Section 43 Of IBC cannot be Attracted in Absence of Transaction made by Corporate Debtor: NCLAT

The National Company Law Appellate Tribunal (NCLAT) has ruled that Section 43 of the Insolvency and Bankruptcy Code (IBC) cannot be applied if there is no transaction made by the corporate debtor. Section 43 deals with the avoidance of preferential transactions during the corporate insolvency resolution process (CIRP). The ruling clarifies that for a transaction to be considered preferential, it must be made by the corporate debtor, meaning that transactions involving third parties without the debtor's involvement do not fall under the purview of Section 43. This decision provides a much-needed clarification in the application of IBC provisions during insolvency proceedings.