DHFL Insolvency: Kapil Wadhawan Set To Challenge Approval To Piramal’s Plan
Dewan Housing Finance Corp., its administrator and creditors’ committee should brace themselves for a lengthy litigation ahead.
Arguing for DHFL’s administrator, senior advocate Ravi Kadam told the National Company Law Appellate Tribunal that since Piramal Group’s resolution plan has been approved, the direction by the Mumbai NCLT to the creditors’ committee cannot survive.
On May 21, the National Company Law Tribunal had directed DHFL’s committee of creditors to consider and vote on Kapil Wadhawan’s settlement proposal within 10 days. The appellate tribunal had granted an interim stay on this direction.
Wadhawan, Kadam said, can challenge approval of resolution plan now.
Wadhawan’s counsel JP Sen objected to it and said just because Piramal’s plan has been approved, doesn’t mean the NCLT’s direction to the CoC to consider the settlement proposal has become infructuous. Sen also said an appeal against approval to Piramal’s plan will be filed in a day or two.
Settlement proposal will become relevant in the context of challenge to the resolution plan. CoC, administrator can withdraw their appeal against the NCLT direction of considering Wadhawan’s plan. But setting aside the NCLT order [of May 21] just because plan is approved will be erroneous.JP Sen, Senior Advocate and Counsel for Wadhawan
The NCLAT will have to decide on the tribunal’s direction to CoC to vote on Wadhawan’s plan, Sen argued.
The appellate tribunal has now decided to hear CoC, administrator’s appeal against the NCLT’s May 21 order and Wadhawan’s appeal against sanction to resolution plan together. The matter will come up for hearing next on Aug. 2.
This is only one leg of the lengthy legal battle.
The second has reached the Supreme Court. Wadhawan has challenged the interim stay on CoC vote saying the appellate tribunal has gravely erred in staying the NCLT’s direction thereby effectively closing his rights.
And the final challenge that the CoC is likely to face is from DHFL’s public depositors.
While approving Piramal’s plan, the NCLT had asked the CoC to consider a higher allocation to DHFL’s public depositors. On June 23, 89.19% of the financial creditors voted against a proposal to increase payouts to fixed depositors and non-convertible debenture holders in the company.