Mumbai: The National Company Law Appellate Tribunal (NCLAT) has allowed one of the senior officials of IL&FS, Seshadri Rengarajan, to withdraw up to 2 lakhs monthly, while continuing NCLT’s restraint order to not sell, pledge or create any third-party rights on movable and immovable assets.

S. Rengarajan, managing director of IL&FS securities, had moved to the NCLAT against the 3 December order of the Mumbai Bench of the National Company Law Tribunal (NCLT), which barred him along with other former senior board members of IL&FS to sale, pledge or create any third-party rights on movable and immovable assets.

“During the pendency of the appeal, we allow the appellant (S. Rengarajan) to withdraw a sum of 2 lakh per month from any one of the bank accounts of the appellant after intimating the tribunal," a division bench of the NCLAT headed by Justice S.J. Mukhopadhaya and Justice Bansi Lal Bhat said late evening on Wednesday.

The NCLAT order also said the appellant was prohibited from withdrawing any further amount from the said or any other account until further orders.

The NCLAT upheld NCLT Mumbai Bench’s order, but allowed the withdrawal of 2 lakh monthly. This is the second such order by NCLT against the former board members of any companies, after a similar order was passed against former independent directors of companies owned by Nirav Modi and his uncle Mehul Choksi in the case of over $2 billion alleged fraud at the Punjab National Bank (PNB).

Earlier, on 3 December, NCLT had passed an interim order to not sell, mortgage or create any third-party rights on the movable and immovable assets of nine former key managerial people of IL&FS. The court also directed them to disclose their securities and bank accounts within the country and overseas.

The other people affected by the NCLT order included Ravi Parthasarathy, A.K. Saha, Hari Sankaran, G. Ramachandran, R.C. Bawa, Mukund Sapre, Pradeep Puri, and Vibhav Kapoor.

IL&FS accumulated a debt of more than 91,000 crore and defaulted on some of its commitments. At present, the newly appointed board is trying to sell off the assets of the group to reduce debt and revive the company.

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