Successful RAs Can Substitute Administrators for Preferential Transactions Application After Resolution Plan Approval

Case Details: Nippon Life India Asset Management Ltd. v. Piramal Capital & Housing Finance Ltd. - [2024] 163 taxmann.com 355 (NCLAT- New Delhi)

Judiciary and Counsel Details

• Ashok Bhushan, Chairperson & Barun Mitra, Technical Member
• S. Niranjan Reddy, Sr. Adv. Amit Agrawal, Sumit Agrawal, Ms Radhika Yadav, Sahil & Ms Reaa Mehta, Advs. for the Appellant.
• Arun Kathpalia, Sr. Adv. Ms Chitra Rentala, Rajat Jariwal, Ms Shatakshi Tripathi & Aditya Dhopar, Advs. for the Respondent.

Facts of the Case

In the instant case, the appellant was an entity against whom allegations of preferential transactions were made, and an application was filed under sections 43, 44, and 46 of the IBC. An instant appeal had been filed against the order passed by the NCLT, allowing the application filed by SRA to substitute itself in place of an administrator who had filed an application under sections 43, 44, and 46 of the IBC.

The appellant argued that the applications under sections 43, 44, and 46 were filed after the CoC approved the resolution plan; hence, the substitution ought not to have been allowed.

It was noted that the issue sought to be raised was fully covered by the judgement of the Appellate Tribunal in Kapil Wadhawan vs Piramal, where appeals were filed against the same order. The Appellate Tribunal held that an application filed after the approval of the resolution plan could very well be prosecuted by SRA.

NCLAT Held

The NCLAT held that the substitution of SRA in place of administrator, having been upheld in an earlier judgment, there was no fault with the impugned order. However, it was open for the appellant, at the time of consideration of their preferential application on merit, to raise all pleas as available to oppose the transactions that had been impugned in the preferential application.

List of Cases Reviewed

• Piramal Capital & Housing Finance Ltd. v. Nippon Life India Asser Management Ltd. [2024] 163 taxmann.com 354 (NCLT -Mum.) (para 8) followed See Annex