In a significant ruling on corporate insolvency proceedings, the Kochi Bench of the National Company Law Tribunal (NCLT) has dismissed a ₹30 lakh recovery application filed by a company’s liquidator, holding that mere non-reflection of transactions in financial records is not sufficient to establish fraud.
Case Background: Liquidator’s Fraud Allegations Under IBC Section 66(1)
The case pertained to a corporate debtor, where the liquidator alleged that the suspended managing director had misappropriated ₹30 lakh out of an advance amount of ₹50 lakh received by the company. Based on this claim, the liquidator approached the tribunal seeking recovery under Section 66(1) of the Insolvency and Bankruptcy Code (IBC), which deals…