The Ministry of Corporate Affairs (MCA) on Friday moved the Mumbai bench of the National Company Law Tribunal (NCLT), seeking a moratorium for the next three months from potential lawsuits against IL&FS and all its group entities.
The (NCLT) has already accepted the MCA’s earlier plea filed last week, seeking immunity for the newly-appointed board of IL&FS from any potential legal action against them by numerous creditors and investors of the company.
Appearing for the MCA on Friday, Sanjay Shorey, joint legal director, said the government-appointed board needed a period of calm in order to resolve the discrepancies at IL&FS. He said, “Already, IL&FS has received 111 legal notices from creditors, of which 17 have initiated proceedings. Imagine if all of them began proceedings and the company also received more notices. It would not have the time to come up with a road map for the company as directed by another bench of this tribunal in its order on October 1. IL&FS would be dragged all over the country as it faced proceedings to defend itself.”
Later, Shorey told FE, “We have been given a lifeline in the order on October 1 which allowed the earlier board to be superseded and the new board has also been granted immunity from legal proceedings. We are now seeking wings to fly.”
The counsel for Aditya Birla Finance (ABFL) argued against the moratorium, saying the Delhi High Court has already granted a stay order on the sale of IL&FS’ road assets until December 7 and that legal proceedings by ABFL against IL&FS are ongoing. IL&FS’ roads development arm, IL&FS Transportation Networks owes ABFL `155 crore for its Chenani Nashri Tunnelway project and for Pune Solapur Road Development Company. The NCLT bench has reserved its order.