NCLT ruled that a unilateral bank transfer does not qualify as a preferential transaction absent evidence of preference by the corporate debtor. The tribunal dismissed a claim against Sintex Industries on these grounds.
Avoidance Relief u/s 43 Unsustainable without Proof that Corporate Debtor Granted Preference
The NCLT has dismissed a ₹26.79 crore claim against Sintex Industries, indicating that a unilateral bank transfer is not definitive proof of a preferential transaction under Section 43 of the Insolvency and Bankruptcy Code (IBC). The tribunal ruled that there must be clear evidence showing that the corporate debtor engaged in acts demonstrating a preference.
The decision emphasizes the high standard of proof required to invoke avoidance provisions in the context of insolvency. It implies that mere financial transactions, unless coupled with elements of preferential intent by the debtor, do not suffice for claims under the IBC.
This ruling is critical for practitioners as it delineates the boundaries for asserting avoidance claims, necessitating tangible evidence of debtor preferences. Stakeholders must exercise caution when pursuing claims based on perceived preferential transactions.
Citations
- Case Name (2026) NCLT Order
