Relief for new IL&FS Board: NCLAT curbs bank action
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New Delhi: Insolvency appellate tribunal NCLAT has extended protection given to the directors of the new board of the debt-ridden firm IL&FS from being prosecuted by banks as wilful defaulters.
A two-member bench stated that the banks will proceed against the professional directors of the newly constituted board only after obtaining permission from the NCLAT. Earlier on April 4, 2025, the NCLAT passed an order to protect those directors from prosecution by banks, who are part of the newly formed board of the IL&FS after takeover by the government. However, the NCLAT had then given a go-ahead to Canara Bank and Indian Bank - to pursue proceedings against former IL&FS directors, who are not part of the new board, to declare them as wilful defaulter.
