66. (1) If during the corporate insolvency resolution process or a
liquidation process, it is found that any business of the corporate debtor
has been carried on with intent to defraud creditors of the corporate debtor
or for any fraudulent purpose, the Adjudicating Authority may on the
application of the resolution professional pass an order that any persons
who were knowingly parties to the carrying on of the business in such manner
shall be liable to make such contributions to the assets of the corporate
debtor as it may deem fit.
(2) On an application made by a resolution professional during the corporate
insolvency resolution process, the Adjudicating Authority may by an order
direct that a director or partner of the corporate debtor, as the case may
be, shall be liable to make such contribution to the assets of the corporate
debtor as it may deem fit, if-
(a) before the insolvency commencement date, such director or partner knew
or ought to have known that the there was no reasonable prospect of avoiding
the commencement of a corporate insolvency resolution process in respect of
such corporate debtor; and
(b) such director or partner did not exercise due diligence in minimising
the potential loss to the creditors of the corporate debtor.
Explanation.-For the purposes of this section a director or partner of the
corporate debtor, as the case may be, shall be deemed to have exercised due
diligence if such diligence was reasonably expected of a person carrying out
the same functions as are carried out by such director or partner, as the
case may be, in relation to the corporate debtor.