NCLT Overturns Ruling: A Case of Collusion in Logix Infrastructure Insolvency?

The NCLT has overturned its July 2023 insolvency ruling against Logix Infrastructure, citing fraudulent intentions behind the plea by financial creditor Experts Realty Professionals. The tribunal highlighted collusive actions, ordering a serious investigation and imposing a penalty. Key insights involve questionable related party transactions and document authenticity.

In a significant development, the National Company Law Tribunal (NCLT) has reversed an earlier order initiating insolvency proceedings against realty firm Logix Infrastructure. The tribunal cited that the insolvency plea, filed by financial creditor Experts Realty Professionals, was motivated by fraudulent and mala fide intentions.

NCLT noted a connection between Experts Realty Professionals and Logix Infrastructure, suggesting a collusive application was initiated. The tribunal's findings prompted a call for a detailed investigation by the Serious Fraud Investigation Office to fully uncover the alleged fraudulent activities.

The tribunal also annulled the insolvency process and mandated return of earnest money to bidders along with imposing a Rs 5 lakh penalty on the financial creditor, to be paid to the Prime Minister's National Relief Fund. Further, it noted potential irregularities in related party transactions involving key managerial staff changes.

(With inputs from agencies.)