New Delhi, Feb 5 (NationPress) - In a significant relief for the ED, the National Company Law Tribunal (NCLT) in New Delhi has annulled the Corporate Insolvency Resolution Process (CIRP) initiated against M/s Alchemist Limited, determining that the insolvency proceedings were tainted by fraud, collusion, and malicious intent, according to a statement issued on Thursday.

The ruling was made on Wednesday, with the Tribunal exercising its authority under Section 65 of the Insolvency and Bankruptcy Code (IBC), 2016.

The NCLT firmly stated that the insolvency framework should not serve as a mechanism to legalize proceeds of crime or obstruct proceedings under the Prevention of Money Laundering Act (PMLA), 2002.

The ED initiated its investigation against M/s Alchemist Limited based on FIRs lodged by the Kolkata Police and Uttar Pradesh Police.

Investigations indicated that Alchemist Holdings Limited and M/s Alchemist Township India Ltd had amassed over Rs 1,840 crore from the public by guaranteeing high returns and the allocation of properties such as plots, villas, and flats. Unfortunately, the promised properties and returns were never provided, nor were investors reimbursed.

The ED claims that the funds were misappropriated and redirected to other affiliated entities, including M/s Alchemist Limited, through inter-corporate deposits (ICDs).

On March 2, 2021, the ED presented its main prosecution complaint (charge sheet), with supplementary complaints filed on July 19, 2024, and September 11, 2025 before the Special PMLA Court. The agency has also provisionally seized assets valued at Rs 492.72 crore through seven separate attachment orders.

During the investigation, it was discovered that an application under Section 9 of the IBC had been submitted by M/s Sai Tech Medicare Private Limited to commence CIRP against M/s Alchemist Limited.

A Committee of Creditors (CoC) was subsequently formed, which, according to the ED, was largely controlled by Alchemist Group entities. M/s Technology Parks Limited held nearly 97 percent of the voting rights, while M/s Alchemist Township India Limited and M/s Alchemist Realty Limited held 1.74 percent and 0.61 percent voting shares, respectively.

The ED presented substantial evidence to the Tribunal, demonstrating that these dominant CoC members were linked to money laundering and were beneficiaries of crime proceeds. All of them have been named as accused in the ED’s PMLA complaint.

The agency argued that the insolvency process was being exploited as a means to recover seized assets and invoke immunity under Section 32A of the IBC, thereby obstructing criminal actions under the PMLA.

Additionally, it was pointed out that an ex-employee of the Alchemist Group, Gaurav Misra, was appointed as the Resolution Professional, raising significant concerns regarding independence and fairness. Despite specific directives from the Tribunal, the ED was not included in a timely manner, suggesting a mala fide intent, as per the agency's claims.

Accepting the ED’s arguments, the NCLT asserted that the IBC is a beneficial law aimed at genuine insolvency resolution, not a tool for legitimizing illicit transactions or laundering crime proceeds.

The Tribunal ruled that Section 32A of the IBC cannot be invoked to eliminate criminal liability or derail PMLA proceedings. It also noted that a CIRP dominated by accused group entities fundamentally undermines the independence and judgment of the CoC.

Permitting such proceedings to persist, the NCLT warned, would result in the legitimization of crime proceeds, dilution of PMLA attachments, and misuse of insolvency-related immunity.

The Tribunal concluded that the insolvency procedure was initiated with fraudulent and malicious intent, clearly invoking the provisions of Section 65 of the IBC.

While reaffirming that the IBC and the PMLA function in separate domains and may operate concurrently in suitable cases, the NCLT maintained that the principle of concurrent operation cannot be extended to allow the exploitation of one statute to undermine the objectives of another.

Consequently, the Tribunal annulled the CIRP, lifted the moratorium under Section 14 of the IBC, nullified the appointment of the Resolution Professional, and invalidated all actions taken following his appointment.

Taking into account the severe misuse of the legal process, the NCLT imposed a penalty of Rs 5 lakh on the operational creditor, M/s Sai Tech Medicare Private Limited.

This order reaffirms the established legal position that insolvency proceedings cannot be exploited to undermine criminal law, confiscation of crime proceeds, or restitution to investors under the PMLA.