NCLT Cancels Insolvency Case Against Alchemist, Citing Fraud and Collusion: ED

New Delhi: The Enforcement Directorate (ED) on Thursday said that the National Company Law Tribunal (NCLT) has recalled the Corporate Insolvency Resolution Process (CIRP) initiated against Alchemist Limited, observing that the “insolvency proceedings were vitiated by fraud, collusion and malicious intent.” The law enforcement agency further added that the NCLT, exercising its powers under Section 65 of the Insolvency and Bankruptcy Code, 2016 (IBC), has categorically held that the insolvency framework cannot be misused as a shield to legetimise proceeds of crime or frustrate proceedings under the Prevention of Money Laundering Act (PMLA)."The order of the NCLT reaffirms the settled legal position that PMLA proceedings and insolvency proceedings operate

in distinct fields, and that the insolvency framework cannot be misused to defeat criminal law, confiscation, or investor restitution,” the probe agency stated.

What is the ED Case Against Alchemist Limited

The ED case against Alchemist Limited from multiple FIRs filed by the Uttar Pradesh Police and Kolkata Police. During the money laundering investigation, it was found that Alchemist Holding and Alchemist Township had collected over Rs 1,840 crore from the public on the pretext of providing plots, villas, and higher returns.The probe, however, revealed that neither were apartments or plots delivered nor was the money returned, and the funds were diverted to other group companies.Between 2021 and 2025, the ED filed three prosecution complaints and provisionally attached assets worth Rs 492.72 crore.

What ED Application Claimed

The ED claimed that an application under Section 9 of the Insolvency and Bankruptcy Code was filed to initiate the CIRP against Alchemist Limited by Sai Tech Medicare Pvt. Ltd.Subsequently, a Committee of Creditors (CoC) was constituted. However, the ED alleged that the CoC largely comprised Alchemist Group entities, with Technology Parks Limited holding approximately 97 per cent voting rights.The majority of CoC members were from group entities accused of money laundering and beneficiaries of proceeds of crime, including Technology Parks Limited (voting share 97%), Alchemist Township India Limited (voting share 1.74%) and Alchemist Realty Limited (voting share 0.61%).It was also highlighted that these entities are recipients of proceeds of crime and have been named as accused in the complaint filed by the ED.The insolvency process was being used as a device to reclaim attached assets and invoke immunity under Section 32-A of the IBC.An ex-employee of the Alchemist Group, Gaurav Misra, was appointed as Resolution Professional, "raising serious concerns," regarding independence and fairness."Despite NCLT directions, the ED was deliberately not imploded in a timely manner, indicating mala fide intent," ED claimed."IBC is a beneficial legislation meant for genuine insolvency resolution, not a mechanism to sanitise tainted transactions or launder proceeds of crime," the ED said, quoting the NCLT order."Section 32-A of the IBC cannot be invoked to extinguish criminal liability or frustrate proceedings under the PMLA. A CIRP dominated by accused group entities fundamentally erodes the independence and commercial wisdom of the Committee of Creditors," the ED said, quoting the order."Permitting such a CIRP to continue would result in the legitimisation of proceeds of crime, dilution of PMLA attachments, and abuse of insolvency immunity," the NCLT observed.The NCLT has also imposed a penalty of Rs 5 lakh on the operational creditor, M/s Sai Tech Medicare Private Limited, the ED said in a statement.