NCLAT stays NCLT order on DHFL
NCLT had said that the plan offered by Wadhawan must be weighed by lenders
NEW DELHI: The National Company Law Appellate Tribunal (NCLAT) on Tuesday stayed the direction of National Company Law Tribunal (NCLT) Mumbai directing the lenders of DHFL to consider the offer by the debtridden mortgage firm’s erstwhile promoter Kapil Wadhawan.
A vacation bench of NCLAT comprising Acting Chairman Justice A I S Cheema and Member Technical V P Singh stayed the order passed by the Mumbai bench of the NCLT.
NCLT Mumbai had directed the settlement plan offered by Wadhawan to be considered by the lenders of DHFL, one of the lawyers engaged in the matter said.
Meanwhile, the appellate triUnion bunal also clarified that its order should not come in the way for NCLT to decide the approval of the plan selected by the Committee of Creditors (CoC), the lawyer added.
In January this year, the CoC voted in favour of selling DHFL to the Piramal Group under the bankruptcy process.
NCLAT’s direction came over an urgent petition moved by the Bank of India on behalf of the CoC of Dewan Housing Finance Corporation Ltd (DHFCL).
The order of the NCLAT is yet to be updated on the website of the appellate tribunal.
Last week, NCLT Mumbai bench asked the RBI-appointed administrator of DHFL to present the settlement plan offered by jailed Wadhawan to the CoC. The tribunal gave ten days’ time for the CoC to consider the offer.
Last year, Wadhawan had made his settlement offer to the CoC and it was rejected, citing lack of credibility and the valuations attached to the proposed asset sales.
In the plan, Wadhawan had proposed to repay lenders by selling assets. In November 2019, RBI had referred DHFL— then the third-largest pure-play mortgage lender—for resolution under the Insolvency and Bankruptcy Code (IBC).
DHFL, a shadow lender, or non-banking financial company that disburse home loans before its collapse was the first financial institution in India to be dragged to the NCLT. DHFL owes around ₹91,000 crore to various creditors.
After an aggressive bidding war, the Piramal group emerged as the winner for DHFL. On January 15, the creditors to the DHFL voted in favour of Piramal as the winning bidder. Piramal got 94% votes. A resolution plan needs a minimum of 66% votes to be passed by lenders, who can vote a preference for more than one bidder.
Oaktree, an American asset management company, secured around 45% votes, while another bidder, Adani Capital, is believed to have got 18 percent votes. Oaktree’s bid for DHFL was at ₹38,400 crore against Piramal’s ₹37,250 crore. Piramal’s offer, however, had a higher upfront cash payment and that swung support in its favour.
DHFL collapsed under the weight of a severe liquidity crunch after Infrastructure Leasing & Financial Services (IL&FS) went bust in late 2018.