NCLAT's Decision on Former IL&FS Directors

In a significant development, the National Company Law Appellate Tribunal (NCLAT) has permitted state-owned Canara Bank and Indian Bank to initiate proceedings against former directors of IL&FS, who are not part of the new board, to declare them as wilful defaulters.

Protection for Current Board Members: However, the NCLAT clarified that directors who are part of the new board of IL&FS and its various subsidiaries after October 1, 2018, would remain protected under its order.

The tribunal stated, "We are of the view that this protection shall extend to professional directors, who have been reappointed in IL&FS and subsidiaries, who are part of the present board." It further granted leave to the banks to proceed against those not covered under this protection.