The National Company Law Appellate Tribunal (NCLAT) on Tuesday stayed the Mumbai NCLT’s order directing the administrator of Dewan Housing Finance (
) to consider a settlement proposal from its former promoter Kapil Wadhawan.
Wadhawan could file a case in the Supreme Court challenging the stay. Mumbai NCLT is likely to approve
’s resolution plan by May 31.
The division bench, headed by Justice AIS Cheema and VP Singh in an oral order stayed the directive passed by the NCLT Mumbai on May 19.
-appointed administrator, the committee of creditors (CoC) and the Piramal
group, which emerged successful in the bids for the indebted home financier, filed three separate applications challenging the order in favour of the ousted promoter. The matter is now slated for hearing on June 25 at the NCLAT.
“We are awaiting a copy of the order before we take any decision as to the next steps including a possible challenge in the Supreme Court,” said Rohan Dakshini, partner at Rashmikant and Partners, which appeared on behalf of Kapil Wadhawan.
“Only after we have reviewed the order would we be able to take instructions from our client as to whether he is interested in litigating this matter further as he is also anxious for the resolution of DHFL
to be completed as soon as possible,” Dakshini said.
The latest NCLAT order does not debar the insolvency court in Mumbai from pronouncing its decision on the resolution plan submitted by the Piramal group, which was already approved by lenders and the RBI.
The appellate tribunal also clarified that this case will not stand in the way of approving the resolution plan of the successful resolution applicant.
Tushar Mehta, Solicitor General of India, who appeared for the CoC, argued that this NCLT order will destroy the entire fabric of the insolvency and bankruptcy code (IBC
) if it becomes a precedent.
“The proposal of the former promoter is not viable and that decision was already taken by the CoC,” argued Mehta, who appeared with senior counsel Shyam Diwan.
“Most of the investigation agencies are investigating and that is something not factored in by the NCLT,” he said.
Senior Advocate Abhishek Manu Singhvi, appearing for the Piramal Capital & Housing Finance, argued that what Wadhawan calls a proposal is just a letter, not a resolution plan.
Senior Advocate, Ravi Kadam, defending the RBI appointed Administrator, informed the appellate tribunal that the tribunal has reserved its order for the approval of the resolution plan.
Sudipto Sarkar, a senior advocate, defended Wadhawan saying that 65% of the creditors are deposit and bondholders.
“Our proposal intends to pay them in full,” said Sarkar.
Mid-January, billionaire Ajay Piramal won the bankruptcy bid for DHFL, trumping distressed fund Oaktree Capital and Adani Capital.
“In view of the clarification given by the NCLAT, the resolution plan can be heard and approved by the NCLT,” said Ashish Pyasi Associate Partner Dhir & Dhir Associates. “This will give some respite to lenders and the resolution applicant.”
Of the Rs 87,000-odd crore debt, the company owes close to Rs 40,000 crore to banks. Others include bondholders and fixed deposit owners.