DHFL approaches Bombay HC to discharge name from CBI prosecution

dhfl, cbi, CIRP, IBC, HC

Troubled home financier Dewan Housing Finance Ltd (DHFL) has sought the Bombay High Court’s intervention to discharge its name and drop proceedings against it in an ongoing investigation by the Central Bureau of Investigation (CBI).

DHFL has argued that since it had been taken over by Piramal Capital & Housing Finance Ltd, it should be absolved from all earlier liabilities.

The company has challenged a special Central Bureau of Investigation (CBI) court order of August 20, which had given partial relief by discharging the interim monitoring committee but had rejected DHFL’s prayer to discharge it from the case.

DHFL said once a company gets admitted under the Corporate Insolvency Resolution Process (CIRP) under Section 32 (A) of the Insolvency & Bankruptcy Code (IBC), it gets absolved from earlier liabilities and the new owner gets a clean company.

“Section 32 (A) of IBC – which came into effect on December 28, 2019 – lays down a mandatory direction for a Corporate Debtor (DHFL) to be absolved from all the liabilities from all criminal offences committed prior to the commencement of CIRP,” the company said in its petition.

ET has seen a copy of the plea.

The company has further argued that the date of approval of the resolution plan must result in a change of management and control of the corporate debtor.

The special CBI court, while discharging the administrator and the monitoring committee from the case, had observed that the company would be prosecuted through accused no. 2 (Kapil Wadhawan) and accused no. 3 (Dheeraj Wadhawan), who have been held responsible for the conduct of DHFL at the time of commissioning of the alleged offences.

After hearing the primary contentions of the company as well as the CBI, Justice SK Shinde posted the matter for further hearing to September 27.

“The (CBI court) order serves no other purposes than to delay and/or derail the implementation of the resolution plan which seeks to repay the creditors of the petitioner (DHFL), which are mostly public sector and nationalized banks,” the petition argued further.

When contacted, Ravi Kadam, senior advocate representing DHFL in the case, confirmed the development.

In July, the National Company Law Tribunal (NCLT) had permitted Piramal Capital and Housing Finance to take over DHFL.

Piramal has offered to pay Rs 35,250 crore to DHFL’s creditors.

Currently, of its around Rs 87,000 crore debt, the company owes close to Rs 40,000 crore to banks.

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