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2023 (1) TMI 455 - AT - Insolvency and BankruptcyFraudulent trading - Preferential transactions - Undervalued transactions - Extortionate transactions - Direction of the Adjudicating Authority to direct the appellant to pay an amount of Rs.8.95 crores outstanding in the ledger of the Corporate Debtor (CD) to the CD - defrauding the Corporate Debtor (CD) for carrying out business with dishonest intents to defraud creditors and, therefore, has to make the contribution to the assets of the CD. HELD THAT:- It is not in dispute that the appellant and the respondent company are not a related party. It is also not in dispute that an amount of Rs.8.95 crores is due and outstanding for recovery from the Apellant to the CD as both the parties agreeing that this is existing in their Balance Sheet as per accounting norms. It is the law laid down that fraud unravels of acts. In some way it is a deception to gain by another loss. It is also well settled law that the establishment of fraudulent conduct does not require the same standard of proof as in criminal trial. It is not necessary that each instance of fund being siphoned needs to be established from inception to the end and even one conduct of director of CD can depict an act of fraud. It is very much clear that it is the intention to defraud creditors at that stage Section 66 is applicable. This section empowers the Adjudicating Authority to pass an order for recovery from such fraudulent parties as contribution to the assets of the CD - we are constrained to uphold the hand of the Adjudicating Authority and is not able to agree with the Appellant. Appeal dismissed.
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