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ARTICLE · 14 DECEMBER 2022

Continuation Of Proceedings In Relation To Avoidance Transactions After Acceptance Of Resolution Plan

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As a result, applications for avoidance of PUFE transactions were considered infructuous upon conclusion of the CIRP.

IndiaInsolvency/Bankruptcy/Re-Structuring
Samiron Borkataky
Samiron Borkataky
Yaashna Thakran
Yaashna Thakran
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This write-up is a brief discussion on the continuance of proceedings in relation to avoidance of preferential, under-valued, fraudulent or extortionate transactions ("PUFE transactions")1 as defined under the Insolvency and Bankruptcy Code, 2016 ("Code"), after approval of a resolution plan.

As per the 5th report of Insolvency Law Committee, sections 43-51, 66 and 67 of the Code which deal with avoidance of PUFE transactions, are amongst others primarily aimed at swelling the asset pool that is available for distribution to creditors and preventing unjust enrichment of one party at the expense of other creditors.

In tandem with such aim, regulation 40A of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ("CIRP Regulations") requires the resolution professional to determine PUFE transactions on or before the 115th day from the commencement of the corporate insolvency resolution process ("CIRP"),

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