In a huge respite to the distressed Infrastructure Leasing and Financial Services (IL&FS) company, the two-member National Company Law Appellate Tribunal (NCLAT) Bench headed by Justice SJ Mukhopadhaya on Monday, while granting interim relief, stayed all the ongoing legal proceedings against the company and its 348 subsidiaries till the passing of any further orders.
The company had initially moved an application before the Mumbai Bench of National Company Law Tribunal (NCLT), pleading for a 90-day moratorium over the loans taken by the company and its subsidiaries.
Dejected and defeated in NCLT, the Ministry of Corporate Affairs moved an urgent petition before NCLAT seeking and urging the Court to restrain the creditors of IL&FS from filing suits in case of non-repayment of loans.
Ruling in favour of the crisis-hit Infrastructure Leasing and Financial Services company, the Bench while staying all the legal proceedings against the company, directed the top five lenders of the defaulter company to submit their replies on the 90-day moratorium. The bench further stated that the said order will not be applicable to any Writ Petition filed before High Courts or the Supreme court.
The lawyers of IL&FS had argued before the court that the company and its subsidiaries would face at least 70-80 legal suits if the moratorium is not granted.
Infrastructure Leasing & Financial Services Limited (IL&FS) is a leading Indian infrastructure development and finance company. The IL&FS crisis came to light following a loan default of Rs. 1,000 crore from Small Industries Development Bank of India (SIDBI).
On 1st Oct, 2018, the Government of India took steps to take control of the company, following serious allegations pertaining to loan defaults by the company and to remedy the situation. A new board was constituted comprising of Kotak Mahindra Bank managing director Uday Kotak, former IAS officer & Tech Mahindra boss Vineet Nayyar, former SEBI chief G N Bajpai, former ICICI Bank chairman G C Chaturvedi, former IAS officers Malini Shankar and Nand Kishore.
As per reports, IL&FS has a total debt of Rs 91,000 crore, of which Rs 57,000 crore is from PSU banks. The company needs an immediate capital infusion of Rs 3,000 crore.
Meanwhile, the matter had been posted for further hearing on November 13.