For establishing the fraudulent purpose under Section 66 of IBC, it must be shown that the Ex-Directors of the Corporate Debtor knew that the Company was insolvent but continued to run business with dishonest intentions – Mr. Shibu Job Cheeran, Suspended Director of CD Vs. Mr. Ashok Velamur Seshadri, Liquidator of M/s. Archana Motors Ltd. – NCLAT Chennai

NCLAT observes that the following elements need to be established for success of Section 66 Application, namely, (i) Business of the Corporate Debtor has been carried out with an intent to defraud the creditors. (ii) Directors participated in carrying on business of the Corporate Debtor despite knowing likely insolvency of the Corporate Debtor.

Related Posts:

If any Public depositor applies showing due of the debt claiming itself as operational creditor and the Resolution Professional or the Tribunal do not accept the claim on the ground that they are not financial creditor, we allow the appellant to raise the question before the Tribunal and if any adverse decision is given by the Tribunal, it will be open to the appellant to raise the issue before NCLAT- Hind Motors India Ltd. Vs. Adjudicating Authority NCLT, Chandigarh – NCLAT New Delhi

IBC-Case Laws-NCLAT
Scroll to Top