NCLT Mumbai Upholds IL&FS’ Contractual Power to Revise Sale Price of BKC Headquarters; Rejects Chronos’ Plea to Enforce ₹1,080-Crore LoI
Pranav B Prem
The National Company Law Tribunal (NCLT), Mumbai, has held that Infrastructure Leasing & Financial Services (IL&FS) was contractually authorised to unilaterally amend the Letter of Intent (LoI) and revise the bid consideration for the sale of its IL&FS Financial Centre located at Bandra Kurla Complex (BKC), Mumbai. Rejecting the plea of Chronos Properties Private Limited seeking enforcement of the original bid value of ₹1,080 crore, the Tribunal ruled that execution of the definitive agreement could not be compelled when the contract itself expressly reserved unilateral modification rights in favour of IL&FS.
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The dispute arose from a bid process under the IL&FS Resolution Framework. Chronos’ bid of ₹1,080 crore for the BKC headquarters was approved by the Committee of Creditors on 17 December 2021, by the IL&FS New Board on 27 January 2022, by Justice (Retd.) D.K. Jain on 8 March 2022, and finally by the NCLT on 23 September 2022. The LoI was executed in March 2022, and Chronos furnished a performance guarantee of 10% of the consideration. Pending actions included permissions from the Mumbai Metropolitan Region Development Authority, which granted its sanction on 16 April 2024. Chronos thereafter proceeded with stamp adjudication, carried out inspection of original documents in June 2024, and repeatedly requested execution of the definitive agreement.
On 16 August 2024, IL&FS issued a unilateral amendment revising the bid consideration to ₹1,481 crore based on fresh valuation inputs. Invoking the value-maximisation principle under the Resolution Framework, the company asserted that the LoI authorised unilateral amendment, including by imposing “additional financial obligations.” Chronos approached the Tribunal seeking to quash the amendment and compel execution of the transaction at the original bid value of ₹1,080 crore, arguing that the LoI was binding and incapable of unilateral alteration.
The Tribunal examined the contractual clauses and held that the LoI clearly empowered IL&FS to “amend, modify or supplement the LoI, including with respect to the monetary obligations of the bidder,” while simultaneously giving Chronos the right to terminate the agreement within seven days if the revision was unacceptable. The bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar observed that both parties had voluntarily agreed to a framework where IL&FS could issue unilateral amendments and the bidder’s remedy lay in termination rather than enforcement of the original price. It concluded that “granting directions to execute a definitive agreement between the parties would amount to directing specific performance of the contract despite IL&FS having the unilateral power to amend, modify or supplement the LoI”.
IL&FS additionally argued that Chronos stood disqualified because its performance guarantee expired on 16 April 2025. Chronos countered that IL&FS had not communicated any requirement for renewal and volunteered to deposit the equivalent amount with the Tribunal. Accepting Chronos’ explanation, the Tribunal recorded that IL&FS “never decided or communicated any further period for extension or renewal of the Performance Bank Guarantee,” and held that no disqualification could be attributed to Chronos on this ground.
The Tribunal held that the LoI remained binding but retained its contractual modification architecture. It declined to restore the original bid value or compel execution at ₹1,080 crore and found that Chronos’ remedy, if dissatisfied with the revised consideration, lay in invoking its right to terminate rather than enforcing the earlier price. At the same time, the Tribunal directed Chronos to tender the bank guarantee or demand draft to the Registrar within 30 days, failing which it would stand disqualified from acquiring the BKC property under the bidding terms.
Ultimately, the Tribunal upheld IL&FS’ contractual power to revise the bid price and rejected Chronos’ plea to enforce the ₹1,080-crore LoI, while clarifying that the bidder remains eligible to participate subject to depositing the bank guarantee within the stipulated period.
Appearance
For Chronos Properties: Janak Dwarkadas, Sr. Advocate, Ritvik Kulkarni & Benaisha Hansatia, Advocates
For IL&FS: Zal Andhyarujina, Sr. Advocate, Kuber Dhewan, Neeharika Aggarwal, Kaustubh Srivastava, Naomi Ting, Advocates
For Union of India: Advocates Aditya Shukla and Onshi Jakhar
Cause Title: Chronos Properties Private Limited vs Infrastructure Leasing & Financial Services Limited
Case No: CA/262/2024 in CP No. 3638/(MB)/2018
Coram: Judicial Member Sushil Mahadeorao Kochey, Technical Member Prabhat Kumar
