The Supreme Court on Friday asked HDFC to furnish details of the money it had “illegally” drawn from the IL&FS escrow account, since the National Company Law Appellate Tribunal had restrained lenders from recovering any money for serving debt payments pending resolution process of the infra company and its 348 group entities.
A bench led by justice UU Lalit while seeking response from HDFC Bank and HDFC asked the latter to “indicate status of the amounts withdrawn from the escrow account” from October 15, 2018, the date on which the appellate tribunal had passed the prohibitory orders. It also stayed the NCLAT’s May 15 order that had allegedly permitted HDFC to enforce the terms of its loan agreement and make recovery of its claims from the amounts lying in IL&FS bank account wherein the rents received by the infra company were being deposited.
IL&FS wanted reversal of its around Rs 228 crore that HDFC had “illegally debited” from its accounts towards debt service payments on the ground that such withdrawal was in violation of the October 2018 order. NCLAT had rejected the IL&FS’ plea to give any such directions to HDFC Ltd, which had scantioned Rs 400 crore loan in June 2018 for a term of 96 months.
“The October 15 order continues to subsist and has been adhered to by all financial creditors so that no creditor can steal a preferential award over others and obtain payments ahead of the others,” senior counsel Ramji Srinivasan, appearing for IL&FS, stated.
He further argued that as part of the interim distribution the NCLAT had last month directed the new board of IL&FS to distribute Rs 16,361 crore of cash and Infrastructure Investment Trusts units available across the group to its creditors on pro-rata basis.
“The appellate tribunal completely overlooked the fact that assignment/ownership was completely antithetical to a pledge created for these amounts and that a security in the form of a pledge/duly registered charge with the Registrar of Companies could only be offered if the assets remained in the ownership of IL&FS,” the appeal stated.
