Six-Phase Protocol explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
A structured methodology is what separates a forensic finding from an allegation. The six-phase protocol takes an investigation from a list of suspicious entries to an evidence-based case capable of surviving cross-examination.
The six phases
| Phase | What it does |
|---|---|
| 1. Map and screen | Map and screen the relevant transactions and information, then obtain and authenticate the documents — ensuring the records relied on are correct, proper and sufficiently reliable |
| 2. Identify and preserve evidence | Identify relevant documents, financial records, digital data, emails and other sources; collect and preserve evidence systematically while maintaining proper chain of custody |
| 3. Trace the beneficiary | Identify who received the money or benefit arising from a transaction |
| 4. Test the value | Examine whether the value disclosed or attributed to a transaction is accurate |
| 5. Reconstruct the decision | Examine whether the decision was appropriate, correct and fair at the relevant point in time, and whether any preferential element was involved |
| 6. Establish the pattern | Connect individual transactions to a broader pattern of conduct |
The second phase requires evidence to be collected and preserved systematically while maintaining proper chain of custody. In an insolvency that is not a formality.
Digital data, emails and server images are the material most likely to be challenged, and a respondent who can show that records passed through uncontrolled hands does not need to answer what they contain. The six-phase protocol places authentication and preservation before tracing and analysis for exactly that reason — analysis of material that cannot be authenticated produces findings that cannot be used.
Why the order matters
Each phase depends on the one before it, and skipping ahead produces work that has to be redone:
- Tracing a beneficiary through records that were never authenticated establishes nothing.
- Testing value without knowing who benefited misses the related-party dimension that determines the look-back.
- Reconstructing a decision before testing the value leaves the central question — whether the price was right — unanswered.
- Alleging a pattern before the individual transactions are established is assertion, not evidence.
Reconstructing the decision — the hardest phase
Phase five asks whether the decision was appropriate, correct and fair at the relevant point in time. Two words in that formulation carry the weight.
"At the relevant point in time" requires the investigation to resist hindsight. A sale that looks underpriced today may have been reasonable in the market conditions of three years ago, and section 45 requires consideration significantly less than what was given — not merely less than what could have been obtained with better timing.
"Preferential element" connects the phase directly to section 43, where the test is not whether the payment was justified but whether it put the recipient in a better position than the section 53 waterfall would have.
Establishing the pattern
The final phase exists because individual transactions may not establish the complete factual position unless connected to a broader pattern of conduct or transaction activity.
A single payment to a related entity is explicable. Forty such payments, each below an approval threshold, each followed within days by an onward transfer, each to entities sharing a registered address, are not — and the pattern is frequently the only thing that converts a set of individually defensible transactions into a section 66 case.
What the protocol produces
Applied end to end, the six-phase protocol yields the elements an avoidance application actually needs: the transaction with its look-back period, the identity and relationship of the beneficiary, the basis of market value, the RP's determination, and the documents — statements of account, bank statements, balance sheets, the list of creditors — attached in support.
Common mistakes
- Analysing data before authenticating it.
- Handling digital evidence without a chain of custody record.
- Judging a past decision by present-day values.
- Reporting individual transactions without connecting them into a pattern.