IL&FS Case: NCLAT Dismisses Plea By Wife, Daughter Of Former CEO

The NCLAT has dismissed an appeal filed by the wife and daughter of a former executive of IL&FS group that challenged a tribunal order permitting the government to implead them in the oppression and mismanagement case at the infrastructure conglomerate.

The National Company Law Appellate Tribunal, while dismissing the plea by Ashakiran and Akanksha Bawa, wife and daughter of Ramesh C Bawa, former managing director and chief executive officer of the debt-ridden group, against a National Company Law Tribunal order, also dismissed their plea that sought to reopen their bank accounts that were sealed.

A three-member bench of the NCLAT comprising Justice Jarat Kumar Jain and tribunal members Balvinder Singh and Ashok Kumar Mishra observed that the presence of the Bawas would enable the NCLT to effectively decide the case. “Impleading a party doesn't mean that the charges are proved,” the appellate tribunal said.

The Ministry of Corporate Affairs had moved an application in the NCLT in April 2019 to implead the duo in the case of oppression and mismanagement in the IL&FS group entities.

The ministry had alleged that Ramesh Bawa had contravened the tribunal's order by transferring amounts to bank accounts of his wife and daughter. It had also alleged that the transferred amounts were originally siphoned from the accounts of IL&FS and were withdrawn subsequently despite an order that prohibited the operation of bank accounts and lockers. The NCLT had allowed their impleadment in September last year.

The counsel for the Bawas said at the NCLAT that the mother-daughter duo didn't break the NCLT's order as they operated the lockers for personal withdrawals.

The Companies Act only allows for the impleadment of a director, manager, officer or any party which knowingly participates in a fraudulent act against public interest. As Akanksha and Ashakiran were third parties, they cannot be subjected to the oppression and mismanagement case, the counsel said.

The director appearing on behalf of the ministry said the duo was a proper and necessary party to the case, as in their absence, an effective decree cannot be passed by the NCLT.

Previously, the appellate tribunal had also dismissed an appeal by Deloitte Haskins and BSR & Associates—the erstwhile auditor of IL&FS and its non-bank lending arm—where they had challenged their impleadment in the oppression and mismanagement case at the infrastructure conglomerate.

The Mumbai bench of the National Company Law Tribunal is currently hearing the case.