NCLT Orders Directors to Repay Over Rs. 10 Crore for Fraudulent Transactions

Directors of Opulent Infradevelopers Pvt. Ltd. held liable under Section 66 of the Insolvency and Bankruptcy Code for financial mismanagement and fraudulent activities.

In a significant ruling, the National Company Law Tribunal (NCLT) New Delhi Bench has directed the directors of Opulent Infradevelopers Pvt. Ltd. to jointly and severally contribute a staggering sum of Rs. 10,46,58,571.95 to the company's assets. The decision, dated November 4, 2025, came after the Tribunal found the directors guilty of fraudulent transactions, including unjustified donations, interest-free loans, and falsification of books.

The case was initiated by Devendra Umrao, the Resolution Professional of Opulent Infradevelopers, who filed the application under Section 66 of the Insolvency and Bankruptcy Code, 2016. The Tribunal scrutinized several transactions conducted by the directors that were deemed to have defrauded the creditors of the Corporate Debtor.

The Tribunal found that a donation of Rs. 3.10 crore was made by the company to non-business entities, which was unjustified given the company's financial distress. Additionally, interest-free loans amounting to Rs. 12.34 crore were extended without any business rationale, causing a loss of Rs. 1.33 crore in potential interest income. Furthermore, Rs. 1.06 crore was falsified through unauthorized adjustment entries, and Rs. 4.96 crore was booked as false or non-business-related expenses.

The NCLT, led by Member (Judicial) Shri Manni Sankariah Shanmuga Sundaram and Member (Technical) Shri Atul Chaturvedi, held that these actions were carried out with the intent to defraud creditors. The Tribunal directed the directors to repay the amounts to the company's assets within 15 days, emphasizing the need for accountability and integrity in corporate governance.

This judgment underscores the rigorous scrutiny applied by the NCLT in cases of financial misconduct and fraudulent trading, reinforcing the provisions of the Insolvency and Bankruptcy Code to protect creditors' interests.

Bottom Line:

Insolvency and Bankruptcy Code, 2016 - Section 66 - Contributions directed from directors for fraudulent transactions, including unjustified donations, non-collection of interest, falsification of books, and booking false/non-business-related expenses.

Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Section 66, Section 67

Devendra Umrao v. Amit Kumar Dubey, (NCLT)(New Delhi Bench) : Law Finder Doc Id # 2815711