Lawgist45Avoidance of undervalued transactions
(1) If the liquidator or the resolution professional, as the case may be, on an examination of the transactions of the corporate debtor referred to in sub-section (2) 1 *** determines that certain transactions were made during the relevant period under section 46, which were undervalued, he shall make an application to the Adjudicating Authority to declare such transactions as void and reverse the effect of such transaction in accordance with this Chapter.
(2) A transaction shall be considered undervalued where the corporate debtor—
(a) makes a gift to a person; or
(b) enters into a transaction with a person which involves the transfer of one or more assets by the corporate debtor for a consideration the value of which is significantly less than the value of the consideration provided by the corporate debtor,
and such transaction has not taken place in the ordinary course of business of the corporate debtor.
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1. The words and figures “of section 43” omitted by Act 26 of 2018, s. 28 (w.e.f. 6-6-2018).
- 33 Initiation of liquidation
- 34 Appointment of liquidator and fee to be paid
- 35 Powers and duties of liquidator
- 36 Liquidation estate
- 37 Powers of liquidator to access information
- 38 Consolidation of claims
- 39 Verification of claims
- 40 Admission or rejection of claims
- 41 Determination of valuation of claims
- 42 Appeal against the decision of liquidator
- 43 Preferential transactions and relevant time
- 44 Orders in case of preferential transactions
- 45 Avoidance of undervalued transactions
- 46 Relevant period for avoidable transactions
- 47 Application by creditor in cases of undervalued transactions
- 48 Order in cases of undervalued transactions
- 49 Transactions defrauding creditors
- 50 Extortionate credit transactions
- 51 Orders of Adjudicating Authority in respect of extortionate credit transactions
- 52 Secured creditor in liquidation proceedings
- 53 Distribution of assets
- 54 Dissolution of corporate debtor
