Repayment of borrowings during look back period, after classification of account of Corporate Debtor as NPA, falls within the exception provided in Section 43(3) of IBC – Mr. Anish Niranjan Nanavaty RP of Reliance Communications Ltd. Vs. RPL Aditya Power Ltd. – NCLT Mumbai Bench
Hon’ble NCLT Mumbai Bench held that:
(i) Section 43(3) of the Code provides certain exceptions, whereby even a transaction falling within the mischief of Section 43(2) read with Section 43(4) of the Code are excluded from the scope of section 43 calling for orders u/s 44 of the Code.
(ii) Ordinarily, every borrower makes sure that the amounts borrowed are paid as and when it becomes due or with least delay. The loans taken from Respondents are stated to be paid in multiple tranches of odd amounts and the loan was repayable on demand.
(iii) Hence, such repayment of loan was in Ordinary Course of financial affairs of the Corporate Debtor as well. Since, the impugned transaction was in Ordinary Course of financial affairs of Corporate Debtor and the Respondent, we are of considered view that it squarely falls within the exception provided in Section 43(3) of the Code.