The ministry of corporate affairs is rejoicing after the NCLAT stayed all the proceedings against debt-laden IL&FS and its 348 subsidiaries and said that the priority is to pay salaries and complete ongoing projects, rather than re-paying large debt.

Corporate affairs secretary Injeti Srinivas told reporters, “IL&FS has to be run and the required funding should be given. It has nearly 4,500 employees, who need to be paid salaries. It has also taken projects both in India and abroad.”

He added, “We need to fulfil all obligations of critical projects or legal issues will arise. After that only we can talk about repayment, that too on the basis of seniority. If we use liquidity for repayment, then we can’t go forward. Therefore, the moratorium is needed and NCLAT has given us a temporary relief.”

Srinivas also stated, “We got the relief we wanted. It heard our petition and considered both the economic as well as public interest involved in IL&FS. It has stayed the NCLT order and as an interim measure, have approved all our prayers including that of a moratorium.”

The National Company Law Appellate Tribunal (NCLAT) issued an order on Monday over an urgent petition moved by the ministry after the Mumbai bench of NCLT had turned down its plea for a 90-day moratorium over the loans taken by the IL&FS and its subsidiaries.

IL&FS and its subsidiaries who have defaulted on several debt obligations are currently under a long and short-term debt of over Rs. 91,000 crores.

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