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NCLAT Orders Bank Guarantee Renewal for IL&FS Property
13 Dec
Summary
- NCLAT directs Brookfield-backed Chronos to renew bank guarantee for IL&FS property.
- IL&FS headquarters protected from third-party rights pending appeal.
- IL&FS seeks higher price; NCLAT upholds renewal requirement for Chronos.
The National Company Law Appellate Tribunal (NCLAT) has issued an interim order requiring Brookfield-backed Chronos Properties to renew the bank guarantee for its bid to acquire IL&FS's prime Bandra Kurla Complex property. This directive aims to prevent Chronos's disqualification from the acquisition process, emphasizing the importance of fulfilling contractual obligations.
The NCLAT has also placed a temporary injunction on the IL&FS group, forbidding the creation of any third-party rights on its headquarters. This measure ensures the asset remains available for resolution until the ongoing appeal is definitively settled, safeguarding the interests of all parties involved.
This development follows a dispute over IL&FS's attempt to revise the purchase price, a move upheld by the National Company Law Tribunal (NCLT) under its value-maximisation principle. The NCLAT's reiteration of the bank guarantee requirement highlights the tribunal's focus on procedural compliance within the IL&FS resolution framework.
