Bombay High Court Rules In Favour Of IL&FS In ₹848.80 Crore Recovery Suits
The Bombay High Court has decreed four commercial summary suits in favour of IL&FS Financial Services Ltd., directing the borrowers, guarantors and other parties named in the respective suits to jointly and severally pay about ₹848.80 crore in outstanding dues.
The amounts range from ₹53.94 crore to ₹321.46 crore across the four matters, with 9% interest from the date of filing until realisation.
Justice Gauri Godse held that IL&FS had complied with directions to impound the loan, guarantee and pledge documents and pay the deficit stamp duty. “The plaintiff is entitled to recover the outstanding dues as per particulars of claim,” the court observed.
It also recorded that compliance with the direction to pay the deficit stamp duty was complete.
The four suits were filed to recover amounts advanced under written contracts and negotiable instruments. SKIL Infrastructure Ltd. was the principal borrower in one matter and the corporate guarantor in the other three. Nikhil Gandhi was the personal guarantor in all four suits.
On February 18, 2020, the court granted conditional leave to defend. The condition required the amounts actually disbursed to the respective borrowers to be deposited. The deposits were not made, and non-deposit certificates were subsequently placed on record.
The court had earlier impounded the original loan agreements, guarantee letters and pledge agreements because they were insufficiently stamped.
After adjudication by the stamping authorities, IL&FS paid the additional stamp duty. It also produced the adjudication orders, payment receipts and original documents on record.
The court relied on the Bombay High Court's ruling in D. Shanalal v. Bank of Maharashtra. It held that when leave to defend is conditional on furnishing security and the security is not provided, the party is precluded from contesting the suit. The court also considered the later decision in K. R. Patel (HUF) v. M.M. Developers.
Justice Godse clarified that a judgment “forthwith” does not dispense with the court's duty to examine whether the relief sought is legally permissible. Even where plaint allegations are deemed admitted, the court must consider questions such as limitation, jurisdiction or an apparent statutory bar.
In these cases, the court found no legal bar to recovery. Since the conditions for leave to defend had not been met and the stamp duty directions had been complied with, it held that no further inquiry into IL&FS's entitlement to the decree was necessary.
The court also declined to award interest on interest. It held that 9% interest on the decretal amounts was reasonable from the date of filing of the suits until realisation.
In the first matter, involving Awaita Properties, Gajodhar Trading, Amkay Real Estate, Soothing Trading, Shantidoot Financial Services and Metropolitan Industries, the court directed them to jointly and severally pay ₹314.19 crore. The amount carries 9% interest from the date of filing until realisation.
In another matter involving Gujarat-Dwarka Portwest, Awaita Properties, Gajodhar Trading, Amkay Real Estate, Soothing Trading, Shantidoot Financial Services and Metropolitan Industries, the court ordered recovery of ₹321.46 crore. The amount also carries 9% interest from the date of filing until realisation.
A separate claim against Gujarat-Dwarka Portwest and Metropolitan Industries was decreed for ₹159.20 crore. The amount carries 9% interest from the date of filing until realization.
The fourth suit, involving SKIL-Himachal Infrastructure and Tourism and Metropolitan Industries, was decreed for ₹53.94 crore. The amount carries 9% interest from the date of filing until realisation.
The decrees presently do not operate against SKIL Infrastructure and Nikhil Gandhi, against whom proceedings remain stayed during their respective IBC moratoriums. An earlier order dated April 7, 2026 directed that the suits remain stayed against them until the respective moratoriums cease to operate.
The court granted IL&FS liberty to apply against them after the moratoriums end. There was no order as to costs
For Plaintiff: Advocates Ranjeev Carvalho a/w. Sachin Chandarana, Khushi Jain i/b. Manilal Kher Ambalal & Co.