[DHFL-Yes Bank scam] DHFL moves Bombay High Court seeking discharge in CBI case

Dewan Housing Finance Corporation Ltd. (DHFL) has approached the Bombay High Court challenging an order of a special court rejecting the plea seeking discharge in the cheating and corruption case involving its promoters, Kapil and Dheeraj Wadhawan, and Yes Bank founder Rana Kapoor. .DHFL was arraigned as an original accused in the first information report (FIR) registered by the Central Bureau of Investigation (CBI) and had undergone the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC) before the National Company Law Tribunal (NCLT) Mumbai. .Through the CIRP, Piramal Capital and Housing Finance Ltd had emerged as the successful Resolution Applicant, which was approved by the NCLT.Pursuant to the NCLT order, DHFL filed miscellaneous application for ceasing proceedings as provided under Section 32A of IBC seeking discharge or in the alternative to drop proceedings against DHFL..Partly allowing the application, the special court rejected DHFL's prayer for discharge and instead the Interim Monitoring Committee was discharged (which was not even an accused in the case).The court also held that DHFL will be prosecuted through its promoters, the Wadhawan Brothers, who had allegedly been responsible for the conduct of DHFL at the time of the commission of the alleged offence despite being ousted by RBI in 2019..Aggrieved by the order, DHFL approached the High Court through a petition for quashing the order. .Senior Advocate Ravi Kadam appearing for DHFL, argued that Section 32A of the IBC lays down a mandate for the Corporate Debtor to be absolved of liability from all criminal offences committed prior to commencement of CIRP form the date of approval of the Resolution Plan.Hence, the corporate debtor erred in rejecting DHFL's prayer for discharge..He stated that the order served no purpose other than to delay or derail the implementation of resolution plan which seeks to replay the creditors. The order directing DHFL to be represented through Wadhawans is in the teeth of various orders of RBI, NCLT and without jurisdiction, Kadam argued. .Advocate Hiten Venegaokar appearing for CBI, submitted that the plea was bad in law as the Wadhawan brothers had not been arraigned as "necessary respondents" in the petition..He informed the Court that the order of the NCLT approving the CIRP was under challenge before the National Company Law Appellate Tribunal (NCLAT).Since the appeal has not attained finality yet, Section 32A of the IBC is not attracted which seems to be the basis for seeking discharge..Venegaokar concluded that there is no error of law or lack / excess of jurisdiction by the court, and in any case there exists an alternate remedy and, hence the petition was not maintainable. .Piramal also filed a companion petition seeking discharge of DHFL as the successful resolution applicant after having made the highest bid of ₹37000 crores. Senior Advocate Abad Ponda adopted Kadam's submissions on the legal provisions of Section 32A of IBC..He submitted that after having made the bid, Piramal was entitled to get a "clean slate" company and the NCLT order enabled that. He added that even though the NLCAT proceedings are to attain finality there was no stay on the CIRP approval order..An intervention was also sought in the plea by Kapil Wadhawan. However, due to paucity of time, Justice Sandeep K Shinde adjourned the matter for hearing the intervenor on September 27, 2021.

[DHFL-Yes Bank scam] DHFL moves Bombay High Court seeking discharge in CBI case

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