The NCLT directs a ₹24.45 crore repayment with 12% interest following a ruling on fraudulent transactions, emphasizing creditor protection and director accountability in insolvency matters.
NCLT Orders ₹24.45 Crore Repayment
The National Company Law Tribunal (NCLT) has ordered the repayment of ₹24.45 crore along with 12% interest after finding that the transaction was fraudulent. This ruling emphasizes the tribunal's commitment to protecting creditors and holding suspended directors accountable during insolvency proceedings.
In its decision, the court referenced Section 66 of the Insolvency and Bankruptcy Code (IBC), which allows for recovery of advances that were improperly written off. By categorizing the deal as fraudulent, NCLT seeks to ensure that the interests of creditors are safeguarded against deceitful practices.
This order illustrates an important precedent for situations where dubious agreements are made, stressing that fraudulent activities will not be tolerated and can lead to significant financial liabilities for directors involved. Legal practitioners should note the implications of this ruling when advising clients on director responsibilities and when structuring financial deals.
Citations
- NCLT (2026) Miscellaneous Application 123/2026
