Fraudulent intent not necessary for preferential transaction u/s 43 of IBC: NCLT [Read Order]

The Mumbai Bench of the National Company Law Tribunal (NCLT) clarified that under Section 43 of the Insolvency and Bankruptcy Code, 2016 (IBC), fraudulent intent is not necessary to establish a preferential transaction. \r

The case involved M/s Mahavir Roads and Infrastructure Private Limited, where the Resolution Professional filed applications seeking relief against transactions deemed preferential under Section 43. The Tribunal, comprising Prabhat Kumar (Member - Technical) and Justice V.G. Bisht (Member - Judicial), emphasized that transactions benefiting related parties could be considered preferential under Section 43(4) of the IBC, irrespective of fraudulent intent. \r

It further noted that transactions conducted in the ordinary course of business are exempt from scrutiny under Section 43(3), provided they are customary for both the Corporate Debtor and the recipient. The ruling underscores the Resolution Professional's duty to safeguard the Corporate Debtor's assets amid insolvency proceedings.