Rakesh Wadhwan\, director of HDIL\, loses appeal against initiating insolvency proceedings
Director of beleaguered firm Housing Development and Infrastructure Ltd (HDIL), Rakesh Wadhwan, lost his appeal in the National Company Law Appellate Tribunal (NCLAT) against an order by the National Company Law Tribunal (NCLT) initiating insolvency proceedings against the realtor.
In its judgement on Monday, a two-judge bench headed by acting chairperson Justice Bansi Lal Bhat said there was no need for interference with the NCLT order dated August 20, 2019.
In August last year, Bank of India (BOI) approached the Mumbai bench of the NCLT claiming that HDIL had failed to repay its dues amounting to Rs 522 crore, upon which the tribunal admitted the case under section 7 of the Insolvency and Bankruptcy Code (IBC).
This was the second time the bank dragged the realtor to insolvency court after initiating the process in 2018. In August that year, HDIL proposed a one-time settlement on the basis of which the insolvency petition was withdrawn.
However, HDIL defaulted on the settlement payments as well by dishonouring its post-dated cheques.
“It is pertinent to mention that statutory provision under the Insolvency and Bankruptcy Code, 2016 does not permit to provide several opportunities to Corporate Debtor in hope of the settlement. However, the Adjudicating Authority has tried his best to afford ample opportunity to both the parties to settle the matter amicably. But despite that, the Corporate Debtor has failed to make the payment or arrive at a settlement,” the NCLAT judgment said.
Currently, Wadhwan is lodged with his son Sarang Wadhwan in the Arthur Road central prison in connection with the Rs 6,670 crore Punjab and Maharashtra Co-operative bank scam. However, he was shifted to GT hospital last Friday after testing positive for Covid-19.
Both the Wadhwans were arrested on October 3 last year by the Economic Offences Wing (EOW) in Mumbai after they were named in the FIR registered by Reserve Bank of India on September 30.
In its charge sheet, the EOW said Rakesh Wadhwan was the key accused in the case as the ‘patriarch’ of HDIL and had planned the fraud by obtaining loans with the help of others accused. So far 15 others have been arrested in the case.