The ‘Template’ — which is recommendatory— is aimed to facilitate the submitting of Avoidance Transaction petitions earlier than NCLTs, to make sure uniformity and in expediting decision-making course of within the court docket, which shall in the end improve restoration by collectors.
The mentioned ‘Template’ was developed by a Examine Group constituted by IIIPI underneath the Chairmanship of Subodh Agarwal, Previous-President of ICAI, after consultations with group members, consultants and stakeholders. “The adoption of such templates by IPs would improve the standard of findings, functions, and outcomes within the context of avoidance transactions. This is able to not solely enhance efficiencies within the ecosystem but in addition assist in maximising the worth by clawing again the dues from avoidance transactions underneath IBC,” Ashok Haldia, Chairman, IIIPI-Board, mentioned.
The event of ‘Template’ is seen as a part of finest practices within the insolvency regime in India.
Below the IBC, “Avoidance Transactions” are primarily transactions undertaken by the Company Debtor previous to the initiation of the insolvency course of to defraud its collectors or to learn associated events. These are of 4 sorts – Preferential, Undervalued, Fraudulent, and Extortionate (PUFE) Transactions.
The duties of Decision Professionals /Liquidators embody, inter alia, forming anopinion, figuring out the quantities concerned and submitting an software to the Adjudicating Authority in respect of such PUFE transactions.
As per the newest information of the Insolvency and Chapter Board of India (IBBI), until March 2024 a complete of 1237 Avoidance Transaction functions amounting to ₹3.7 lakh crore had been filed earlier than NCLT, out of which solely 292 functions amounting ₹51,738 crore had been disposed by the court docket, via which solely ₹6,599 crore had been recovered by collectors.
The lengthy pendency of Avoidance Transaction petitions and low restoration has been a critical concern throughout stakeholders.
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