NCLAT stays proceedings against IL&FS, group firms
Assets and Enforcement of Security Interest Act, 2002”.
The appellate tribunal has also put suspension of temporarily the acceleration of any term loan, corporate loan, bridge loan, commercial paper, debentures, fixed deposits and any other financial facility by the IL&FS and its 348 group companies.
It has also stayed all banks, financial institutions from exercising the right to set off or lien against any amounts lying with any creditor against any dues.
The appellate tribunal has directed to list the government’s appeal on November 13 “for admission”.
Meanwhile, the NCLAT also clarified that the interim order will not be applicable to any writ petition filed before high courts or the Supreme Court. During the proceedings of the appellate tribunal, the government side was represented by additional solicitor general Tushar Mehta.
A moratorium period is a time during which the borrower is not required to make any repayment towards the loans.
The government, in its application filed before the NCLT, had sought three months’ moratorium over “institution or continuation” or any other proceedings against IL&FS and any of its group companies in “any court of law/tribunal/arbitration panel or arbitration authority”.
It also asked for moratorium over any action by any party “to foreclose, recover or enforce any security interest” created over the assets of IL&FS or its group firms under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act.
The Mumbai bench of the National Company Law Tribunal (NCLT) had on October 1 suspended the board of IL&FS on the government’s plea and authorised reconstitution of the board by appointing seven directors two days later.