IL&FS moves NCLAT against wilful defaulter tag for group firms

NEW DELHI: The newly appointed board of debt-ridden IL&FS has moved an urgent application before the appellate tribunal NCLAT to restrain 11 public sector lenders from initiating proceedings to declare its group companies as “wilful defaulters”.

In its petition, IL&FS said it is aggrieved by the “blatant violation and disregard” of previous NCLAT orders by the banks. IL&FS also charged banks of taking procedural action under the garb of the RBI guidelines, and harassing the Directors of the IL&FS companies”.

The banks are “issuing show cause notices, calling for a personal hearing before the Wilful Defaulter Identification Committee, threatening initiation of criminal proceedings, including initiating proceedings as well as and for declaring IL&FS companies and their current Directors as Wilful Defaulters, as well as getting issued Look Out Circulars,” it submitted.

“All such coercive actions/steps are attempts by the Respondent Banks to pressurize the IL&FS companies to directly or indirectly meet their debt demands, without having regard to the fact that the resolution/satisfaction of debts of all the creditors of the IL&FS companies is sub-judice before this Tribunal,” it submitted.

IL&FS has prayed to restrain the banks from pursuing proceedings against “other IL&FS companies and/or their Directors and/or officers appointed after October 2018 by the IL&FS New Board.”

The banks are – Central Bank of India, Bank of Baroda, Indian Bank, Canara Bank, Punjab National Bank, Indian Overseas Bank, State Bank of India, Bank of India, Jammu & Kashmir Bank, IDBI Bank and Union Bank of India.