The National Company Law Appellate Tribunal has been moved by Reserve Bank of India on the matter of modification in an earlier order which resisted banks from declaring accounts of the Infrastructure Leasing and Financial Services group as non-performing assets.
The NCLAT has allowed the intervention of RBI. On Feb. 25, the NCLAT bench headed by Chairperson Retired Justice SJ Mukhopadhyay passed an order stating that lenders should not classify any account belonging to the IL&FS group as NPA without prior permission from the appellate authority.
“ …we make it clear that due to non-payment of dues by the Infrastructure Leasing & Financial Services Ltd. or its entities including the ‘Amber Companies’, no financial institution will declare the accounts of Infrastructure Leasing & Financial Services Ltd. or its entities as NPA without prior permission of this Appellate Tribunal,” the order had said.
While the NCLAT did not explain the reasoning behind its decision, it put the regulator in a tough spot.
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