Legislature is Epitomized by an Unproductive Parliament
Executive Power is Controlled by Politicians
Judiciary is Outdated and Backlogged
Media is Biassed and has no Freedom of Speech
While the Four Voices of democracy are Amoral
A '5th VOICE' is born. Voice By The People, For The People.
The National Company Law Appellate Tribunal (NCLAT) has allowed the banks to declare defaulting IL&FS and group companies’ accounts as Non-Performing Assets. The ban was lifted from the banks by a bench headed by Chairman Justice S.J. Mukhopadhyaya .
On 25th February, 2019, this Appellate Tribunal passed an order restraining the Banks from declaring the loan accounts as ‘NPA’. The Reserve Bank of India had filed an Interlocutory Application for vacating the interim order dated 25th February, 2019 which was disposed of by means of this order. RBI contended that the banks had an obligation to mark bad loans as NPAs as per the existing master circular issued on 1st July 2015 and any deferment will lead to distortion in financial statements. It was further alleged that the identification and classification as NPA is only a process of treating as such and not initiating an immediate recovery process.
The chairman in his order dated 2nd May 2019 stated that, “In view of the aforesaid position of law, we modify the order dated 25th February, 2019 and allow the Banks to classify loan accounts of any of the Group Companies of ‘IL&FS’ as ‘NPA’ without debiting any amount from the account of the ‘Amber Entities’ and ‘Red Entities’, if defaulted to pay after order of ‘Moratorium’ was passed on 15th October, 2018.” He further ordered that, “The classification of an account as ‘NPA’ should not result in withdrawal of support to viable borrowal accounts, though it will be open to the Banks to classify any loan accounts as ‘NPA’ for the purpose of differential treatment in the books of accounts of the Banks.” Infrastructure Leasing & Financial Services (IL&FS) Group companies, with a collective debt of over Rs 90,000 crore, are going through resolution process.
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