Debt-ridden Infrastructure Leasing & Finance Services Ltd (IL&FS) has filed an application with Mumbai Bench of the National Company Law Tribunal (NCLT) seeking certain relief like compromise or arrangement with members or creditors under Section 230 of the Companies Act 2013.
As per a regulatory filing by IL&FS Transportation Networks Ltd, a subsidiary of the debt-ridden conglomerate, "its promoter and majority shareholder IL&FS has filed an application with the NCLT seeking certain reliefs in connection with filing of a scheme of arrangement under Section 230 of the Companies Act, 2013 in respect of IL&FS, the company and certain subsidiaries, joint ventures, associates of the company, which scheme will be prepared in compliance with applicable law and subject to necessary consents of the shareholders, creditors , regulators and the board of directors of the respective entities."
Companies named in the regulatory filing, include, Baleshwar Kharagpur Expressway Ltd, Barwa Adda Expressway Ltd, East Hyderabad Expressway Ltd, Thiruvanthapuram Road Development Company Ltd, MP Border Checkpost Development Company Ltd, Kiratpur NerChowk Expressway Ltd, Khed Sinnar Expressway Ltd, ITNL Road Development Company Ltd, Karyavottam Sports Facilities Ltd, IL&FS Rail Limited Ltd, Rapid MetroRail Gurgaon Ltd, Rapid Metro Rail Gurgaon South Ltd, and Noida Toll Bridge Company Ltd.
Section 230 of the Companies Act talks about compromise or arrangement with members or creditors. It says...
• When a compromise or arrangement is proposed—
(a) between a company and its creditors or any class of them; or
(b) between a company and its members or any class of them,
the Tribunal may, on the application of the (i) company or (ii) of any creditor or(iii) member of the company, or (iv) in the case of a company, which is being wound up, of the liquidator, order a meeting of the creditors or class of creditors, or of the members or class of members, as the case may be, to be called, held and conducted in such manner as the Tribunal directs.
Interestingly, sub-section (2) states that if the NCLT is satisfied that the compromise or arrangement sanctioned under section 230 cannot be implemented satisfactorily with or without modifications, and the company is unable to pay its debts as per the scheme, it may make an order for winding up the company and such an order shall be deemed to be an order made under section 273.