New Delhi: IL&FS and its group firm, IL&FS Engineering and Construction Company have been given the green light by the National Company Law Appellate Tribunal (NCLAT) to extend a Rs 60.29 crore bank guarantee issued to the National Highways Authority of India (NHAI). NCLAT said it was not inclined to state-owned NHAI’s appeal to direct to IL&FS firm to invoke the bank guarantee, which will lapse on March 1, a two-member bench led by Chairman Justice S J Mukhopadhaya said.
“Taking into consideration the facts and circumstances of the case, while we are not inclined to direct M/s IL&FS Engineering and Construction Company Ltd or IL&FS to invoke the Bank Guarantee aforesaid, allow the alternative prayer for extension of the bank guarantee for another period of six months from 1st March, 2019,” said NCLAT.
May negotiate for amicable foreclosure of the contract
It further said: “If such a request is made to the concerned bank, they will extend it for six months.”
The appellate tribunal also said that its directions “will not come in the way of the IL&FS or Union of India to negotiate with NHAI for amicable foreclosure of the contract. They may negotiate and foreclose the contract.”
The tribunal’s order came over an application filed by NHAI to direct IL&FS Engineering and Construction Company to invoke the bank guarantee. During the hearing, however, IL&FS stated that they are in negotiations with NHAI for amicable foreclosure of the contract. The Ministry of Corporate Affairs also supported this during the proceedings.
IL&FS and over 300 group subsidiaries under moratorium
IL&FS and more than 300 of its group subsidiaries, tackling debts of more than Rs 90,000 crore, are under moratorium issued by the NCLAT.