(1) Where the corporate debtor has been a party to an extortionate credit transaction involving the receipt of financial or operational debt during the period within two years preceding the insolvency commencement date, the liquidator or the resolution professional as the case may be, may make an application for avoidance of such transaction to the Adjudicating Authority if the terms of such transaction required exorbitant payments to be made by the corporate debtor.
(2) The Board may specify the circumstances in which a transactions which shall be covered under sub-section (1).
Explanation.-For the purpose of this section, it is clarified that any debt extended by any person providing financial services which is in compliance with any law for the time being in force in relation to such debt shall in no event be considered as an extortionate credit transaction.
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
Section 49 Transactions defrauding creditors