Topic
NCLAT held that circumstantial evidence of removed hypothecated machinery suffices to prove fraudulent trading under Sec 66 IBC, upholding ₹17.23 crore liability against suspended directors, noting a single asset swap can trigger Sec 66 liability in context.
NCLAT clarifies that third parties, like Orix Leasing, can be held liable under Section 66 IBC for fraudulent trading if complicit in the corporate debtor's scheme. The ruling mandates a fresh hearing to assess evidence of collusion, setting a precedent for extending liability beyond directors in insolvency proceedings.
NCLAT rules that directors can be held liable under Section 66 of the IBC for fraudulent trading if they fail to deposit salary deductions meant for employee welfare, even without personal benefit. The ruling underscores directors' fiduciary duty to creditors during insolvency, expanding liability beyond traditional fraudulent intent.