IL&FS, subsidiaries can be declared NPAs only after nod, says NCLAT

The National Company Law Appellate Tribunal (NCLAT) on Monday ruled that accounts of Infrastructure Leasing & Financial Services (IL&FS) and its subsidiaries could not be classified as non-performing assets (NPAs) without approval from the tribunal.

“Without going into the rival contention of the parties, we make it clear that due to non-payment of dues by the IL&FS or its entities including the amber companies, no financial institution will declare the accounts as an NPA without prior permission of this appellate tribunal,” a two-judge Bench led by Chairperson Justice S J Mukhopadhaya said.

The Reserve Bank of India (RBI) had earlier told banks to declare some accounts of the group NPAs. Now, that directive will be on suspension.