The NCLT found that the entire transaction was “orchestrated” and that the insolvency forum was misused with “purported malicious intent.” It stated that the petition was filed for purposes other than resolving insolvency, which goes against the objectives of the Insolvency and Bankruptcy Code (IBC).

Highlighting serious irregularities, the tribunal directed a thorough investigation by the Serious Fraud Investigation Office (SFIO) to uncover the extent of the alleged collusive actions. It also ordered the lifting of the corporate veil to examine the financial transactions and motives behind the insolvency plea.

“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 Infrastructure) with an ulterior motive,” the tribunal stated in its order.

On July 14, 2023, the NCLT had admitted the insolvency plea against Logix Infrastructure, initiating the Corporate Insolvency Resolution Process (CIRP) based on the financial creditor’s claim of default. However, in its latest ruling issued last Thursday, the tribunal recalled and set aside this order. It further instructed the Resolution Professional to hand over control of Logix Infrastructure back to its ex-management and suspended board of directors.

If any resolution plan had been submitted by a successful bidder, the tribunal directed the Resolution Professional to refund the earnest money deposit and performance bank guarantee within one week. Additionally, it ordered the financial creditor to bear all costs, fees, and expenses incurred by the Resolution Professional, with payments to be made within a week.

In a stern action, the NCLT also imposed a penalty of Rs 5 lakh on Experts Realty Professionals, directing the firm to deposit the amount in the Prime Minister’s National Relief Fund (PMNRF) within ten days of the order.

The tribunal’s decision came after an application by homebuyers of Logix Blossom Country, a project of Logix Infrastructure, who argued that the insolvency proceedings were initiated with fraudulent and malicious intent to defraud creditors and flat allottees.