The revised mechanism would provide for distribution of residual proceeds over and above liquidation value of assets to other than secured creditors.
The MCA has submitted the fresh affidavit in the company law tribunal representing the new IL&FS Board which took over the group in 2018.
In its affidavit filed on January 9, Rajesh Tiwari, Joint Director (Western Region) in MCA, also submitted to remove Power Finance Corporation (PFC) from among "top five creditors" as IL&FS group shares in Wind SPVs have been transferred to ORIX.
The affidavit has appealed the tribunal to declare and direct all financial creditors of the relevant IL&FS group entity, including group lenders, to be part of the Creditors' Committee constituted or to be constituted in accordance with the modified resolution framework.
Some of the creditors had earlier objected to internal IL&FS group companies as creditors as they had been involved in alleged financial bungling or fraud.
Inclusion of internal group firms among the secured creditors and part of Creditors' Committee would ensure they get the share of the proceeds realised by sale, disposal or closure of the defaulted companies.
Among other key submissions is a direction for first making payments towards the resolution process cost involving financial and transaction advisors, legal counsels and resolution consultants, among others. This will be followed by the creditors in accordance with Section 53 of Insolvency and Bankruptcy Code (IBC).
"Third, the remaining sale proceeds/termination amount/settlement amount to be distributed pro-rata to each class of creditors of the relevant IL&FS Group entity, adjusted for any recovery made by the relevant creditors on account of distribution under Section 53 of IBC, as contemplated above," the affidavit said.
IL&FS group, which has about Rs 91,000 crore in debt, is in the bankruptcy court following its defaults that shook the entire financial sector of the country and triggered the NBFC liquidity crisis.
During the period July 2018 to September 2018, two of its subsidiaries reported having trouble in paying back loans and inter-corporate deposits to lenders. This was followed by multiple subsidiaries defaulting and the group heading to bankruptcy.
( With inputs from IANS )