NCLAT: Only RP or Liquidator Can File plea u/s 43 of IBC: NCLAT Dismisses Homebuyer’s Application

The National Company Law Appellate Tribunal (NCLAT) has clarified that only a Resolution Professional (RP) or a liquidator has the authority to file an application to avoid preferential transactions under Section 43 of the Insolvency and Bankruptcy Code (IBC). The NCLAT dismissed an application filed by a group of homebuyers who had sought to challenge certain transactions as preferential. Preferential transactions are those made by a corporate debtor just before insolvency that favor one creditor over others. The appellate tribunal held that while homebuyers and other creditors can bring such transactions to the notice of the RP, they do not have the 'locus standi' or the right to file the application themselves. This ruling streamlines the insolvency process, ensuring that all such avoidance applications are routed through the RP or liquidator, who acts on behalf of all creditors collectively.