Can proceedings under Section 66 of IBC, 2016 for fraudulent trading or wrongful trading be initiated against the third parties? – Royal India Corporation Ltd. Vs. Mr. Nandkishor Vishnupant Deshpande, RP for Royal Refinery Pvt. Ltd. and Ors. – NCLAT New Delhi
Hon’ble NCLAT held that as per provisions of Section 66(1) of IBC, the Adjudicating Authority can pass an order directing “any person”, who was party to carrying on the business of Corporate Debtor in such manner as to defraud creditors of the Corporate Debtor, or for any fraudulent purpose, to make him liable to make such contribution to the assets of the Corporate Debtor as it may deem fit. A plain reading clearly shows that action can be taken against ‘any person’ for recovery of amount involved in the fraudulent transaction.