[DHFL-Yes Bank scam] Kapil Wadhawan opposes DHFL discharge plea in Bombay High Court

Kapil Wadhawan, former promoter of Dewan Housing Finance Corporation Ltd. (DHFL), has opposed the plea filed by DHFL in Bombay High Court seeking discharge in the case pertaining to cheating and corruption involving its promoters and Yes Bank founder Rana Kapoor.

. Through his application filed by Rashmikant & Partners , Wadhawan sought to intervene in the writ petition filed by DHFL challenging an order of a special court rejecting the plea seeking discharge in the case being investigated by the Central Bureau of Investigation (CBI).

. After Justice Sandeep K Shinde formally permitted Wadhawan to intervene in the plea, Advocate Pravin Badhekar appearing for Wadhawan made his submissions in opposition of the plea.

. Badhekar argued that DHFL had approached the Courts with unclean hands by not arraigning Wadhawan as a party to the petition.

He submitted that the Monitoring Committee that had been appointed by the National Company Law Tribunal, Mumbai, after the resolution plan had been approved, was appointed to supervise the successful implementation of the plan.

He contended that multiple appeals had been filed challenging the NCLT order and till those were not decided, it was pre-mature for DHFL to have filed the application for discharge.

. He argued that the scheme mentioned in the Insolvency and Bankruptcy Code (IBC) provided for a mechanism and checklist which was required to be completed before it could be said that the successful resolution applicant had taken over the insolvent company.

. To further buttress his point, Badhekar showed Justice Shinde the resolution plan which had timelines and included payments. His contention was that the payments had not been fully complied with yet.

"In any event, the management or control of DHFL has not yet changed and vested in the resolution applicant being Piramal" , Badhekar argued.

. Badhekar's secondary argument was that in the event DHFL is discharged from the case, it will lead to a peculiar situation as the Special Court had already taken cognizance against DHFL as also cognizance of the supplementary chargesheet filed against DHFL.

He added further that even before the successful resolution applicant could be made a part of DHFL's management, if the petition is allowed, and DHFL is discharged, then it will be difficult for the prosecution to bring back DHFL into the case, if they are required to do so.

"There is no need to rush with the application, the trigger has not reached yet," Badhekar stated.

. DHFL was arraigned as an original accused in the case registered by CBI and had undergone the Corporate Insolvency Resolution Process (CIRP) as per order of NCLT, Mumbai.

Through the CIRP, Piramal Capital and Housing Finance Ltd had emerged as the successful Resolution Applicant, which was approved by the NCLT.

Piramal also filed a companion petition seeking discharge of DHFL as the successful resolution applicant after having made the highest bid of ₹37,000 crores.

. 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 which was rejected by the Special Court.

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 moved High Court and Wadhawan moved in opposition.

Due to paucity of time, the Court adjourned the hearing by a week in order to enable DHFL and Piramal to respond to the contentions of Wadhawan.

[DHFL-Yes Bank scam] Kapil Wadhawan opposes DHFL discharge plea in Bombay High Court

Neha Joshi

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