Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2023 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (6) TMI 194 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAIFraudulent/wrongful trading - related party transaction of not - Lands sold at a Higher Amount than at which, the same was purchased - intent of defrauding its Creditors - HELD THAT:- The expression Party to the carrying on business, indicates taking positive steps, in carrying on company’s business, in a fraudulent manner. The intent to defraud, is to be judged, by its effect on a Person, who is the object of conduct, in question - A preponderance of probability suffices, but the degree of probability must be such that the Tribunal, is satisfied and further that under Section 66 of the I & B Code, 2016, it is not essential to attract that there ought to be a Debtor and a Creditor relationship. It must be borne in mind that for proving a Fraudulent Trading needs meeting the High Standard of Proof, which is attached to a Fraudulent Intent. A Director, of a Company, may be proceeded against for a Wrongful Trading, because of the reason of Negligent Failure of Management. Besides this, a person, knowingly a Party to a Fraudulent Trading, by the Company concerned, may be subject to the proceedings - The Appellant has a duty, to establish to the satisfaction of this Tribunal, that a person, is knowingly carrying on the business with the Corporate Debtor, with an dishonest intention, to defraud, the Creditors. For a Fraudulent Trading / Wrongful Trading, necessary materials are to be pleaded by a Litigant / Stakeholder, by furnishing Requisite Facts, so as to come within the purview of the ingredients of Section 66 of the I & B Code, 2016. Suffice it, for this Tribunal, to pertinently point out that the ingredients of Section 66 (1) and 66 (2) of the I & B Code, 2016, operate in a different arena. It is crystalline clear that the transaction of Transfer of Assets, among / within the Group Companies, ex-facie, will not come within the umbrage of the Fraudulent Trading, as per Section 66 (1) of the Code, as opined by this Tribunal. Furthermore, in the instant case, the Appellant / Applicant, has made an fervent endeavour, to converse the transactions, allegedly made by the Respondents, as per Section 66 of the Code. On a careful consideration of the contentions, advanced on behalf of the Appellant, and keeping in mind of the facts and circumstances of the case, in an integral manner, and also on going through the impugned order of dismissal, passed by the Adjudicating Authority (National Company Law Tribunal, Division Bench – II, Chennai), comes to a conclusion that the Appellant / Applicant, had not established the Aspect of Fraud or Dishonest Intent, on the Respondents’ side, to the subjective satisfaction of this Tribunal. As such, the view taken by the Adjudicating Authority (National Company Law Tribunal, Division Bench – II, Chennai), preferred by the Appellant / Applicant, in dismissing the application is free from any legal errors. Consequently, the Appeal, fails. Appeal dismissed.
|