Document Fragment View

Matching Fragments

(b) with the intent to defraud any person, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees, but may extend to one crore rupees."

16. Necessary ingredients, which required to be proved under Section 65, sub-section (1) are that proceedings are initiated fraudulently or with malicious intent for any purpose other than for the resolution of insolvency. Both expression - fraudulent and malicious has definite connotation. The expression 'fraudulently' has been explained in Advanced Law Lexicon by P Ramanatha Aiyar 6th Edition in following words:

"Person does a thing fraudulently if he does it with an intent to defraud, and so to constitute fraud two elements are necessary - deceit, and injury and loss to some person."

Company Appeal (AT) (Insolvency) No. 1953 of 2024 14

17. Another expression which occurs in Section 65 is 'malicious intent'. Advanced Law Lexicon by P Ramanatha Aiyar define the world 'malice' in the legal sense in following words:

"32. The word fraudulent has been defined by "Advanced Law Lexicon" in following words:
Company Appeal (AT) (Insolvency) No. 1953 of 2024 18 "Person does a thing fraudulently if he does it with an intent to defraud, and so to constitute fraud two elements are necessary--- deceit, and injury and loss to some person."

33. The Hon'ble Supreme Court in (2011) 8 SCC 613 - Ramesh Kumar and Anr. Vs. Furu Ram and Anr. had occasion to consider the definition of 'fraud'. In paragraph 17 and 19, following has been observed:

19. Differently nuanced contextual meanings of the word "fraud" are collected in P. Ramanatha Aiyar's Advanced Law Lexicon (3rd Edn., Vol. 2, pp. 1914-15). We may extract two of them:

Company Appeal (AT) (Insolvency) No. 1953 of 2024 19 "Fraud, is deceit in grants and conveyances of lands, and bargains and sales of goods, etc. to the damage of another person which may be either by suppression of the truth, or suggestion of a falsehood. (Tomlin) * * *