NCLAT Asks IL&FS To Pay Rs 1,925 Crore To Financial Creditors

A three-member NCLAT bench has passed the order on pleas by Canara Bank and Union Bank of India filed on behalf of IL&FS' consortium of lenders

The National Company Law Appellate Tribunal (NCLAT) has passed an order and asked IL&FS to distribute Rs 1,925 crore to its financial creditors from the payments it received from the Gurugram metro project, the PTI reported.

According to the report, the appellate tribunal also made it clear that the distribution of the amount to the lenders will also be subject to the final resolution of the IL&FS companies concerned.

The amount is part of the termination compensation received from two IL&FS subsidiaries and Special Purpose Vehicles (SPVs) – Rapid Metro Rail Gurgaon Limited (RMGL) and Rapid Metro Rail Gurgaon South Limited (RMGSL) – from Haryana Shehari Vikas Pradhikaran (HSVP). The three entities and Haryana Mass Rapid Transport Corporation Ltd were part of the concession agreement for the Gurugram metro project but the agreement was later terminated due to differences between IL&FS subsidiaries and the two Haryana government entities.

Rapid Metro Rail Gurgaon Limited and Rapid Metro Rail Gurgaon South Limited received Rs 638.01 crore and Rs 1,287.90 crore, respectively, as interim termination payments in their escrow accounts from HSVP, following an order of Supreme Court.

The total amount was Rs 2,407.40 crore.

In the order, NCLAT has directed IL&FS to pay Rs 1,925 crore, which is 80 per cent of the amount received from HSVP as interim termination payments to the financial creditors as per the interim distribution framework.

A three-member NCLAT bench has passed the order on pleas by Canara Bank and Union Bank of India filed on behalf of IL&FS' consortium of lenders.

"The distribution of 80 per cent debt due deposited in the escrow accounts of RMGL and RMGSL shall take place in accordance with the 'Revised Resolution Framework' approved by this tribunal vide order dated March 12, 2020," NCLAT said.

The distribution of the said amount would be on pro-rata basis as suggested by the government and approved by NCLAT earlier.

However, NCLAT said the distribution of 80 per cent debt due "shall be subject to final resolution of the concerned IL&FS companies".

"In distribution, an undertaking shall be taken from the financial creditors to refund any amount received by them in excess of their entitlement as found in final resolution of the IL&FS companies," NCLAT added.

With PTI inputs