NCLAT Blocks Fraudulent Insolvency Bid by Logix Infrastructure
The NCLAT has upheld the NCLT decision to recall an insolvency case against Logix Infrastructure upon discovering fraudulent debt claims. The bench found collusion between the involved parties and upheld the penalties imposed by the NCLT. The case highlighted misuse of the Corporate Insolvency Resolution Process under IBC provisions.
- Country:
- India
The National Company Law Appellate Tribunal (NCLAT) has endorsed the decision made by the National Company Law Tribunal (NCLT) to reverse a previous ruling in the insolvency case against Logix Infrastructure, a real estate firm. This ruling follows the tribunal's discovery of fraudulent and malicious debt claims.
The NCLAT's two-member panel emphasized that the plea for the Corporate Insolvency Resolution Process (CIRP) was driven by collusion and malicious intent, supported by sufficient material. The original NCLT order from February 6, which penalized the involved parties, was challenged but eventually held firm by the appellate tribunal.
Further scrutiny revealed that the financial transaction between Logix and its creditor was not genuine, reflecting significant collusion. The appellate court noted overlapping roles among directors and related party transactions designed to exploit the insolvency process. The tribunal's conclusion underscored the misuse of IBC provisions for malicious purposes.
(With inputs from agencies.)
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