Insolvency proceedings begin against NCR-based Logix City Developers
National Capital Region-based real estate firm Logix City Developers Pvt Ltd has been dragged into insolvency proceedings after New Delhi bench of the National Company law Tribunal (NCLT) admitted an insolvency application against it by an operational creditor.
Operational creditor Colliers international (India) Property Services Private Ltd, a real estate advisory firm, had filed insolvency petition against Logix City Developers after the latter defaulted on payment of Rs 1.08 crore.
The payment was due against construction/project management consultancy services provided by Colliers to the corporate debtor for its Noida-based project Bloom Zest.
The corporator debtor while acknowledged the non-payment of the said amount, it said in its response to the insolvency petition that it was confident that the Bloom Zest project would be finished in times and the proceeds from sale of the project would allow it to make payment of the said amount. However, it said that the real estate market suffered due to Covid-19 pandemic, leading to its default.
The NCLT, however, based its order on the fact that the corporate debtor did not dispute the amount due and hence admitted the insolvency petition against Logix City Developers.
The tribunal has appointed Yogesh Kumar Gupta as the interim Resolution Professional. The applicant had proposed the name of the IRP.
He has been directed to make public announcement within three days of the pronouncement of the order and call for submission of claims from creditors.
With the admission of the insolvency application, moratorium kicks in during which pending/new legal proceedings against the corporate debtor remains suspended and any kind of transfer, encumbrance or sale of corporate debtor’s asset is prohibited.
Logix City Developers becomes another construction company against which insolvency proceedings have been initiated. So far 11% of the total 4946 CIRPs have been initiated against construction companies. As many as 7% of the total CIRPs which ended on liquidation were that of construction companies.
The Logix group was originated in Noida, Delhi NCR in 1997. Since its inception, the group has been the front-runner in setting up and promoting the IT/ITES industry in India. The Logix Group has established more than 25 such facilities and completed more than 3,71,612.16 square meters (4 million square feet) of IT spaces. All the projects are executed by separated SPVs having the group controlled equity.
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