The National Company Law Appellate Tribunal (NCLAT) has ruled that state-owned Canara Bank and Indian Bank can pursue legal proceedings against former IL&FS directors who are not part of the new board to declare them as wilful defaulters. However, the tribunal has granted protection to those directors who are part of the new board of IL&FS and its subsidiaries after October 1, 2018. This means that any former directors who are no longer affiliated with IL&FS in any capacity will be subject to legal action, while those who have been reappointed to the board of IL&FS or its subsidiaries will be shielded from such action.
The tribunal’s decision is a significant development in the ongoing saga surrounding IL&FS, which is currently undergoing a debt resolution process. The company’s financial troubles were caused in part by the actions of its erstwhile directors, who were accused of making reckless decisions that led to the company’s downfall. The banks had been seeking to declare these directors as wilful defaulters in order to recover their outstanding dues.
The NCLAT’s ruling is seen as a victory for the banks, which can now move forward with their efforts to recover their debts. The tribunal’s decision to grant protection to the new board members, however, is also seen as a positive development, as it will help to ensure that the company can move forward with a stable and effective leadership. The ruling is also expected to send a strong message to other companies and their directors, who are expected to be held accountable for their actions.
Overall, the NCLAT’s decision is a significant step forward in the debt resolution process and is likely to have important implications for IL&FS and its stakeholders. The company’s future direction and prospects will now depend on the actions of its new board and the success of its debt resolution plans.