[Breaking] PMC Bank Crisis: Bombay HC appoints 3-member committee chaired by former HC Judge S Radhakrishnan for speedy disposal of HDIL assets

The Bombay High Court on Wednesday appointed a three-member committee headed by retired High Court Judge, S Radhakrishnan for the speedy disposal and auction of Housing Development and Infrastructure Limited (HDIL) assets and the distribution of such proceeds on priority to the crisis-hit Punjab and Maharashtra Cooperative Bank (PMC Bank) depositors..The Court asked the former judge of the Bombay High Court, Justice (Retired) S Radhakrishnan to select the other two members and give its progress report before next hearing on April 30..The respondents, Wadhawans, will bear the costs for the committee..A Division Bench of Justices Ranjit More and SP Tavade passed an 18-page judgment in a Public Interest Litigation (PIL) filed by one, Sarosh Damania, seeking public auction of all HDIL assets, either mortgaged with the PMC Bank or attached by the Economic Offences Wing (EOW), Mumbai..Last month, Justice More had noted that in interest of the bank and its depositors, the assets must be sold at the earliest. After hearing submissions last month, the Court had reserved its judgment.The petitioner, Damania, had claimed nearly Rs, 4,635 crore as dues by HDIL and unencumbered assets of nearly Rs. 2,600 crores..Moreover, to ensure cooperation with the Committee, the Court also directed Rakesh and Sarang Wadhawan to be shifted from Arthur Road jail to their Bandra residence, where they will be in the custody of two guards each until further orders. The guards are to ensure that the respondents are not taken outside the jurisdiction of the High Court.We are conscious of the plight lakhs of depositors who had deposited their their hard earned money and life's saving in PMC Bank...Respondents (Rakesh and Sarang Wadhawan) are instrumental for huge fraud perpetuated by them through HDIL and other companies.Bombay High Court.The High Court-appointed committee is to identify all properties of the companies owned, controlled or promoted by the respondent Wadhawans which are mortgaged with PMC Bank..The committee with Justice Radhakrishnan as its Chairman will also receive and collect property documents, databases and other records of the PMC Bank from the Economic Offences Wing, the Enforcement Directorate and the Wadhawans..The Court further directed the PMC Bank to give a list of depositors with the details of dues payable to them. The Court noted that the amount realised from the sale would be made available for direct distribution to the depositors.The Court has also directed that in case third party interests of respondents arise, the Wadhawans would ensure full cooperation to resolve such issues..The Court went on to note,"Wadhawans would ensure that no roadblocks are created in smooth distribution of property by Committee.".The Court added that if the amount received is not sufficient to meet the dues of PMC Bank and there is shortfall, the committee would identify other properties owned by Wadhawans. As noted in the order,"If amount received is still not sufficient, then committee would dispose of all unencumbered properties owned or promoted by respondents (Rakesh and Sarang Wadhawan).".Advocate Anoop Patil appeared for petitioner..Last month, Senior Counsel Vikram Chowdhary for Sarang Wadhawan had filed an affidavit in reply to the plea and had submitted that he has no objection if all encumbered properties are sold for recovery of the monies payable to the PMC Bank. .Wadhawan disclosed a list of 69 immovable and 33 movable properties belonging to HDIL or its subsidiaries..Moreover, Advocate Hiten Venegaonkar, appearing for the Enforcement Directorate (ED) which is probing the matter, had told the Court that the agency has not attached the encumbered properties, keeping in mind the interest of the depositors. .However, it has attached three bungalows, five flats, bank account with deposits of nearly 8 crores, jewellery and some other assets of the HDIL promoters..The Court has posted the matter for further hearing on April 30, 2020 to examine the progress report by the Committee..[Read Order here]