Imp. Rulings - Section 43 - Net Reduction of antecedent debt in Look Back Period
Index;
NCLT Mumbai (2025.11.06) in Kamal Kishor Gurnani vs Mr. Sushil Sahani & Ors. [(2025) ibclaw.in 2563 NCLT, [IA 238 of 2023 in CP (IB) 3923/MB/C-1/2019]
NCLT Mumbai (2026.07.22) in Punjab National Bank vs Geeta Mercantile Pvt. Ltd. and Ors. [(2026) ibclaw.in 2754 NCLT, MA 4064 of 2019 in Company Petition No. 1239 of 2018]
NCLT Kochi (2026.01.06) in CA Sreenivasan P R RP of Aston Properties and Developers Private Limited Vs. Astern Realtors Private Limited & Ors. [IA(IBC)/239/KOB/2025 in CP(IBC)/12/KOB/2024]
NCLT Mumbai-1 (2024.05.22) in Mr. Ankur Kumar Vs. Mr. Jitendra Kikavat & others [I.A. 2020 of 2020 In C.P.(IB) No. 2300/MB/2018]
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NCLT Mumbai (2025.11.06) in Kamal Kishor Gurnani vs Mr. Sushil Sahani & Ors. [(2025) ibclaw.in 2563 NCLT, [IA 238 of 2023 in CP (IB) 3923/MB/C-1/2019] held that;
# 11(c). In our considered view, the deeming fiction in terms of Section 43 of the Code has been enacted to preserve and protect the total corpus available to the creditors of Corporate Debtor during look back period and the beneficial treatment resulting from a payment made to any creditor during such look back period has to be determined after taking into consideration of receipt of money from such creditor during such look back period also. Accordingly, we do not find any merit in the prayer of applicant in relation to this transaction, as it does not fall within scope of Section 43 of the Code.
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NCLT Mumbai (2026.07.22) in Punjab National Bank vs Geeta Mercantile Pvt. Ltd. and Ors. [(2026) ibclaw.in 2754 NCLT, MA 4064 of 2019 in Company Petition No. 1239 of 2018] held that;
# 28. This Tribunal has to ascertain whether there was an antecedent debt due to creditor and the payment was made towards such antecedent debt, and it is not clear from the summary of account placed in transaction audit report as to what was status as on commencement of look back period in each creditor’s account and if any payment or any material was subsequently received back from such party. In our considered view the net reduction in amounts payable to the party alleged to have been paid in preference can only be impugned in section 43 of IBC, as such net reduction only results into preference to such party.
# 29. In view of non-availability of such ledger accounts, this tribunal is unable to hold that the transfer of receivables from one respondent to another respondent was towards antecedent debt and such transfer was within look back period. Hence, no order in terms of section 43 can be passed in relation to transactions at sub-para k, m, q, r & t of para 9(ii) also.
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NCLT Kochi (2026.01.06) in CA Sreenivasan P R RP of Aston Properties and Developers Private Limited Vs. Astern Realtors Private Limited & Ors. [IA(IBC)/239/KOB/2025 in CP(IBC)/12/KOB/2024] held that;
# 45. The avoidance provisions are intended to neutralise the preferential effect of a transaction and restore the Corporate Debtor’s estate to the position it would have occupied but for such preference, and not to impose a punitive liability on the beneficiary. In the present case, while the Corporate Debtor made preferential payments and asset transfers aggregating to Rs. 15,24,10,709/- in favour of Respondent No.1 during the look-back period, it is simultaneously evident that Respondent No.1 infused additional funds and incurred expenses amounting to Rs. 7,31,75,140.50/- during the same period for the benefit of the Corporate Debtor, which were duly recorded as unsecured loans. To avoid unjust enrichment of the Corporate Debtor and to give effect to the true intent of the avoidance provisions, the said amount of Rs. 7,31,75,140.50/- is liable to be adjusted against Rs. 15,24,10,709/. After such adjustment, the net preferential benefit derived by Respondent No.1 is quantified at Rs. 7,92,35,568.50/-, which alone is liable to be refunded to the Corporate Debtor in terms of Section 44 of the Code.
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NCLT Mumbai-1 (2024.05.22) in Mr. Ankur Kumar Vs. Mr. Jitendra Kikavat & others [I.A. 2020 of 2020 In C.P.(IB) No. 2300/MB/2018] held that;
“There is no need to prove any fraudulent intent for a preferential transaction. When we look into the scheme of Section 43 of the Code, subsection (2), a clear statutory provision is that a corporate debtor shall be deemed to have given a preference if conditions as mentioned in paragraph ‘a’ and ‘b’ are fulfilled.
When a provision provides for deeming fiction, ‘deeming fiction’ come into play on fulfilment of the requirement even if in fact it may not be so. In sub-section (3) of Section 43, certain exception has been provided. Thus those transactions which fall as exception under Sub- Section (3) can be taken out of sub-section 2 of Section 43, rest shall be covered by deeming fiction”.
In the present case, it can not be said that it is in ordinary course of business of the recipient of the preference to realise their debts, particularly when the Corporate Debtor, a related party, is under financial stress.
However, we are of considered view that the net amounts received during the look back period shall only be said to be resulting into preference.
Further, in relation to Karan J Kikavat Respondent in IA 1402/2020, the Applicant has explained that the amount withdrawn by this person was adjusted against the various Earnest Money Deposit (EMD) and tender fees paid by him on behalf of Corporate Debtor and all the EMD’s are still outstanding in the books of accounts of Corporate Debtor, hence, this appropriation was in nature of reimbursements, and do not result into preference having been given to this person.
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