NCLT Recalls Insolvency Order Against Logix Infra

New Delhi: In a rare move, NCLT has recalled and set aside its own order directing insolvency proceedings against realty firm Logix Infrastructure in July 2023, saying the plea was initiated with “fraudulent and mala fide intentions” and a collusive petition was filed by the financial creditor.

NCLT said “there is a nexus and connection” between its financial creditor Experts Realty Professionals whose plea for insolvency was initiated against Logix Infrastructure. The corporate tribunal said the entire transaction was “orchestrated” and forum was used “with purported malicious intent”. The insolvency petition filed “with an ulterior motive” against Logix Infrastructure and its financial creditor has used this forum for purposes other than the insolvency resolution of the realty firm with purported malicious intent, contrary to the objectives of the IBC, the tribunal said.

The National Company Law Tribunal (NCLT) also asked for a thorough probe by the Serious Fraud Investigation Office (SFIO) and lifting of the veil to comprehensively examine the alleged fraudulent and collusive actions. “We are of the considered view that the Section 7 application bearing IB-237(ND)/2023 filed by the financial creditor (Experts Realty Professionals) is a collusive application filed in collusion with the corporate debtor (Logix Infra) with an ulterior motive,” said NCLT.

On July 14, 2023, the NCLT had directed initiating a Corporate Insolvency Resolution Process (CIRP) against Logix Infrastructure while admitting a plea filed by Experts Realty Professionals claiming a default on repayment of debt. The NCLT on last Thursday recalled and set aside its July 2023 order and passed a new ruling “directing the Resolution Professional to hand over the management of the corporate debtor’s affairs to the ex-management/suspended board of directors of the corporate debtor”.