NCLAT rejects IL&FS request to extinguish claims of operational creditors of TN power arm
The National Company Law Appellate Tribunal (NCLAT) has rejected the petition of IL&FS board to extinguish the claim of the Capex Creditors and the Operational Creditors of its power unit IL&FS Tamil Nadu Power Company Ltd (ITPCL).
The NCLAT in order dated 4 July 2022 stated that the IL&FS request for extinguishment of claims of operational and capex creditors cannot be accepted knowing the fact that these claims have been admitted by the Claim Management Advisor.
The appellate tribunal ordered that the admitted claim of Capex Creditors/ Operational Creditors be dealt within a plan of restructuring debt under Reserve Bank of India Circular dated 07 June 2019. It said that for dealing with admitted debts of operational creditors/ capex creditors, an appropriate Resolution Plan has to be made for addressing the claims.
It also observed that the IL&FS arm has to consider the claims appropriately and arrive at a fair and reasonable resolution of the claims as part of the restructuring plan has been arrived between the lenders and ITPCL.
“The claims of Capex Creditors/ Operational Creditors are being tried to be dealt with a side wind without properly appreciating their claim. There are adverse observations in Transaction Review Report and Forensic Audit Report against ITPCL. The borrower, who has been charged with collusive and unfair dealings in awarding the contracts and conducting other affairs, could not be allowed to defeat the claim of Operational Creditors/ Capex Creditors citing its own shortcomings and misdeeds,” the NCLAT said in its order.
The government appointed board of IL&FS has sought from NCLAT the approval for the restructuring proposal of IL&FS Tamil Nadu Power Company Ltd in terms of the term sheet received from the Consortium of Banks.
In the same petition, IL&FS board had also requested the tribunal to extinguish any claim, entitlement or contingent liability (disclosed or undisclosed) of any nature (statutory, contractual or otherwise), and whether existing at or relating to a period prior to the Cut-off date which is specifically not provided/contemplated in the ITPCL Restructuring Plan upon implementation of the Plan.
A total of Rs 608 crore claims were made by operational creditors of ITPCL.
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