Can a bank transfer assets of a bankrupt borrower to a third party at undervalued rates at the cost of other lenders or financial creditors and other claimants after a case of insolvency against such borrower has been admitted by NCLT? The answer is no. In a detailed judgement of February 20, 2020, the apex court held such transaction to be illegal which cause loss to the other stakeholders and set aside the order passed by NCLAT, while upholding the order passed by NCLT.
