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Informist, Tuesday, Apr. 1, 2025

 

NEW DELHI – The Supreme Court on Tuesday upheld Piramal Capital and Housing Finance Ltd.'s resolution plan for debt-ridden Dewan Housing Finance Corp. Ltd. The top court set aside a National Company Law Appellate Tribunal 2022 order which asked the committee of creditors to reconsider the aspect in Piramal Capital's resolution plan, which allowed for appropriate recoveries, if any, from avoidance applications filed under Section 66 of the Insolvency and Bankruptcy Code, 2016.

 

The controversy stemmed from Dewan Housing's resolution plan, which had ascribed a value of INR 1 to assets worth INR 450 billion diverted fraudulently by Kapil Wadhawan and Dheeraj Wadhawan, the erstwhile promoters of Dewan Housing. Piramal Capital had approached the apex court against the appellate tribunal's order to direct Dewan Housing Finance's lenders to reconsider their decision on the valuation of the company's fraud account.

 

"However, it is clarified and directed that the NCLT shall decide the avoidance applications filed by the administrator under Section 43, 45, and 50 (of 2016 Code), and shall separately decide the applications under Section 66, and it shall pass the orders in accordance with the powers conferred upon it under Sections 44, 48, 49, 50, and under Section 66, as the case may be," said the top court. The recoveries or benefits that may follow from such applications shall be appropriated in favour of the committee of creditors in case of avoidance applications under Sections 43, 45 and 50, and in favour of Piramal Capital in case of applications under Section 66 of the 2016 Code.

 

While Sections 43, 45 and 50 refer to "avoidable transactions," specifically preferential, undervalued, and extortionate credit transactions, Section 66 refers to fraudulent trading or wrongful trading.

 

Dewan Housing was handed over to Piramal Capital according to a resolution plan approved by the National Company Law Tribunal. However, 63 Moons Technologies Ltd., a debenture holder of the debt-ridden Dewan Housing, had challenged it in the appellate tribunal. By valuing the Section 66 transactions at an unrealistic and arbitrary value of INR 1, the committee of creditors has attempted to appropriate massive recoveries that are likely to result from the avoidance applications filed by the administrator of Dewan Housing, said 63 Moons. 

 

Piramal Capital is a wholly-owned subsidiary of Piramal Enterprises Ltd., the flagship company of the group.

 

On Tuesday, shares of Piramal Enterprises ended 0.1% higher at INR 989.05 on the National Stock Exchange, while shares of 63 Moons Technologies ended 0.2% lower at INR 812.65.  End 

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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