NCLAT held that: (i) A pre-ponderance of probability will suffice in respect of an offence of fraudulent trading under Section 66 of the Code is sufficient but the probability must be such that it must satisfy the subjective conscience of the Adjudicating Authority. (ii) In law, a Company or other entity which is involved in or assist and benefits from the offending business or benefits from business in an offending manner, does so knowingly and dishonestly can be held liable for a fraudulent trading. (iii) Time period, as CIRP Regulation 35A, Resolution Professional is to form an opinion within 75 days of the CIRP and made determination within 115 days and is to file an application within 135 days from the date of commencement of CIRP is not a mandatory one but only directory in character. (iv) In law a fraudulent intent is to be proved after a careful examination of all materials / evidence, as the case may be. If a fraudulent intent or fraudulent purpose is made out the liability must follow. An action can also lie, when there is a fraudulent purpose upon the customers of the Company. The Burden of Proof is the same as in a civil case where serious allegations of misconduct such as fraud are in issue. In an isolated fraud case, an Individual Tort Action(Civil Wrong) will lie.
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