IL&FS has approached the Mumbai Bench of the National Company Law Tribunal (NCLT) to recover ₹185.88 crore in excess managerial remuneration allegedly paid to 23 former directors after the company and two key subsidiaries recast their financial statements for five financial years.
The application seeks directions to the former directors, along with IL&FS Financial Services (IFIN) and IL&FS Transportation Networks (ITNL), to return the amounts. IL&FS has also requested an interim order requiring the identified former directors to deposit the alleged excess remuneration or undue gains in a separate interest-bearing fixed deposit account while the matter is heard.
According to the application, remuneration was paid on the basis of profits reported in the original accounts for 2013-14 to 2017-18. After the accounts were recast following directions from the NCLT, the financial results showed substantial losses instead of profits.
The recast accounts showed a cumulative loss of ₹9,415.24 crore for IL&FS against a previously reported profit of ₹1,865.73 crore. IFIN’s recast loss was ₹5,655.22 crore, compared with an earlier reported profit of ₹1,015.67 crore. ITNL reported a recast loss of ₹1,628.44 crore against a previously reported profit of ₹1,246.33 crore.
The Ministry of Corporate Affairs directed IL&FS to recover the excess remuneration. The company subsequently issued notices to all 23 former directors, but said they had raised objections and that no refund had been made by most of the former managerial personnel despite multiple notices and reminders.
IL&FS said only three former non-executive directors—two from IL&FS and one from ITNL—had refunded money. Of the total ₹187.02 crore identified as refundable, ₹91.09 lakh, net of ₹22.78 lakh paid as income tax, had been returned. The company described this as less than 0.5 per cent of the amount.
The respondents include former independent directors R C Bhargava, Jaithirth Rao, Michael Pinto, S B Mathur and Rina Kamath of IL&FS; Subhalakshmi Panse, Surinder Singh Kohli and Neera Saggi of IFIN; and Deepak Dasgupta and Pradeep Puri of ITNL. Former executive directors named in the proceedings include Hari Sankaran, Arun Kumar Saha, Ramesh Bawa and K Ramchand. In the case of former IL&FS chairman Ravi Parthasarathy, who has died, the recovery claim has been initiated against his legal heir.
IL&FS said it was pursuing recovery from managing directors, whole-time directors, managers and chief executive officers under Section 199 of the Companies Act. It also cited Section 197(9), which requires any director, including a non-executive or independent director, to refund remuneration drawn beyond prescribed limits.
The former directors have disputed the recovery notices on several grounds, according to the application. Their objections include the argument that the recast financial statements cannot retrospectively invalidate remuneration approved on the basis of duly audited original accounts, that the recast accounts are not audited statements, and that the notices were vague because the amounts differed between initial and subsequent communications. IL&FS described the objections as baseless and said the differences resulted from a calculation variation that had been corrected.
The recovery proceedings are part of the wider resolution of the infrastructure financing group, whose financial crisis prompted the Central government to supersede its board on October 1, 2018. As of October 2018, the group had fund-based debt of ₹94,215 crore out of total external debt of ₹99,355 crore. The group’s four key holding companies accounted for about ₹48,000 crore, or nearly 51 per cent, of that exposure.
IL&FS has said its debt resolution process involves monetisation and the termination or settlement of payments by group entities from concessioning authorities and contractual counterparties. It has maintained an overall debt resolution target of ₹61,000 crore and said the new board had executed steps to resolve about ₹50,387 crore of group debt as of June 30, 2026. The latest recovery application will now be considered by the Mumbai Bench of the NCLT.
