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of <h1>IBC Section 66 Targets Fraudulent Trading: Directors Liable for Losses if Insolvency Ignored; 2020 Amendment Suspends Some Claims</h1> Section 66 of the Insolvency and Bankruptcy Code (IBC), 2016, addresses fraudulent and wrongful trading by corporate debtors. Section 66(1) allows adjudicating authorities to order contributions to corporate assets if a business is conducted to defraud creditors. Section 66(2) targets directors or partners who knew insolvency was unavoidable yet failed to minimize creditor losses, making them liable for contributions. Section 66(3), introduced by the 2020 amendment, suspends applications under Section 66(2) for defaults occurring after March 25, 2020. A relevant case, Axis Bank Ltd. vs. Anuj Jain, involved the setting aside of an order due to lack of evidence of fraud.
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