NCLAT Upholds Bank Guarantee Directive in IL&FS Property Dispute

The NCLAT directed Brookfield-backed Chronos Properties to renew the bank guarantee for acquiring IL&FS's Bandra Kurla Complex property. It upheld IL&FS's right to enhance purchase terms, requiring Chronos's compliance to avoid disqualification. Both parties must complete pleadings by January, with a hearing in February.

On Friday, the National Company Law Appellate Tribunal (NCLAT) mandated Brookfield-supported Chronos Properties to renew its bank guarantee for the acquisition of IL&FS's flagship property in Bandra Kurla Complex. This decision serves to prevent disqualification during the acquisition process.

The NCLAT's interim order also restrains the financially troubled IL&FS group from creating third-party rights on its headquarters until the resolution of the ongoing appeal. The tribunal emphasized compliance with the Performance Bank Guarantee by Chronos as crucial to maintaining its bid status.

This directive follows Brookfield's appeal against a National Company Law Tribunal (NCLT) order that upheld IL&FS's decision to increase the property sale price, adhering to the value-maximization principle of its resolution framework. Both parties are instructed to complete legal submissions by January 16, with a subsequent hearing set for February 2.

(With inputs from agencies.)