Transaction entered by Corporate Debtor voluntary or due to pressure or threat has no relevance while coming to the conclusion whether the transaction is preferential or not, the intent of Corporate Debtor is not relevant since Section 43 of IBC envisages statutory/deeming fiction – GVR Consulting Services Pvt. Ltd. Vs. Pooja Bahry – NCLAT New Delhi

NCLAT held that: (i) The submissions of the Appellant on the ground that the transaction was entered into by the Corporate Debtor due to pressure put on it has no relevance and shall not change the nature of transaction from preferential transaction. (ii) The expression “ordinary course of business” or “financial affairs of the Corporate Debtor” has to be read “ejusdem generis”. The expression “financial affairs of the Corporate Debtor” cannot be given an extended meaning. (iii) The intent of the Corporate Debtor is not relevant since the Section 43 envisages statutory fiction. Whether the Act is voluntary or not has no relevance while coming to the conclusion whether transaction is preferential or not. (iv) Judgement of the Hon’ble Supreme Court in “Anuj Jain” has clearly laid down about the irrelevance of the motive in such transaction. (v) Filing of composite application under Section 43, 44, 45, 46, 66, 67 and 60(5) of the Code does not lead to any infirmity in the Application. (vi) In Section 43(3), certain exception has been provided. Thus those transactions which fall as exception under Sub-Section (3) can be taken out of sub-section 2 of Section 43, rest shall be covered by deeming fiction.

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