Deciding two connected writ petitions arising from a common Industrial Tribunal Award, the Delhi High Court set aside the Tribunal's direction granting hotel workmen a further…
Labour Laws
06/09/20264 min read
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Informative
NCLAT Delhi: Proceedings U/S 66 Of IBC For Fraudulent Or Wrongful Trading Can Be Initiated Against Third Parties
Insolvency & Bankruptcy Code
The NCLAT Delhi, with Justice Rakesh Kumar Jain and Mr. Ajai Das Mehrotra, held that Section 66 of the Insolvency and Bankruptcy Code (IBC) permits initiating proceedings against third parties for fraudulent or wrongful trading. \r
In the case of Royal Refineries Pvt. Ltd., facing disruption due to a Department of Revenue Intelligence (DRI) search, the Corporate Insolvency Resolution Process (CIRP) began on 13.11.2019. The Resolution Professional (RP) filed an application citing transactions totaling Rs. 158.07 crores with Royal India Corporation Limited. NCLT Mumbai ordered the return of Rs. 119.08 crores to the Corporate Debtor. \r
NCLAT upheld this, noting that the Appellant and the Corporate Debtor, both managed by the same individuals, were not distinct entities and upheld NCLT's order based on the Supreme Court's precedent in Phoenix Arc (P) Ltd. vs. Spade Financial Services Ltd.
