IL&FS has approached the Mumbai Bench of the National Company Law Tribunal (NCLT) to recover ₹185.88 crore in alleged excess managerial remuneration paid to 23 former directors of the group and two key subsidiaries after their financial statements were recast for five years.
The application names former directors of IL&FS, IL&FS Financial Services (IFIN) and IL&FS Transportation Networks (ITNL) as respondents. The company has also sought an interim direction requiring the former directors to deposit the claimed excess remuneration or undue gains in a separate interest-bearing fixed deposit account while the case is heard.
According to the application, the remuneration was paid on the basis of profits reported in the original accounts. Following the recasting of the financial statements for financial years 2013-14 to 2017-18, those entities were shown to have incurred losses instead.
The recast accounts recorded a cumulative loss of ₹9,415.24 crore for IL&FS against a previously reported profit of ₹1,865.73 crore. IFIN’s loss was shown at ₹5,655.22 crore, compared with an earlier reported profit of ₹1,015.67 crore. ITNL reported a loss of ₹1,628.44 crore against a previously stated profit of ₹1,246.33 crore.
IL&FS said the Ministry of Corporate Affairs had directed it to recover the excess remuneration. The company subsequently issued notices to all 23 former directors, but said objections were raised and no refund was made by the former managerial personnel despite multiple notices and reminders.
Of the total ₹187.02 crore identified as refundable, only ₹91.09 lakh had been returned by three former non-executive directors—two from IL&FS and one from ITNL—after accounting for ₹22.78 lakh paid as income tax. The amount refunded is less than 0.5 per cent of the total refundable sum, the application said.
The former directors named in the proceedings include 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 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 amounts drawn beyond prescribed limits.
The respondents have disputed the notices on grounds including that the recast financial statements cannot retrospectively invalidate remuneration approved on the basis of audited original accounts. They have also argued that the recast accounts are not audited statements and that the amounts cited in successive notices differed. IL&FS described those objections as baseless and said the variation resulted from a calculation issue that had been corrected.
The recovery proceedings form part of the wider resolution of the IL&FS debt crisis. As of October 2018, the group had fund-based debt of ₹94,215 crore against total external debt outstanding of ₹99,355 crore. The group has set an overall debt-resolution target of ₹61,000 crore and said its new board had executed steps to resolve about ₹50,387 crore of group debt as of June 30, 2026.
The Centre superseded IL&FS’s board on October 1, 2018, after the crisis disrupted the financial system. A new board was appointed to manage the group, while the NCLAT-backed resolution framework provided protection to IL&FS companies from recovery of certain further dues and immunity to newly appointed directors for past actions of suspended directors and officers. The NCLT will now consider IL&FS’s recovery application.
