Kapil Wadhawan, erstwhile promoter of Dewan Housing Finance Limited (DHFL), has moved Supreme Court against National Company Law Appellate Tribunal (NCLAT) staying the order of the bankruptcy tribunal asking banks to consider his offer.
The lenders and the RBI-appointed administrator of DHFL had moved the NCLAT, challenging the order passed by the tribunal, saying there was no basis in law for such an order or the NCLT could not direct the committee of creditors (CoC) to consider a plan.
In a letter to the administrator in December, Wadhawan had reiterated his offer to pay the entire outstanding principal of Rs 91,158 crore to creditors — an upfront payment of Rs 9,000 crore and the remainder in the form of debt-to-equity conversion across 7-8 years.
Piramal Group, whose resolution plan for DHFL has been approved by all the stakeholders and was only awaiting the tribunal’s nod for closure of the process, moved the appellate tribunal challenging the NCLT order.
In its application, Piramal Group had said: "The impugned order throws open floodgates of litigation from all sundry … the adjudicating authority had no jurisdiction to entertain any application while ignoring the statutory timelines under Section 12A of the IBC".
The NCLAT asked the respondents — in this case Kapil Wadhawan — to file a reply within two weeks. The matter will be heard again on June 25. However, Wadhawan moved SC before that.
DHFL became the first financial services company to be referred to the NCLT by the RBI in November 2019 after it defaulted on its payments and the lenders failed to find a resolution under the June 7 circular of the RBI.
The creditors have claimed dues of Rs 87,000 crore. The liquidity crisis after the collapse of IL&FS in 2018 led to DHFL’s downfall.
Before the crisis, it was one of the largest mortgage lenders in the country.
The tribunal has said the pendency of the appeal before it should not come in the way of the NCLT passing orders in approving the resolution plan, on which hearing has concluded and the order is reserved.
The resolution plan of Piramal Group has been approved by the lenders, the Reserve Bank of India (RBI), and the Competition Commission of India (CCI).
The NCLT on May 19 had passed an order in which it said the second proposal of Wadhawan deserved to be examined on merits and put to vote by the CoC. The order asked the administrator of DHFL to present the offer of the erstwhile promoter before the CoC in 10 days and had scheduled the next hearing for May 31.
The lenders were mulling their options since the order came last week. Appealing the order in the appellate tribunal was one.
This is because the CoC had voted in favour of a resolution plan. The bankers were apprehensive of considering the settlement offer of the promoter because the account was declared “fraud” by them.
Wadhawan is in jail on money-laundering charges.
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