NCLAT sets aside order to consider Wadhwan’s offer
NEW DELHI: The National Company Law Appellate Tribunal (NCLAT) has set aside an earlier order of the Mumbai bench of the NCLT, which had directed the administrator of the debtridden DHFL to put the second settlement proposal by erstwhile promoter Kapil Wadhwan before its lenders for consideration.
The appellate tribunal observed that NCLT has passed directions to consider the second proposal from Wadhwan, despite the fact that the Committee of Creditors (CoC) of DHFL had already by an overwhelming majority approved the Piramal Capital & Housing Finance’s resolution plan and the administrator had applied before it for its approval.
Citing a recent judgement passed by the Supreme Court in the case of Ebix Singapore, the NCLAT said “there was no scope for negotiations between the parties once the CoC has approved the resolution plan”.
“The said exercise was beyond the jurisdiction of the adjudicating authority (NCLT), hence unsustainable and liable to be set aside,” said a threemember NCLAT bench in its judgement passed on January 27, 2022. The NCLAT direction came over a batch of petitions filed by Union Bank of India on behalf of the CoC, DHFL’s Administrator and Piramal Capital & Housing Finance - successful resolution applicant challenging NCLT order.
Earlier on May 19, 2021, passing an order, the National Company Law Tribunal (NCLT) had directed the administrator of Dewan Housing Finance Corporation Ltd (DHFL) to place the second offer by Wadhwan before CoC for consideration, decision, voting and to inform it within ten days.
This said order was challenged by CoC, Administrator and Piramal before the appellate insolvency tribunal NCLAT.
During the pendency of this appeal before the appellate tribunal, NCLT had on June 7, 2021, passed an order approving the resolution plan of Piramal Capital & Housing Finance Ltd.
During the proceedings, Union Bank had contended that there is no provision in the Insolvency and Bankruptcy Code (IBC) by which NCLT is empowered to pass such order. Moreover, the second offer was neither submitted in compliance with the RFRP (Request for Resolution Plan) nor compliance with Section 12A of the IBC Code.