After ED Flags Irregularities In Experion Deal, IBBI Steps In; Old Disputes Put Developer Under Sharper Spotlight

New Delhi: The Insolvency and Bankruptcy Board of India (IBBI) has intensified scrutiny of the Gurugram land acquisition linked to Experion Developers, after the Enforcement Directorate (ED) alleged serious misuse of the Insolvency and Bankruptcy Code (IBC) in the resolution of Dignity Buildcon. The move has not only widened regulatory attention on the 9.3-acre land deal in Sector 62, Gurugram, but also revived focus on a string of earlier consumer and regulatory disputes involving the developer across multiple projects and states. 

IBBI Confirms Action Against Insolvency Professional

In a written response to a question raised in the Rajya Sabha, IBBI has confirmed that it has initiated proceedings against the Insolvency Professional (IP) who handled the Dignity Buildcon corporate insolvency resolution process (CIRP). The Board has stated that the alleged violations flagged in the matter are being examined under the IBBI (Inspection and Investigation) Regulations, 2017, and that “appropriate action” is already underway. 

According to officials, the review focuses on whether the IP adhered to both the letter and the spirit of the Code, including:

• Adequacy and timing of disclosures on the composition and reconstitution of the Committee of Creditors (CoC).
• Conduct during CoC meetings, especially in relation to the independence of creditor decision-making.
• Overall transparency and fairness of the resolution process, given the serious regulatory concerns now raised.
• IBBI has also indicated that many issues in the complaint appear to go beyond mere procedural lapses, touching possible criminality, and has recommended that the Ministry of Corporate Affairs (MCA) examine the case for a Serious Fraud Investigation Office (SFIO) probe.
• The ED’s allegations centre on a 9.3-acre prime commercial parcel in Gurugram’s Sector 62, which had earlier been attached under the Prevention of Money Laundering Act (PMLA) in connection with proceedings involving Religare Finvest. 

According to the ED’s application before the National Company Law Tribunal (NCLT):

• While probing the PMLA case, the agency had attached assets belonging to Dignity Buildcon, the corporate debtor that owned the Gurugram land. 
• Subsequently, Experion Capital (ECPL), a group entity of Experion Developers, acquired approximately 60% of CoC voting rights through debt assignments from major financial creditors.
• ED further alleges that ECPL exerted undue influence over Alchemist Asset Reconstruction Company (Alchemist ARC), which held about 35% of the voting share, giving Experion-linked entities effective control over around 95% of CoC voting power when its plan was considered. 

The ED has claimed that:

• ECPL spent about ₹223.92 crore to acquire these voting rights but, after the resolution plan was approved, received around ₹334.08 crore, benefiting from what the agency describes as an unjustifiable arbitrage built into the plan and the haircut structure. 
• Financial creditors who had suffered losses on Dignity Buildcon’s default allegedly accepted a haircut of over 70%, while ECPL – as the successful resolution applicant’s group entity – enjoyed both the upside from the haircut and dominant control over the voting process. 
• The CoC was “manoeuvred” into approving a resolution plan that the ED characterises as financially inferior and not commercially justifiable, thereby prejudicing the interests of other prospective resolution applicants. 
• On this basis, the ED has urged the NCLT to recall its May 2023 order that approved Experion as the successful resolution applicant for Dignity Buildcon, asserting that the insolvency framework was used not as a tool of genuine resolution but as a vehicle to neutralise PMLA attachment and engineer control of the asset. 

Past Disputes and Regulatory Scrutiny Around Experion

The ED–IBBI action comes at a time when Experion Developers, despite strong revenue projections and an expanding project pipeline, already faces a history of high-visibility disputes before consumer fora, regulatory bodies and courts.

1. Supreme Court on Delayed Possession and One-Sided Clauses

In Experion Developers Pvt. Ltd. v. Sushma Ashok Shiroor, the Supreme Court in 2022 dealt with a complaint by a homebuyer alleging delay in possession and oppressive terms in the builder-buyer agreement. The Court:

• Affirmed that homebuyers could pursue remedies under the Consumer Protection Act in parallel with rights under real-estate regulation.
• Held that heavily one-sided contractual clauses in Experion’s standard agreement, particularly relating to delay and refund, amounted to unfair trade practice.
• Directed refund of the amounts deposited by the allottee with interest at 9% per annum. The judgment has since been widely cited as a precedent on how courts will scrutinise real-estate contracts that disproportionately favour developers.

2. NCDRC Findings on “Excess Area” Charges at Windchants

3. Alleged coercion and a “manoeuvred” CoC vote

ED further alleges that the successful resolution applicant:

• “Exercised undue influence” over Alchemist ARC, effectively compelling the ARC to support Experion’s resolution plan despite its alleged financial inferiority.
• Deliberately stalled the CIRP until the composition of the CoC and the distribution of voting rights had shifted in its favour.
• The ED has been quoted as saying that the CoC, substantially influenced by the SRA and its related entities after they became CoC members, was “manoeuvred into approving a resolution plan that was financially inferior and not commercially justifiable,” prejudicing other prospective resolution applicants (PRAs) and undermining the fairness and transparency of the process.

4. Impact on the attached Gurugram land parcel

The crux of the ED’s concern is that this alleged structuring enabled Experion Capital to secure the 9.3-acre land parcel in Sector 62 – an asset that had been attached by ED during the Religare Finvest PMLA probe – by leveraging its acquired CoC control and the IBC machinery.

On this basis, the agency has asked the NCLT to recall its May 2023 order that had approved the Experion-led resolution plan for Dignity Buildcon.

Alleged irregularities: what ED says went wrong

Read together, the ED’s filings and media leaks amount to a set of serious alleged irregularities:

• CoC capture and conflict of interest
• By becoming the dominant financial creditor (through ECPL) while also being the resolution applicant (through EDPL), Experion is alleged to have blurred the line between creditor and bidder, creating a structural conflict of interest that allowed it to heavily influence – and allegedly pre-determine – the CoC decision.

Economic benefit from haircuts it helped design

ED claims ECPL reaped the benefit of a 70.17% haircut granted by original lenders when they assigned their debt, and then used those same assigned debts (with reduced economic exposure) to vote in favour of its own group’s plan, effectively arbitraging the insolvency framework.

“Financially inferior” plan pushed through a reconstituted CoC
The agency asserts that alternative bids or potential competing resolution applicants were disadvantaged because the CoC vote was controlled by entities related to the SRA. That, according to ED, undermines the competitive, market-discovery logic that underpins IBC resolution processes.

Use of IBC to neutralise PMLA attachment

Because the key asset was already under attachment in a money-laundering investigation, ED views the eventual transfer of that asset via an IBC resolution as a possible circumvention of PMLA’s objective of preserving proceeds of crime for eventual restitution. This concern is not unique to this case; ED and IBBI have, in recent months, worked on standard operating procedures to address precisely such conflicts between IBC and PMLA.

These irregularities remain allegations at this stage. Whether they amount to illegality or only highlight gaps and grey areas in the IBC will ultimately be determined by adjudicating authorities and, potentially, higher courts.

Experion Developers’ response: “Debt assignments fully paid; everything placed before NCLT”

Experion Developers has categorically rejected the ED’s allegations, describing them as “baseless”.

The company’s key counter-points, as reported, are:

• Debt assignments were legitimate and fully paid for
• A spokesperson has stated that all assignments of debt to ECPL were backed by actual consideration, and that there was no sham or preferential arrangement in how these exposures were acquired.

Full disclosure of CoC changes

Experion says every change in CoC composition was placed before the NCLT and that the updated CoC structure was published on the IBBI website, implying adherence to transparency and procedural requirements.

Legal permissibility of creditor–resolution applicant dual role

The company emphasises that current law permits a financial creditor to also be a resolution applicant, subject to Section 29A eligibility. In their view, the structure used in Dignity Buildcon’s case was within the four corners of the IBC and does not, by itself, imply any mala fide intent.

Challenge to ED’s attachment of DBPL’s assets
Experion’s spokesperson points out that ED had earlier informed the Delhi High Court that it intended to attach properties of RS Infrastructure, not Dignity Buildcon. The later attachment of DBPL’s assets is thus characterised by Experion as erroneous and obstructive of the company’s revival, and it notes that the High Court granted interim protection over the attached assets.

In essence, Experion’s defence is that what ED calls “misuse” is, in fact, a lawful exploitation of options permitted by the IBC, with full disclosure to the adjudicating authority.

IBBI steps in: regulatory action against the insolvency professional, SFIO probe proposed