Bombay High Court discharges DHFL in DHFL-Yes Bank case

The Bombay High Court has discharged Dewan Housing Finance Corporation Limited (DHFL) in the case involving its promoters Kapil and Dheeraj Wadhawan, and Yes Bank founder Rana Kapoor.

The order was passed in a writ petition filed by DHFL seeking discharge, or in the alternative, dropping of proceedings against it. Advocates Hiten Venegaokar, Ninad More and Siddhant Rai appeared for the CBI and strongly opposed this request. They said that the order of the National Company Law Tribunal (NCLT) approving the Corporate Insolvency Resolution Process (CIRP) was under challenge before the National Company Law Appellate Tribunal (NCLAT).

Senior Advocate Ravi Kadam with Advocates Karan Kadam, Vivek Shetty, Amey Mirajkar, Nishant Upadhyay and Ayush Chaddha appearing for DHFL stated that it had already undergone CIRP under the Insolvency and Bankruptcy Code (IBC) before the NCLT-Mumbai. Senior Advocate Aabad Ponda with Advocate Chitra Rentala, briefed by Trilegal, appeared for Piramal Capital and Housing Finance, which had emerged as the successful Resolution Applicant through CIRP, also moved the High Court.

Advocates Pranav Badheka, Rohan Dakshini, Pooja Kothari and Urvi Gupte, instructed by Rashmikant & Partners, appeared for Kapil Wadhawan who had filed an intervention. Wadhwan was opposing the plea filed by DHFL and seeking discharge in the CBI case himself. Wadhawan had argued that since the “correctness” of NCLT order was challenged before the NCLAT, till the time the appeals are not disposed of, the NCLT order had not attained finality.

Justice S K Shinde, while dictating the order, observed that the facts of the case as brought out by DHFL, in particular subsequent events, have indisputably established change in its management, which has hardly been disputed by Wadhawan. It was noted that the subsequent events like appointing additional directors on the DHFL board had already taken place and those were placed on record before the CBI Court.

These subsequent events caused a change in management and control of the corporate debtor, Justice Shinde observed. The court concluded that the immunities sought by DHFL, though conditional, could be granted. DHFL also pointed out that the conditions had been fulfilled and satisfied.

According to the CBI, Yes Bank had invested Rs 3700 crore in short-term debentures of DHFL for which DHFL had given kickbacks worth Rs 600 crore to Rana Kapoor and family.