This judgment is about the Bombay High Court refusing to hold ex-directors personally liable under Section 542 of the Companies Act, 1956, for carrying on business after winding up, as the minimal revenue from scrap sales did not establish an intent to defraud creditors.

Case Snapshot

• Case Name: The Official Liquidator of Morya Grain Distilleries Pvt. Ltd. (In Liquidation) v. Praj Industries Limited & Ors.

• Citation / Neutral Citation: Official Liquidator Report No. 26 of 2022; 2026:BHC-OS:24289

• High Court: High Court of Judicature at Bombay

• Bench: Hon’ble Mr. Justice Somasekhar Sundaresan

• Date of Judgment: 04.11.2026

• Area of Law: Company Law; Section 542 of the Companies Act, 1956 (Liability for fraudulent conduct of business)

Judgment Headline

Bombay High Court Rejects Section 542 L

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