New Delhi: In its final judgement on the insolvency proceedings against Infrastructure Leasing & Financial Services (ILFS), the National Company Law Appellate Tribunal (NCLAT) approved the resolution framework proposed by the government, on Thursday.
Rejecting the opposition of the creditors, the two-judge bench headed by Justice SJ Mukhopadhaya said the money invested in IL&FS by the Life Insurance Corporation (LIC), State Bank of India (SBI), Central Bank of India and the ILFS Employees Welfare Trust, among others constituted public money, and hence the distribution framework under the Insolvency and Bankruptcy Code (IBC) should not be followed.
Commenting on the order, Ramji Srinivas, counsel for the Uday Kotak-led ILFS board said, “Pro rata distribution is in fact encouraged instead of just paying off financial creditors at unit level or asset level. Instead it should be at all levels so therefore, choice of financial creditors, provident funds, investors at all levels should be taken care off in a pro rata manner.”
Setting a time limit of 90 days for the resolution process the NCLAT said, “The Union of India, the board of directors of ILFS and committee of creditors already constituted or which may be constituted, are directed to conclude the resolution of all entities preferably within 90 days.” The appellate tribunal noted that taking advantage of the interim order, resolution plans worth Rs 40,000 crore have already been approved for various group entities of ILFS and there was likelihood of another Rs 20,0000 crore being cleared.