New Delhi, Feb 9 (PTI) In an unusual decision, the National Company Law Tribunal (NCLT) has overturned its own July 2023 ruling that initiated insolvency proceedings against Logix Infrastructure, citing that the application was filed with “fraudulent and mala fide intentions” and was collusive in nature. The NCLT highlighted a “nexus and connection” between the financial creditor, Experts Realty Professionals, and Logix Infrastructure, indicating that the entire situation was “orchestrated” and that the tribunal was misused “with purported malicious intent.”
The tribunal stated that the insolvency petition was filed “with an ulterior motive” and that the financial creditor had exploited the forum for purposes other than the intended insolvency resolution, which contradicts the objectives of the Insolvency and Bankruptcy Code (IBC). The NCLT has called for a comprehensive investigation by the Serious Fraud Investigation Office (SFIO) to thoroughly examine the alleged fraudulent and collusive activities.
The NCLT expressed its belief that the application submitted under Section 7, IB-237(ND)/2023, by Experts Realty Professionals was collusive and aimed at undermining the corporate debtor, Logix Infrastructure. Initially, on July 14, 2023, the NCLT had approved the initiation of a Corporate Insolvency Resolution Process (CIRP) against Logix Infrastructure based on a claim of default in debt repayment by Experts Realty Professionals.
In its recent ruling, the NCLT has rescinded the July order and instructed that the management of Logix Infrastructure be returned to its previous management or suspended board of directors. If any resolution plan has been submitted by a successful bidder, the Resolution Professional is mandated to refund the earnest money deposit and performance bank guarantee within one week. Additionally, the financial creditor is required to cover all costs, fees, and expenses of the Resolution Professional within the same timeframe.
The tribunal has also imposed a penalty of ₹5 lakh on the financial creditor, which must be deposited into the Prime Minister’s National Relief Fund (PMNRF) within ten days. This latest order follows a request from allottees of the Logix Blossom Country project, who argued that the insolvency process was initiated with fraudulent intentions to deceive creditors and flat allottees, identifying two key individuals as related parties. Hemant Sharma, an Additional Director at Experts Realty Professionals, served as the financial creditor from May 12, 2020, to September 5, 2020.