Proceeding on fraudulent transactions under 66 of IBC can be initiated even in the absence of any Transaction Audit. IRP have the power to collect information and furnish a detailed analysis to the Adjudicating Authority – Mr. Nitin Bharal Ex-Director/Promoter Vs. Stockflow Express Pvt. Ltd. Through Liquidator, Mr. Sanjay Gupta – NCLAT New Delhi
May 9, 2022
NCLAT held that the contention of the Learned Counsel for the Appellant that there was no Transaction Audit and hence the Adjudicating Authority ought not to have given a finding of fraudulent transaction under Section 66 of the Code is unsustainable. If the IRP/RP has prima facie suspicion of any fraudulent transactions, as defined under the Code, have a recourse to approach the Adjudicating Authority for necessary action. To reiterate, the debts written off to defraud the Creditors, the cash transaction post their resignation evidencing their financial control in the affairs of the Corporate Debtor, clearly establish that they are fraudulent transaction done with a wilful intention of financial gain at the cost of negatively effecting the Creditors.