Natural justice challenge failed as Section 66(1) was treated as an independent fraudulent trading provision.

Repeated hearing opportunities and the appellant's participation at multiple stages defeated the plea of procedural unfairness, so the request to recall the order on natural justice grounds failed. Section 66(1) of the Insolvency and Bankruptcy Code was treated as a standalone fraudulent trading provision, operating independently of Section 66(2). On the facts, the sale of related-party shares at a sharply reduced value after an earlier higher-value purchase was found to show conduct carried on with intent to defraud creditors, justifying a contribution order.

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Issues: (i) Whether the appellant was denied a fair opportunity of hearing, warranting recall or interference on grounds of natural justice; (ii) Whether Section 66(1) of the Insolvency and Bankruptcy Code, 2016 operates independently of Section 66(2), and whether the facts established fraudulent trading justifying contribution.

Issue (i): Whether the appellant was denied a fair opportunity of hearing, warranting recall or interference on grounds of natural justice.

Analysis: Repeated opportunities had been afforded before the adjudicating authority, and the record showed that the appellant had participated in the proceedings at multiple stages. The plea of non-appearance and inability to file written submissions was found to be insufficient, especially in view of the repeated adjournments and the recording of submissions in the impugned order. The record did not establish any procedural unfairness that would justify recall or vitiate the order.

Conclusion: The plea of violation of natural justice was rejected and is against the appellant.

Issue (ii): Whether Section 66(1) of the Insolvency and Bankruptcy Code, 2016 operates independently of Section 66(2), and whether the facts established fraudulent trading justifying contribution.

Analysis: Section 66(1) and Section 66(2) were treated as distinct and independently workable provisions, with Section 67 reflecting that orders may be passed under either sub-section. The disjunctive structure of the provision was held to mean that Section 66(1) could be invoked without importing the conditions of Section 66(2). On the facts, the corporate debtor had purchased shares of a related party at a substantially higher value and later sold them at a much lower value to the appellant, resulting in substantial loss. This conduct was found to establish that the business had been carried on with intent to defraud creditors, attracting Section 66(1).

Conclusion: Section 66(1) was held to be independently invocable, and the finding of fraudulent trading and liability to contribute was upheld against the appellant.

Final Conclusion: The challenge to the order directing contribution failed, and the impugned findings were sustained in full.

Ratio Decidendi: Section 66(1) of the Insolvency and Bankruptcy Code, 2016 is a standalone fraudulent trading provision that can be invoked on proof that the corporate debtor's business was carried on with intent to defraud creditors, without importing the separate conditions governing Section 66(2).

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