Piramal Group Mulls To Challenge NCLAT Order On DHFL In SC
Mumbai: The Piramal Group said on Friday that it is considering moving the Supreme Court to appeal against an NCLAT order which has asked DHFL lenders to reconsider Piramal ascribing a value of Re 1 to Rs 45,000 crore of bad loans.
“We have analysed the detailed judgment of the NCLAT and consulted our legal advisors. We are confident and will continue to pursue the matter as multiple legal options are available to us for our future course of action, including approaching the apex court,” Piramal Group said in a statement.
Piramal said in the case of one of the appeals, which was limited to the extent of challenging the distribution of proceeds (if any) from fraudulent transactions to its benefit, the NCLAT has ordered it to be re-considered by the Committee of Creditors (CoC).
On Thursday, while delivering a judgement on 63 moons Technologies’ petition, the NCLAT had directed the lenders of DHFL to reconsider their decision regarding the valuation of the financial firm’s avoidable transactions, while approving the insolvency resolution plan submitted by Piramal Capital & Housing Finance Ltd (PCHFL).
Notably, 63 moons stated that with this order, the CoC has to reconsider the provision of Section 66 of Insolvency and Bankruptcy Code (IBC), which mandates that the benefit should go to all the creditors of DHFL. However, in its resolution plan, the CoC had overlooked this provision to the benefit of the Piramal Group.
63 moons, which holds non-convertible debentures (NCDs) worth over Rs 200 crore issued by DHFL, had challenged the NCLAT’s judgment on the grounds that the current resolution plan was “disappointing” for NCD holders.
In September last year, the Supreme Court had directed the NCLAT to complete the hearing of the appeal filed by 63 moons against the Piramal Group’s resolution plan for mortgage financier Dewan Housing Finance Corporation Ltd (DHFL) within two months.
63 moons, the only company that challenged the decision of the CoC in NCLAT, stated that if the CoC considers this without alteration of provision of Section 66 of IBC, all creditors of DHFL will be benefited.
It may be pointed out that in its resolution plan, Piramal had ascribed Re 1 value against Rs 40,000 crore assets that have been fraudulently diverted by the erstwhile promoters of DHFL.
Under IBC, avoidance transactions are those which are identified as undervalued, fraudulent, or extortionate by the former promoters.
The resolution plan, which was voted in favour by the CoC, was approved by the Mumbai bench of the National Company Law Tribunal (NCLT) on June 7, 2021. As per the plan, a notional value of Re 1 was given for all recoveries under Section 66 of the IBC.
In September last year, PCHFL acquired DHFL for a total consideration of Rs 34,250 crore.