The National Company Law Appellate Tribunal on Tuesday agreed to hear IndusInd Bank’s plea seeking to recover an interest payment of Rs 25 crore from Infrastructure Leasing & Financial Services (IL&FS).
The National Company Law Appellate Tribunal on Tuesday agreed to hear IndusInd Bank’s plea seeking to recover an interest payment of Rs 25 crore from Infrastructure Leasing & Financial Services (IL&FS). IndusInd Bank, which has an exposure of over Rs 3,000 crore, said it would have to classify the company’s account as a non-performing asset, if the interest part is not paid.
The bank moved the appellate tribunal seeking a “modification in the order of the appellate tribunal”, pronounced on October 15, which stayed any other proceedings against IL&FS and its 348 subsidiaries in any court of law or tribunal, barring the high courts and the Supreme Court.
In its October 15 interim order, the NCLAT had granted a “prayer of moratorium” sought by the government on any party seeking initiation of corporate insolvency resolution process against IL&FS in view of smooth functioning of the new board.
IndusInd Bank, therefore had to approach the appellate tribunal as, according to its lawyer, if IL&FS fails to pay the interest amount due to the bank, it will be classified as an NPA as per the Reserve Bank of India’s guidelines, which will also hurt the bank.
While castigating banks for suddenly waking up from their hibernation to recover their dues, the two-member NCLAT bench, headed by its chairperson justice SJ Mukhopadhaya, issued notice to the Centre and IL&FS on the bank’s interlocutory application and placed the matter for further hearing along with the main matter on November 13. In the main case, the government has sought a three-month relief so that IL&FS’ new board is able to roll out its turnaround plans for the company and its 348 subsidiaries.
The bench also asked the government whether there was plan on its part for capital infusion in the beleaguered firm which has a debt of over Rs 91,000 crore. IL&FS and its arms have defaulted on multiple payments in the previous months. In order to check any contagion effect on the financial markets and the NBFC sector, the government to stepped in and on October 1, got the National Company Law Tribunal’s (NCLT) permission to supersede the Board.