Transaction Audit Report is Sufficient to File Application for Avoidance of Preferential Transactions u/s 43 of IBC: NCLAT

The National Company Law Appellate Tribunal (NCLAT) ruled that a transaction audit report is sufficient for filing an application for the avoidance of preferential transactions under Section 43 of the Insolvency and Bankruptcy Code (IBC). The decision highlights that a thorough audit report is a valid tool for identifying preferential transactions that may be subject to avoidance during insolvency proceedings. This ruling strengthens the legal framework under the IBC by providing clarity on the procedural requirements for initiating the avoidance process, which aims to ensure fair treatment of creditors in insolvency matters.