The National Company Law Appellate Tribunal (NCLAT) has sent out a clear message—fraud leaves no resolution plan standing. Even if a corporate insolvency resolution process (CIRP) is well underway, the National Company Law Tribunal (NCLT) has the authority to recall its own orders when deceit is at play.
The ruling came in a bitter tussle involving Logix Infrastructure, the Noida developer behind the sprawling Blossom County project with 17 towers and 2,384 homes. The fight began when Expert Realty injected ₹15 crore into Logix under a buy-back arrangement, only to later demand repayment it claimed was due. When Logix didn’t pay up, Expert Realty pushed a Section 7 insolvency petition, which the NCLT admitted in July 2023.
But homebuyers weren’t buying the story. They alleged the petition was a smokescreen, designed to protect Logix from its larger liabilities towards the Noida Authority and the allottees. The NCLT dug deeper and in February this year tore up the admission order, branding the proceedings “fraudulent and mala fide.” A hefty penalty of ₹55 lakh was also slapped on Expert Realty.
On appeal, the NCLAT agreed with every word. The tribunal flagged multiple red signals: key documents were unstamped and unregistered, financial entries were inconsistent, and most damningly, directors of Logix and Expert Realty were found to be linked through common partnerships. What was projected as a legitimate financial debt looked, instead, like a carefully stitched collusion.
The appellate bench held that the corporate veil had rightly been lifted. Fraud, it said, vitiates everything—whether it’s an insolvency admission, a resolution plan, or any stage of CIRP. The tribunal clarified that recalling such an order isn’t a “review” but a rightful exercise of power under Section 65 of the Insolvency and Bankruptcy Code (IBC).
The appeal was thrown out, sealing the NCLT’s recall order and reinforcing the principle that insolvency courts cannot be used as safe havens for shady deals.
