NEW DELHI: The National Company Law Appellate Tribunal (NCLAT) Monday stayed all complaints towards IL&FS and 348 team corporations until its additional order on an pressing petition moved via the federal government.
The Ministry of Corporate Affairs impulsively approached the appellate tribunal after the Mumbai bench of the National Company Law Tribunal (NCLT) grew to become down its plea to grant 90 days moratorium over the loans taken via IL&FS and its subsidiaries.
Passing an intervening time order over the federal government's plea, a two-member NCLAT bench headed via Justice SJ Mukhopadhaya stayed all the complaints "taking into consideration the nature of the case, larger public interest and economy of the nation and interest of IL&FS and 348 group companies".
IL&FS in a statement mentioned that the NCLAT order used to be a "much-needed relief" from collectors and would help its newly-constituted board to guage and prepare a resolution plan conserving various stakeholders in mind.
"In addition to providing much-needed relief from precipitative creditor actions against different entities within the IL&FS group, the moratorium enables value preservation of the group's assets and will also assist the newly constituted board of directors of IL&FS in its effort to evaluate and prepare a resolution plan keeping various stakeholders in mind," IL&FS mentioned.
The NCLAT also directed to implead the top 5 lenders of IL&FS and requested to post their replies over the federal government's plea in quest of 90 days moratorium.
"There shall be a stay of the institution or continuation of suits or any other proceedings by any party or person or bank or company, etc against IL&FS and its 348 group companies in any court of law/tribunal/arbitration panel or arbitration authority," the appellate tribunal mentioned.
There would also be a stay on "any action by any party or person or bank or company etc to foreclose, recover or enforce any security interest created over the assets of IL&FS and its 348 group companies including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002".
The appellate tribunal has also put suspension of temporarily the acceleration of any term mortgage, company mortgage, bridge mortgage, industrial paper, debentures, mounted deposits and some other monetary facility via the IL&FS and its 348 team corporations.
It has also stayed all banks, monetary establishments from exercising the suitable to activate or lien towards any quantities mendacity with any creditor towards any dues.
The appellate tribunal has directed to listing the federal government's appeal on November 13 "for admission".
Meanwhile, the NCLAT also clarified that the intervening time order will not be appropriate to any writ petition filed sooner than top courts or the Supreme Court.
During the complaints of the appellate tribunal, the federal government aspect used to be represented via Additional Solicitor General Tushar Mehta.
A moratorium length is a time all the way through which the borrower is not required to make any reimbursement towards the loans.
The govt, in its application filed sooner than the NCLT, had sought 3 months' moratorium over "institution or continuation" or some other complaints towards IL&FS and any of its team corporations in "any court of law/tribunal/arbitration panel or arbitration authority".
It also requested for moratorium over any motion via any birthday celebration "to foreclose, recover or enforce any security interest" created over the property of IL&FS or its team corporations below the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.
The Mumbai bench of the NCLT had on October 1 suspended the board of IL&FS at the govt's plea and accredited reconstitution of the board via appointing seven directors two days later.
The govt had mentioned that the newly appointed board is "likely to face certain problems" in the case of IL&FS and its team corporations and there could also be a need to "rationalise/rethink" business process and strategies that can make sure that efficient and extra efficient manner of functioning.
It had additional contended that the newly elected board required "status quo to be preserved qua the business and assets" of IL&FS and team corporations.
"In the light of the financial crisis which IL&FS was undergoing, the applicant (govt) is given to understand that a large number of creditors have threatened and some creditors have instituted legal proceedings against IL&FS and its group companies. Some proceedings sprouted against IL&FS and its group companies," the federal government mentioned.
It additional added "by a letter dated October 11, 2018, the applicant (MCA) has been informed by ILFS Transport and IL&FS and its group companies have received letters or written communications from 49 different creditors including bondholders, many of whom have accelerated payments under financial facilities extended and demanded payment forthwith under threat of legal proceedings against IL&FS and the corresponding group companies."
However, a two-member NCLT bench had mentioned that moratorium sought via the federal government below the Insolvency & Bankruptcy Code cannot be extended below segment 241-242 of the Companies Act, below which the NCLT had dissolved the IL&FS board.
"In the circumstances, we are of the considered view that the moratorium which has been sought by the Union of India by an application u/s 242 of the Companies act 2013 cannot be granted," mentioned the NCLT.
The Ministry of Corporate Affairs impulsively approached the appellate tribunal after the Mumbai bench of the National Company Law Tribunal (NCLT) grew to become down its plea to grant 90 days moratorium over the loans taken via IL&FS and its subsidiaries.
Passing an intervening time order over the federal government's plea, a two-member NCLAT bench headed via Justice SJ Mukhopadhaya stayed all the complaints "taking into consideration the nature of the case, larger public interest and economy of the nation and interest of IL&FS and 348 group companies".
IL&FS in a statement mentioned that the NCLAT order used to be a "much-needed relief" from collectors and would help its newly-constituted board to guage and prepare a resolution plan conserving various stakeholders in mind.
"In addition to providing much-needed relief from precipitative creditor actions against different entities within the IL&FS group, the moratorium enables value preservation of the group's assets and will also assist the newly constituted board of directors of IL&FS in its effort to evaluate and prepare a resolution plan keeping various stakeholders in mind," IL&FS mentioned.
The NCLAT also directed to implead the top 5 lenders of IL&FS and requested to post their replies over the federal government's plea in quest of 90 days moratorium.
"There shall be a stay of the institution or continuation of suits or any other proceedings by any party or person or bank or company, etc against IL&FS and its 348 group companies in any court of law/tribunal/arbitration panel or arbitration authority," the appellate tribunal mentioned.
There would also be a stay on "any action by any party or person or bank or company etc to foreclose, recover or enforce any security interest created over the assets of IL&FS and its 348 group companies including any action under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002".
The appellate tribunal has also put suspension of temporarily the acceleration of any term mortgage, company mortgage, bridge mortgage, industrial paper, debentures, mounted deposits and some other monetary facility via the IL&FS and its 348 team corporations.
It has also stayed all banks, monetary establishments from exercising the suitable to activate or lien towards any quantities mendacity with any creditor towards any dues.
The appellate tribunal has directed to listing the federal government's appeal on November 13 "for admission".
Meanwhile, the NCLAT also clarified that the intervening time order will not be appropriate to any writ petition filed sooner than top courts or the Supreme Court.
During the complaints of the appellate tribunal, the federal government aspect used to be represented via Additional Solicitor General Tushar Mehta.
A moratorium length is a time all the way through which the borrower is not required to make any reimbursement towards the loans.
The govt, in its application filed sooner than the NCLT, had sought 3 months' moratorium over "institution or continuation" or some other complaints towards IL&FS and any of its team corporations in "any court of law/tribunal/arbitration panel or arbitration authority".
It also requested for moratorium over any motion via any birthday celebration "to foreclose, recover or enforce any security interest" created over the property of IL&FS or its team corporations below the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.
The Mumbai bench of the NCLT had on October 1 suspended the board of IL&FS at the govt's plea and accredited reconstitution of the board via appointing seven directors two days later.
The govt had mentioned that the newly appointed board is "likely to face certain problems" in the case of IL&FS and its team corporations and there could also be a need to "rationalise/rethink" business process and strategies that can make sure that efficient and extra efficient manner of functioning.
It had additional contended that the newly elected board required "status quo to be preserved qua the business and assets" of IL&FS and team corporations.
"In the light of the financial crisis which IL&FS was undergoing, the applicant (govt) is given to understand that a large number of creditors have threatened and some creditors have instituted legal proceedings against IL&FS and its group companies. Some proceedings sprouted against IL&FS and its group companies," the federal government mentioned.
It additional added "by a letter dated October 11, 2018, the applicant (MCA) has been informed by ILFS Transport and IL&FS and its group companies have received letters or written communications from 49 different creditors including bondholders, many of whom have accelerated payments under financial facilities extended and demanded payment forthwith under threat of legal proceedings against IL&FS and the corresponding group companies."
However, a two-member NCLT bench had mentioned that moratorium sought via the federal government below the Insolvency & Bankruptcy Code cannot be extended below segment 241-242 of the Companies Act, below which the NCLT had dissolved the IL&FS board.
"In the circumstances, we are of the considered view that the moratorium which has been sought by the Union of India by an application u/s 242 of the Companies act 2013 cannot be granted," mentioned the NCLT.
NCLAT stays proceedings against IL&FS and 348 subsidiaries
![NCLAT stays proceedings against IL&FS and 348 subsidiaries]()
Reviewed by Kailash
on
October 15, 2018
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