Supreme Court Rejects DHFL Fixed Depositors’ Plea Seeking Release Of Dues
The Supreme Court has dismissed the petition by fixed deposit holders of Dewan Housing Finance Corporation Ltd. seeking release of their deposits before the beleaguered home financier restarts lending.
The top court bench, headed by Justice L Nageswar Rao, asked the deposit holders to go back to the National Company Law Tribunal. The court said it didn’t intend to interfere in the issue at this stage as the deposit holders are being represented by their authorised representative in the committee of creditors of DHFL. The court said it had no doubt that the CoC would address the concerns of the deposit holders as well.
“We leave it open to the appellants to raise all points and contentions before the CoC, the administrator and if necessary, the NCLT,’’ read the Supreme Court’s judgment.
The apex court had reserved the judgment in the case on Jan. 23 after hearing the arguments from all the parties. The fixed deposit holders had argued that if DHFL was a going concern and was competent to lend and receive deposits, then it couldn’t argue against paying them.
A study of the relevant portions of the National Housing Bank Act, 1987, and the Reserve Bank of India Act, 1934, the petitioners argued, make it clear that “statutory repayment of deposits to petitioners ought to take preference and precedence over the contractual claims of the debenture holders”.
DHFL’s resolution professional, however, said the non-bank lender wasn’t taking any new deposits.
The dispute stems from the Bombay High Court and the Debt Recovery Tribunal’s interim orders to hold repayment to the fixed depositors. Earlier this month, the committee of creditors to DHFL agreed to restart lending at a rate of Rs 500 crore a month. That was expected to restore some of the value in the home financier’s books as it had stopped lending for months due to the liquidity crunch.
After this, more than 250 fixed deposit holders moved the apex court saying that the lending could begin only after the company repays them for their deposits that have matured or are nearing maturity.
The petitioners said they were aggrieved by the orders as it affected a number of them who were members of the general public and have put their life savings in these deposits. The deposit holders include senior citizens, widows, single-earning members and persons in dire need of money, they said.