The National Company Law Appellate Tribunal (NCLAT) has upheld the February 2025 ruling of the National Company Law Tribunal (NCLT), which dismissed insolvency proceedings against Noida-based Logix Infrastructure, developer of the long-delayed Blossom County housing project in Sector 137, Noida.
The appellate tribunal observed that the insolvency plea filed by Experts Realty Professionals, which had initiated the corporate insolvency resolution process (CIRP), amounted to a fraudulent misuse of the Insolvency and Bankruptcy Code (IBC). It ruled that the petition was collusive in nature and intended to shield the developer from liabilities owed to homebuyers and the Noida authority.
Tribunal’s findings
The NCLAT bench, comprising Justice N Seshasayee and Arun Baroka, agreed with the NCLT’s conclusion that the underlying loan transaction between Experts Realty and Logix Infrastructure was not genuine. The order noted that “the financial arrangement was fraudulent or malicious in nature,” and highlighted multiple instances of collusion between the two entities.
The tribunal cited the absence of registered documents, collateral security, or clear contractual safeguards for a transaction worth ₹15 crore. It also noted overlapping roles of directors in both companies. Hemant Sharma, who moved from Experts Realty to Logix within days, and his delayed resignation filings were pointed out as evidence of related-party dealings.
Further, the tribunal observed that the investment made by Experts Realty was recorded in its books as “current investments” rather than a loan, undermining the claim of being a financial creditor.
Penalties imposed
With the NCLAT’s decision, the earlier penalty of ₹55 lakh imposed by the NCLT on Experts Realty is now enforceable. The amount will be deposited with the Prime Minister’s National Relief Fund (PMNRF). Additionally, all costs associated with the CIRP will be borne by the financial creditor.
The tribunal stated that the petition was filed with mala fide intent and amounted to abuse of the IBC framework. “The petition under IBC was fraudulent and aimed at protecting Logix from its dues to homebuyers and the Noida authority,” the order said.
Background of the case
Blossom County, launched in 2010 as a 17-tower residential project with 2,384 apartments, has been under development for over 15 years. Of these, only 10 towers have obtained occupancy certificates, leaving several hundred homebuyers without possession. The project, initially scheduled for completion in 2013, has dues of more than ₹500 crore pending with the Noida authority.
The insolvency petition originated from a memorandum of understanding (MoU) signed in October 2020 between Logix Infrastructure and Experts Realty. The latter invested ₹15 crore in return for 140,000 sq. ft. of space, with a buyback clause. In December 2021, Logix acknowledged about ₹13 crore as liability, promising repayment within a month along with 18% monthly interest in case of default.
However, the MoU and subsequent meeting records were neither registered nor stamped. According to NCLAT, these shortcomings indicated that the transaction was not a bona fide loan but a device to establish Experts Realty as a financial creditor and secure voting rights in the Committee of Creditors (CoC).
Homebuyers’ opposition
Homebuyers actively opposed the insolvency petition, arguing that it was collusive and would dilute their claims. They alleged that Logix had already collected payments for all apartments but diverted funds, while leaving statutory dues and construction commitments unfulfilled.
By positioning itself as a financial creditor, Experts Realty could claim 21% voting rights in the CoC—an advantage it would not enjoy as a homebuyer. The NCLT, siding with homebuyers in February 2025, cancelled the admission order and imposed penalties. The appellate tribunal has now reaffirmed that decision.
Following the NCLAT ruling, Experts Realty’s advocate Ketan Madan said the firm intends to challenge the order before the Supreme Court, terming it “pervasive and misconceived.”
Meanwhile, Logix promoter Shakti Nath told Hindustan Times that he is no longer associated with the group and that the company is now led by director Mrityunjay Jha, who was not available for comments.
The ruling adds another chapter to the long-running troubles of the Blossom County project, where homebuyers continue to await delivery more than a decade after the promised handover.
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