In a sharp rebuke to the misuse of insolvency law, the New Delhi bench of the national company law tribunal (NCLT) has recalled the corporate insolvency resolution process (CIRP) initiated against Alchemist Ltd after finding that the proceedings are tainted by fraud, collusion and malicious intent. In a release,
the directorate of enforcement (ED) says, NCLT scrapped the appointment of the resolution professional (RP) and set aside all actions taken during the CIRP.
The order, passed on 3 February 2026, came on the back of detailed submissions by ED, which argued that the insolvency process was being used as a shield to undermine ongoing money-laundering proceedings and reclaim assets attached under criminal law.
Allowing the ED’s plea, the tribunal not only scrapped the insolvency proceedings but also lifted the moratorium imposed under Section 14 of the Insolvency and Bankruptcy Code (IBC), nullified the appointment of the resolution professional (RP) and set aside all actions taken during the CIRP. In a strong signal against abuse of process, the NCLT imposed a penalty of ₹5 lakh on the operational creditor, Sai Tech Medicare Pvt Ltd, for initiating what it termed a malicious insolvency petition.
ED’s investigation into the Alchemist group stems from multiple first information reports (FIRs) registered by the Kolkata police and Uttar Pradesh police. According to the agency, Alchemist Holdings Ltd and Alchemist Township India Ltd had raised more than Rs1,840 crore from the public by promising high returns and allotment of plots, villas and flats. Neither the promised assets nor refunds were provided, and the funds were allegedly siphoned off to other group companies, including Alchemist Ltd, through inter-corporate deposits.
ED has already filed a prosecution complaint in March 2021, followed by supplementary complaints in July 2024 and September 2025, before the special PMLA (Prevention of Money Laundering Act) court. It has also provisionally attached movable and immovable assets worth ₹492.72 crore through seven separate attachment orders.
The insolvency proceedings under the IBC, ED told the tribunal, are engineered to derail these enforcement actions. Its submissions showed that the committee of creditors (CoC) was overwhelmingly dominated by Alchemist group entities themselves, with Technology Parks Ltd alone holding about 97% of the voting share. Other group companies named as accused in the money-laundering case are also part of the CoC.
The agency further flagged that an ex-employee of the Alchemist group had been appointed as the resolution professional or RP, raising serious questions about independence and that, despite clear directions, ED was not impleaded in the insolvency proceedings in a timely manner.
Accepting these arguments, NCLT held that IBC is a beneficial legislation meant for genuine insolvency resolution and cannot be twisted into a tool to legitimise tainted transactions or launder proceeds of crime. It ruled that immunity under Section 32A of the IBC cannot be invoked to extinguish criminal liability or frustrate proceedings under PMLA.
The tribunal also underscored that while insolvency law and money-laundering law may operate in parallel in appropriate cases, that principle cannot be stretched to permit abuse of one statute to defeat the objectives of another. Allowing a CIRP dominated by accused group entities to continue, it warned, would erode the independence of the resolution process and risk legitimising proceeds of crime.
Calling the conduct a 'gross abuse of the process of law', NCLT invoked Section 65 of IBC to recall the entire insolvency framework initiated against Alchemist Ltd.
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