Ins. by Act 26 of 2021, s. 10 (w.e.f. 4-4-2021). — THE INSOLVENCY AND BANKRUPTCY CODE, 2016 Last Update 18-8-2021

1. Ins. by Act 26 of 2021, s. 10 (w.e.f. 4-4-2021). 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 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.

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