FCC

NCLAT dismisses HDFC's appeal against sale of IL&FS BKC property

2023-03-03

The National Company Law Appellate Tribunal (NCLAT) has dismissed the plea of HDFC to stay the sale of IL&FS headquarters in Mumbai's Bandra Kurla Complex (BKC) to Brookfield Asset Management. A two-member bench of the NCLAT said the sale of the property is as per the revised resolution framework approved by the appellate tribunal in March 2020 and it cannot operate as any fetter to proceed with the approval of the proposal.

Housing Development Finance Corporation Ltd had made an offer to sanction a loan of Rs 4 billion to IL&FS as a lease rental discounting transaction.

The repayment of the said facility was to be from the cash flows generated from the use of the TIFC property being let out by Infrastructure Leasing & Financial Services Ltd whose cash flows were assigned in favour of HDFC.

Yet as part of its strategy to cut debt, the newly in charge of the indebted IL&FS chose to sell the property.

On September 23, 2022, it also received approval from the adjudicating body in accordance with the established method.

HDFC contested this, claiming that the order was issued on September 23, 2022, in contravention of the rules of natural justice, by the adjudicating authority.

"... we, thus, are of the view that no grounds have been made out to interfere with the order passed by the adjudicating authority dated September 23, 2022," the NCLAT said.

"No relief can also be granted in... as on date, the same stands rejected," the NCLAT bench comprising Chairperson Justice Ashok Bhushan and Alok Srivastava said.