1) ¹[Where—
(a) a preferential transaction under section 43;
(b) an undervalued transaction under section 45;
(c) an extortionate credit transaction under section 50; or
(d) fraudulent or wrongful trading under section 66,
has occurred and the liquidator or the resolution professional, as the case may be, has not reported it to the Adjudicating Authority, a creditor, either by itself or jointly with other creditors, a member, or a partner of the corporate debtor, as the case may be, may make an application to the Adjudicating Authority to pass orders in accordance with the respective provisions of this Chapter or Chapter VI, as the case may be.

(2) Where the Adjudicating Authority, after examination of the application made under sub-section (1), is satisfied that the relevant transaction or trading under clause (a) or (b) or (c) or (d) of sub-section (1) has occurred, it shall pass an order, for the avoidance of such transaction or trading, as the case may be, as if such an application had been filed by a liquidator or a resolution professional in accordance with the relevant provisions of this Chapter or Chapter VI.

(3) After passing an order under sub-section (2), where Adjudicating Authority is satisfied that the liquidator or the resolution professional, as the case may be, after having sufficient information or opportunity to avail information of such transaction or trading, did not report such transaction or trading to the Adjudicating Authority, it shall pass an order requiring the Board to initiate disciplinary proceedings against the liquidator or the resolution professional, as the case may be.]

Foot Note:
1 Subs by the Insolvency and Bankruptcy Code (Amendment) Act, 2026