IBC 65 — Fraudulent or malicious initiation of proceedings

Insolvency & Bankruptcy Code, 2016

Statutory text

(1) If, any person initiates the insolvency resolution process or liquidation proceedings fraudulently or with malicious intent for any purpose other than for the resolution of insolvency, or liquidation, as the case may be, 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.
(2) If, any person initiates voluntary liquidation proceedings 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.

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