NCLAT Upholds Recall of Insolvency Case Against Logix Infrastructure
The National Company Law Appellate Tribunal (NCLAT) has upheld the decision to recall a Corporate Insolvency Resolution Process (CIRP) against real estate firm Logix Infrastructure, deeming the debt claim as fraudulent and malicious.
InsolvencyNclatLogix InfrastructureIbcFraudReal Estate NewsSep 14, 2025
A two-member NCLAT bench stated that the plea for CIRP against Logix Infrastructure, which was developing the Blossom County project in Noida Sector 137, was based on collusion and malicious intent with sufficient material to support the claim.
In the facts and circumstances of the case, the bench found no infirmity in the orders of the adjudicating authority (NCLT) allowing the Section 65 application filed by the Respondents. The bench noted that reversing Section 7 proceedings does not amount to a review in the guise of a fresh determination.
Section 65 of the Insolvency & Bankruptcy Code (IBC) allows the NCLT to set aside insolvency proceedings filed with a malicious intent to defraud or gain an unfair advantage under Section 7 or Section 9. Penalties ranging from Rs 1 lakh to Rs 1 crore can be imposed on those individuals or entities involved.
On February 6, 2023, the Delhi bench of NCLT recalled its earlier order passed on July 14, 2023, directing the initiation of CIRP against Logix Infrastructure and imposed a penalty of Rs 55 lakh. The NCLT found that the financial creditor, Expert Realty Professionals, and the corporate debtor, Logix Infra, were connected parties.
The NCLT direction came after a petition filed by a homebuyers' association, which alleged collusion between the financial creditor and debtor. The NCLT order was challenged before the appellate tribunal by Expert Realty Professionals.
The NCLAT dismissed the appeal and upheld the findings of the tribunal, stating that the realty firm and its financial creditor used this forum for purposes other than insolvency resolution of the Corporate Debtor with purported malicious intent, contrary to the objectives of the IBC, 2016.
The appellate tribunal, in its 30-page order, also noted the NCLT's finding that the loan transaction between Expert Realty and Logix Infrastructure was not genuine and that the financial arrangement was fraudulent or malicious in nature. The tribunal highlighted several instances of collusion between the two entities.
Moreover, the tribunal noted overlapping roles of directors. One of the directors of Logix held the position of Additional Director in Experts Realty from May 12, 2020, to September 5, 2020. He resigned on September 5, 2020, and joined Logix just six days later as the Director of the company. His resignation was officially filed only in April 2021, after a memorandum of understanding (MoU) signed between the two companies.
Hemant Sharma of Logix and Neeraj Gusain, director of Experts Realty, were partners in one LLP firm, New Greens Landkart. Both signed the MoU on behalf of their companies. The NCLAT found that Hemant Sharma and Neeraj Gusain are related parties.
The NCLAT also examined the financial documents and noted that the financial statements of Expert Realty revealed that the liability of Logix, which was Rs 21.16 crore as of March 31, 2021, had come down to 'nil' on March 31, 2022. The NCLAT also noticed that for the same debt, a Section 7 petition was filed in 2023.
On April 6, 2023, Expert Realty filed a Section 7 Petition before the NCLT, alleging failure of Logix to repay the due amount arising out of the MoU dated October 20, 2020, and minutes dated December 15, 2021, which did not exist in the books of accounts. The NCLAT noted that the investment had changed its form, and at the time of alleged disbursement, the nature of the debt was Real Estate Allottee. However, Expert Realty filed the petition as a financial creditor by relying on alleged minutes dated December 15, 2021.
Furthermore, the NCLAT observed that Logix candidly admitted the debt and default without raising any objection. In this background, the NCLAT concluded that this was nothing else but collusion between Logix and Expert Realty.
The appellate tribunal noted that at the time of execution of the MoU and alleged minutes, Logix Infrastructure and Expert Realty were related parties and deliberately did not disclose the clear facts of the case to the NCLT and participated in the insolvency proceedings. The tribunal also observed that no resolution plan had been approved, even though FORM-G was issued on October 14, 2023.
Therefore, the NCLAT held that the Financial Creditor had invoked the provisions of IBC against the Corporate Debtor with fraudulent, mala fide intention. The Section 7 application filed by the Financial Creditor was a collusive application filed in collusion with the Corporate Debtor with an ulterior motive.
Frequently Asked Questions
What is the Corporate Insolvency Resolution Process (CIRP)?
CIRP is a process under the Insolvency and Bankruptcy Code (IBC) that aims to revive and restructure a financially distressed company. It involves the appointment of an interim resolution professional to manage the company's affairs and find a resolution plan to repay creditors.
What is Section 65 of the Insolvency and Bankruptcy Code (IBC)?
Section 65 of the IBC allows the National Company Law Tribunal (NCLT) to set aside insolvency proceedings if they are filed with a malicious intent to defraud or gain an unfair advantage. Penalties can be imposed on those involved in such fraudulent activities.
Why did NCLAT recall the insolvency case against Logix Infrastructure?
NCLAT recalled the insolvency case against Logix Infrastructure after finding the debt claim to be fraudulent and malicious. The tribunal noted collusion between the financial creditor, Expert Realty Professionals, and the corporate debtor, Logix Infrastructure.
What penalties were imposed in this case?
The NCLT imposed a penalty of Rs 55 lakh on the financial creditor, Expert Realty Professionals, for filing a fraudulent insolvency petition against Logix Infrastructure.
What is the significance of the NCLAT's decision in this case?
The NCLAT's decision is significant as it upholds the integrity of the insolvency process and ensures that it is not misused for fraudulent purposes. It sends a strong message that the IBC will not tolerate collusive or mala fide intentions in insolvency proceedings.
Related News Articles
Pune's PCNTDA Residents to Get Freehold Status, Promises Maharashtra Minister Uday Samant
Maharashtra Minister Uday Samant has assured PCNTDA residents that a decision will be made on freehold status without causing financial loss to the state government.
Veriff Boosts Biometric Security to Combat Account Takeover Fraud
Biometric authentication, account takeover fraud, identity verification, facial recognition, fraud prevention
Inside Mumbai's Luxurious Abodes: A Glimpse into the Homes of India's Elite
Mumbai, often dubbed the 'Billionaire Capital of Asia,' boasts a real estate landscape that mirrors its status as India's commercial and financial hub. From opulent mansions to sleek high-rises, the city is home to some of the most stunning and expensive
Kapil Sharma: From Rs 500 Salary to Rs 300 Crore Net Worth
Kapil Sharma, the king of Indian comedy, has come a long way from his humble beginnings. Today, he owns luxurious properties and cars, and his net worth is estimated at Rs 300 crore. Explore his inspiring journey from rags to riches.
Mumbai and Delhi Emerge as Leading Luxury Real Estate Markets in Asia-Pacific
India's real estate sector is witnessing a significant boom, driven by robust economic growth, infrastructure improvements, and changing lifestyle trends. Mumbai and Delhi, in particular, are ranking among the fastest-growing luxury real estate markets in
Important Steps to Ensure Your Apartment is Free from Legal Issues Before Purchase
MahaRERA has recently directed a real estate developer near Mumbai to disclose details about any pending litigation to the public. This highlights the importance of checking for legal issues before buying an apartment.