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Informist, Tuesday, Feb. 25, 2025

--NCLT admits IL&FS Financial Services' IBC plea against Ansal Properties

 

By Surya Tripathi

 

NEW DELHI – The Delhi bench of the National Company Law Tribunal on Tuesday admitted a petition by IL&FS Financial Services Ltd. to start insolvency proceedings against Ansal Properties and Infrastructure Ltd. for outstanding dues worth INR 2.57 billion. The tribunal directed a moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016 against Ansal Properties.

 

"The repeated defaults and extensions sought by the corporate debtor further underscore the inability of the corporate debtor to meet its obligations in a timely manner," said the tribunal. Such conduct demonstrates that  Ansal Properties' financial distress is not merely temporary but indicative of an ongoing issue of non-payment and delayed settlements, the tribunal added.  

 

In 2016, IL&FS Financial Services had granted a term loan facility of INR 500 million to Ansal Properties. A subsequent request from Ansal Properties led the finance company to grant another term loan facility of INR 1 billion. IL&FS Financial Services said that after the disbursal of the loan amounts, Ansal Properties began defaulting and committing various breaches under the loan agreement. 

 

In view of the repeated defaults of Ansal Properties, IL&FS Financial Services classified the former's account as a non-performing asset in 2018. Being aggrieved by the non-payment of admitted debt being due and payable by Ansal Properties, IL&FS Financial Services moved the tribunal to start insolvency proceedings against the debt-ridden company in 2019.

 

During the pendency of the insolvency petition, Ansal Properties made settlement proposals to IL&FS Financial Services. In 2021, the latter withdrew its insolvency proceedings against Ansal Properties. A settlement agreement was executed in 2021, under which INR 1.06 billion was to be paid by Ansal Properties in two instalments. The agreement was revised thereafter with a different payment schedule. However, till March 2024, Ansal Properties had only paid INR 283.60 million out of the revised settlement amount. 

 

Rejecting the settlement agreement, IL&FS Financial Services called upon Ansal Properties to pay the total dues of INR 2.57 billion as per the loan agreement. When the debt-ridden company failed to pay this amount, IL&FS Financial Services again moved the National Company Law Tribunal to start insolvency proceedings against Ansal Properties.

 

On Tuesday, shares of Ansal Properties and Infrastructure ended 3.0% lower at INR 7.17 on the National Stock Exchange.  End

 

Edited by Tanima Banerjee

 

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