NCLAT displeased with delay in IL&FS progress report

Last Updated: Fri, Aug 09, 2019 23:12 hrs
A logo of IL&FS (Infrastructure Leasing and Financial Services Ltd.) is seen on a building at its headquarters in Mumbai

New Delhi: The National Company Law Appellate Tribunal (NCLAT) on Thursday expressed its displeasure over the crisis-hit IL&FS and the government's delay in filing the progress report on the resolution process of the group companies.

"Inspite of our order dated 12th July, 2019 no 'Progress Report' has been filed by Union of India or IL&FS. They are allowed to file the 'Progress Report' by tomorrow (Friday)," said the NCLAT order.

The bench headed by NCLAT Chairperson S.J. Mukhopadhaya further asked the government to settle the claims of all the creditors of the Moradabad-Bareilly Expressway Ltd, the Jharkhand Road Projects Implementation Company, and the West Gujarat Expressway Ltd as per signed 'Term Sheet', before the the next hearing on September 5.



"The Union of India or IL&FS should also give notice to all the financial creditors of rest of the 10 'Amber' entities and take preliminary step by taking their consent in the manner it was followed in the cases of aforesaid three amber entities," it said.

Further, by the next hearing the government and IL&FS would also have to intimate the steps which they intend to take with regard to all the 82 red entities, the bench said.

The new board at IL&FS had classified the IL&FS group companies into three categories -- 'green', 'amber', and 'red' -- on the basis of their ability to service debt obligations to secured and unsecured creditors. Firms classified as "green" would continue to meet their payment obligations, while "amber" category firms can meet only operational payment obligations to secured financial creditors.


Those under the "red" category are the entities which cannot meet their payment obligations at all.

The bench further said that it would be open to the the government and ILFS to call for meeting of the lenders and if necessary, the matter can be taken up on day-to-day basis to ensure that the total process with regard to all the amber entities, particularly the aforesaid three companies which IL&FS has decided to reclassify as green entities, is concluded on an early date.

"They will keep it in mind that already 300 days approx. have completed since the Interim Order was passed on 15th October, 2018," the order said. The appellate tribunal directed the government and IL&FS to file a fresh progress report by September 3.