NCLAT allows 22 IL and FS firms to repay debt, Justice Jain in charge

The National Company Law Appellate Tribunal (NCLAT) Monday allowed 22 companies of crisis-hit IL&FS group, which were classified in green category based on their financial health, to service their debt obligations. 

Besides, a two-member bench headed by Justice SJ Mukhopadhaya approved appointment of former Supreme Court judge Justice DK Jain to supervise resolution process of crisis-hit IL&FS and its group companies.

The appellate tribunal also lifted moratorium and allowed 133 IL&FS firms incorporated outside India to continue with the resolution process. “We allow the boards (of the green companies) to permit them to service debt obligations as per schedule,” said NCLAT.

The NCLAT’s direction came during the hearing over government’s plan for the resolution of IL&FS group companies. IL&FS group companies are classified into three groups -- Green, Amber and Red, based on their respective financial positions.

The companies falling under green categories will continue to meet their payment obligation. While, the companies which can not meet their obligations but can meet only operational payment obligations to senior secured financial creditors are classified as the amber category.

And in the red category are those entities which can not meet their payment obligations towards even senior secured financial creditors.

In an affidavit filed before the NCLAT, the government informed former Supreme Court judge Justice DK Jain has agreed to supervise the resolution process of the IL&FS group companies.

During the hearing, Solicitor General of India Tushar Mehta appearing for the Ministry of Corporate Affairs submitted a list of 302 subsidiaries of IL&FS, which are jointly controlled entities, group companies and associates forming part of IL&FS group companies.

Out of 302 companies, 169 companies are incorporated in India and the remaining 133 are incorporated outside India, he added.

The major group companies which are in green list include - IL&FS Investment Manager, IL&FS Security service, IL&FS Paradip Refinery Water, Tamil Nadu Water Investment.