(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) of section 43 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.
Insolvency and Bankruptcy Code 2016
Section 41 Determination of valuation of claims
Section 42 Appeal against the decision of liquidator
Section 43 Preferential transactions and relevant time
Section 44 Orders in case of preferential transactions
Section 45 Avoidance of undervalued transactions
Section 46 Relevant period for avoidable transactions
Section 47 Application by creditor in cases of undervalued transactions
Section 48 Order in cases of undervalued transactions