The NCLT Mumbai ruled that a director diverted rental income through forged agreements. The Tribunal mandated a refund with interest and referred the case to the IBBI.
NCLT Orders Director to Refund Diverted Rental Income
The National Company Law Tribunal (NCLT) Mumbai has ordered a director to refund rental income that was diverted from corporate debtor properties via forged leave and license agreements. The Tribunal directed that the refunded amounts would accrue interest at the rate of 12%.
In its ruling, the NCLT highlighted the seriousness of the misconduct, reinforcing the legal responsibility of directors in managing corporate assets properly. In light of the fraudulent activities, the Tribunal deemed it necessary to refer the matter to the Insolvency and Bankruptcy Board of India (IBBI) for further action.
This decision emphasizes the accountability of directors in financial management and the legal repercussions of engaging in deceptive practices. For legal practitioners, this ruling underlines the importance of thorough due diligence in corporate governance matters.
Citations
- NCLT Mumbai (2026) 0 NCLT 0
