal reasoned that the transactions fell within the two-year look-back period for

…

**Interpretation:** Section 43 creates a legal fiction whereby a payment made to a creditor towards

…

**Application:** The Tribunal applied Section 43 to the facts, noting that the transactions

…

## Parties

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

## Timeline

- **2018-06-11 — CIRP Init…**: Andhra Bank's application under Section 7 of IBC was admitted, initiating CIRP against…
- **2018-07-26 — Appointment of…**: The Applicant was appointed as a resolution…

## 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)

---

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-5abd55b9