2. In Arun Chadha (Liquidator of Pawan Buildwell Private Limited) v. Ramesh Kumar Suneja, the NCLAT took up two separate appeals together and in connection with the appeal filed by the Liquidator set aside the order of the Adjudicating Authority, which held that the security interest created over the ‘mortgaged property’ by the corporate debtor is not a violation of Section 43, as erroneous and cancelled the Form CHG-1, and directed that the ‘mortgaged property’ become a part of the liquidation estate of the corporate debtor. The NCLAT noted that the lookback period for when the property of a corporate debtor for benefit of its related parties is in question, the lookback period is of 2(two) years from the date of initiation of the CIRP and therefore, in the instant case the transaction of the corporate debtor mortgaging the property for the benefit of its related parties falls within the scope of the lookback period.
With respect to another appeal filed by the respondent related parties, the NCLAT observed that the corporate debtor had entered into an MoU with SAKS Developers, which was an entity governed by its related parties. Whilst, the NCLAT has raised issues regarding the veracity of such unstamped MoU, the NCLAT noted that the MOU had been purportedly executed between the period when NCLAT had dismissed the order of admission of the corporate debtor, and the order of the Supreme Court by which the said decision of the NCLAT was rejected. The NCLAT noted that whilst, moratorium was technically and legally not in force, the decision of the corporate debtor to transfer an amount of Rs.1,02,09,360 was done at a time hurriedly when the sword of insolvency was hanging over the corporate debtor. Further, the NCLAT considered even if the said could be treated as a bonafide transaction, the transaction would fall within the scope of a preferential transaction under Section 43, and therefore refused to interfere with the order of the Adjudicating Authority which had directed for the sum to be refunded to the corporate debtor.
Source: Barandbench
