The National Company Law Appellate Tribunal on Monday stayed all proceedings by banks and firms against debt-laden Infrastructure Leasing and Financial Services and its 348 subsidiaries in any court of law or tribunal till November 13, reported Moneycontrol. However, it will not be applicable to matters pending in High Courts or the Supreme Court.
The appellate tribunal stayed any action to foreclose, recover or enforce any security interest created over the assets of IL&FS and the 348 subsidiaries, according to The Economic Times.
The tribunal was hearing an urgent petition moved by the government after the National Company Law Tribunal turned down its plea to grant a 90-day moratorium on the loans taken by the firm. The government sought a three-month relief so that the parent company’s new board can roll out its turnaround plan. The National Company Law Tribunal had allowed the government to take control of IL&FS earlier this month.
The appellate tribunal has asked IL&FS’s five largest creditors to respond to the government’s request for a moratorium. The matter will be heard next on November 13. It also directed the five largest creditors to be made party to the case.
“It would provide much needed relief from precipitative creditor actions against different entities within the IL&FS group,” the company said in a press release on Monday, according to PTI.
IL&FS and its subsidiaries have a combined debt of more than Rs 91,000 crore and have defaulted on multiple loan repayments in the last couple of months. The situation is reportedly so grim that it is being compared to the 2008 Lehman Brothers crisis that triggered a global financial meltdown.
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