Chandresh Jajoo vs Vikas Garg - We are of the considered view that the issue of formation of opinion and determination of opinion on PUFE transactions cannot be examined at the threshold level on a stand-alone basis dehors the avoidance applications.

 NCLAT (2026.02.12) in Chandresh Jajoo vs Vikas Garg (Liquidator) [(2026) ibclaw.in 175 NCLAT, Company Appeal (AT) (Insolvency) No. 1713 of 2025] held that; 

• We are of the considered view that the issue of formation of opinion and determination of opinion on PUFE transactions cannot be examined at the threshold level on a stand-alone basis dehors the avoidance applications.

• The appeal is disposed of with liberty to the Appellant to advance their submissions and raise all issues including the aspects of formation and determination of opinion by the RP in respect of the avoidance applications which are already under the consideration of the Adjudicating Authority.

Excerpts of the order;

The present appeal filed under Section 61 of Insolvency and Bankruptcy Code 2016 (‘IBC’ in short) by the Appellant arises out of the Order dated 09.10.2025 (hereinafter referred to as ‘Impugned Order’) passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi Bench-III) in I.A. No. 3565/2022 in C.P. (IB) No. 900(ND)/2020. By the impugned order, the Adjudicating Authority has dismissed the I.A. No. 3565 of 2022. Aggrieved by the impugned order, the present appeal has been preferred by the Appellant-suspended Director of the Corporate Debtor-M/s Hema Engineering Industries Ltd. which was admitted into insolvency on 05.04.2021.

# 2. Making out the factual matrix of the case, submission was made by Shri Krishnendu Dutta, Ld. Sr. Counsel for Appellant that the Interim Resolution Professional who was later confirmed as the Resolution Professional (“RP” in short) has filed few avoidance applications between January 2022 and April 2022 on the strength of report submitted by the Transaction Auditor dated 08.12.2021. It was contended that these avoidance applications were submitted beyond the statutory time-lines prescribed under Regulation 35A of the IBBI (Regulation Process for Corporate Person) Regulation, 2016 which mandates the RP to form an opinion within 75 days of insolvency commencement date and make a determination thereof within 115 days and filing of the applications within 135 days. It was submitted that the avoidance applications were not only filed belatedly but submitted without the Respondent-RP having independently formed an opinion and without having made a determination of opinion thereon. The Appellant had therefore filed IA No. 3565 of 2022 seeking dismissal of the avoidance applications and for preventing the RP from moving similar applications. The Adjudicating Authority vide the impugned order has erroneously dismissed IA No. 3565 of 2022 and listed the avoidance applications for its consideration.

# 3. Assailing the impugned order, the Ld. Counsel for the Appellant submitted that they would not like to press the ground of belated filing of the avoidance applications since it is well settled that the prescribed time-lines under Regulation 35A are directory and not mandatory in nature. However, where the Adjudicating Authority had erred is that it glossed over the imperative need for satisfying itself that the RP had filed these avoidance applications only after having formed an opinion and made due determination with respect to the preferential, undervalued, extortionate and fraudulent transactions before filing these PUFE applications. It was vehemently contended that the RP could not have possibly formed an opinion with due application of mind since the RP had claimed the date of forming opinion to be 13.06.2021 and the date of determination of opinion to be 22.06.2021 while by his own admission the RP had access to relevant ERP software/accounting data of the Corporate Debtor for making an independent analysis only on 28.06.2021 which date was subsequent to the formation and determination of opinion. The Adjudicating Authority while rejecting IA No 3565 of 2022 has not returned any findings on whether the RP had applied his mind on the basis of adequate material available before it to form an opinion followed by a determination thereon whether the Corporate Debtor had been subjected to PUFE transactions. It was therefore contended that the Adjudicating Authority wrongly dismissed IA No. 3565 of 2022 and permitting the RP (now as the Liquidator) to pursue the avoidance applications. It was vehemently contended, that in the first place, the proper formation and determination of opinion by the RP needs to ascertained separately by the Adjudicating Authority before taking up the avoidance applications and hence the present appeal.

# 4. Refuting the contentions of the Appellant, it was contended by Shri Vishal Ganda, Ld. Counsel for the Respondent that the RP after duly forming an opinion, basis available inputs with regard to PUFE transactions, had circulated the same on 13.06.2021 as part of agenda for discussion in the second CoC meeting on 16.06.2021. The RP had also completed his determination of opinion by 22.06.2021. It was vehemently contended that the RP was compelled to form and determine his opinion on the basis of available inputs and surrounding circumstances as the suspended management of the Corporate Debtor was not co-operating in readily providing the information/documents etc. to the Respondent-RP which is substantiated by the fact that the RP had filed a Section 19(2) application.

# 5. We have heard the Ld. Counsels of both the parties and perused the records carefully.

# 6. We are not inclined to agree with the Appellant that the Adjudicating Authority must first decide whether there was any material for the RP to form and determine his opinion before entertaining the avoidance applications. We are of the considered view that the issue of formation of opinion and determination of opinion on PUFE transactions cannot be examined at the threshold level on a stand-alone basis dehors the avoidance applications. Since the avoidance applications are still pending consideration of the Adjudicating Authority, we do not find that any substantial purpose will be served in entertaining this appeal. The appeal is disposed of with liberty to the Appellant to advance their submissions and raise all issues including the aspects of formation and determination of opinion by the RP in respect of the avoidance applications which are already under the consideration of the Adjudicating Authority.

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