A transaction does not constitute a preferential transaction under the Insolvency and Bankruptcy Code if it does not involve a transfer of property for the benefit of a creditor.

Per:

• Prabhat Kumar, Member (Technical) 1. This Application IA 3176/2023 is filed by Dr. Mamta Binani (“Applicant”) against Rolta International INC Limited, in the matter of Rolta India Limited (Corporate Debtor) under Section 60(5) of The Insolvency and Bankruptcy Code, 2016 ("Code"), seeking following reliefs :

• a) Declare the transaction for an amount of Rs. 7,84,31,000/- (Rupees Seven Crores Eighty Four Lakhs Thirty One Thousand Only) described in Paragraph 4.6 of the present application read with the Entry Number 21 in the table available at internal Page 206 of the Report dated 14.06.2023 issued by the Transaction Auditor (extracted and reproduced as Appendix "A" to the present application) as preferential in nature in terms of Section 43 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "Code") and pass an order for avoidance of these transactions under Section 44 of the Code;

• b) Direct the Respondent No. 1-3 to pay back the amount of Rs. 7,84,31,000/- (Rupees Seven Crores Eighty Four Lakhs Thirty One Thousand Only) to the Corporate Debtor being the value of the 3 treatment prayed to be avoided in prayer clause 5.1.1 along with interest at such rate as deemed appropriate to this Hon'ble Tribunal to be paid till the actual date of payment;

2. That the Present application is being filed under Section 43 and Section 44 of Insolvency and Bankruptcy Code 2016 (hereinafter referred to as "Code") on behalf of the Resolution Professional (hereinafter referred to as the "Applicant") of Rolta India Limited (hereinafter referred to as "Corporate Debtor") for avoidance of adjustment of a credit amount of Rs. 7,84,31,000/- (Rupees Seven Crores Eight Four Lakhs Thirty One Thousand Only) appearing in the books of the Corporate Debtor receivable from the Respondent No. 1 Rolta International Inc. (hereinafter referred to as "Rolta International") against debit balance appearing in the books of the Corporate Debtor owed by the Corporate Debtor to the Respondent No. 1- Rolta Private Limited (hereinafter referred to as "RPL"). booked on 31.03.2021 falling within the lookback period commencing from 19.01.2021 to 19.01.2023 (hereinafter referred to as "Relevant Period"), in preference to the other creditors of Corporate Debtor, when the Respondent No. 3 was acting as the Managing Director (hereinafter referred to as "Relevant Transaction").

2.1. That the said transaction was identified by the professional appointed by the Applicant for reviewing of the transactions of the Corporate Debtor during the Relevant Period and on conducting further study, the Applicant has also found that the Relevant Transaction that has been identified by the professional, falls under the scope of Section 43 of the Code.

2.2. That furthermore, in the humble submission of the Applicant even as on date, (i) huge amount is appearing to be due and payable to the Corporate Debtor from the Respondent No. 1 and (i) preference has been enjoyed by the Respondent No. 2 whereby its amount due from 4 the Corporate Debtor has been reduced. Hence, consequential directions of payment of the money equivalent to the value of transactions being avoided, deserves to be passed along with interest against all the Respondents being jointly and/ or severally liable.

2.3. That the explanation provided in the response sent by the management of the Corporate Debtor to the professional appointed by the Applicant, on being notified of these transactions, also does not fall under any of the exceptions provided under Section 43 of the Code.

2.4. That hence, the present application seeking directions under Section 43 and 44 of the Code against the Respondents is being filed by the Applicant.

3. Respondent No 2 has filed reply stating that the Applicant is seeking avoidance of a "non cash based book entry", which took place in the books of Rolta India Limited ("Rolta India / Corporate Debtor"). By this non cash based book entry, the credit balance of Rolta