Ajay Piramal: The Owner of The Erstwhile DHFL: Really So?

Ajay Piramal: The Owner of The Erstwhile DHFL: Really So?

Posted on 26/11/2023 (GMT 18:55 hrs)

Updated on 27/11/2023 (GMT 18:20 hrs)

I. Mr. Ajay Piramal: the Supposed “Owner” of the DHFL (?!)

Apparently, Ajay Piramal is the owner of the DHFL after his proposed resolution plan (RP) was reported to have shown a “green flag” with the:

i. Agreement of the RBI-appointed CoC for DHFL in the 18th CoC Meeting⤡ (after “winning” the simulated bidding war and getting a so-called “overwhelming majority” on January 15, 2021);

For more on this issue, view:

ii. the approval order of the Hon’ble RBI⤡;

iii. the second order of NCLT (07/06/2021)⤡;

and

iv. the CCI’s apparent “approval” ⤡ (since the same contained a hypothetical remark that stated in point no. 15:

“This order shall stand revoked if, at any time, the information provided by the Acquirer is found to be incorrect.”

This leaves the room for contingencies in the so-called “acquiring” of the DHFL by Piramal).

However,

Piramal, DHFL merger: The road ahead remains bumpy due to legal hurdles VIEW HERE ⤡ (As reported on 15th June, 2021 ©Business Standard)

as there are many legal cases that are still under adjudication or “pending” in the court of law in relation to the DHFL scam.

It can be understood with the help of an analogy:

Mr. X got “approvals” from some quasi-judicial bodies to get/acquire the property and assets of Mr. Y.

However, some people challenged those quasi-judicial bodies’ “approval” verdicts and appealed to the apex court.

In this moment, can anyone trespass or acquire the property and assets of Mr. Y?

The simple, commonsense answer is NO.

It is not legally possible,

but still, Mr. X has acquired (with hostility and coercion) Mr. Y’s property by ignoring many pertinent questions raised by the quasi-judicial bodies’ themselves in other orders apart from the “approval” ones.

This possibly leads to an alleged contempt of court as well as squatter’s rights and it violates the Tort Law.

For details on pending cases, VIEW HERE ⤡.

II. Some Questions Regarding The “Acquisition” Status of the DHFL by Mr. Ajay Piramal

A few questions arise with regard to the present status of Mr. Piramal’s claim of ownership of the DHFL:

i. Why Mr. Piramal could not recover money by selling DHFL’s assets?

NCLT dismisses insolvency plea against Township Developers VIEW HERE ⤡ (As reported on 15th November, 2023 ©ET Realty)

NCLT dismissed the plea made by Mr. Piramal on behalf of original lender DHFL to acquire Township Developers’ property. NCLT pointed out technical difficulties in the timing (this very word can be interpreted as it is still under adjudication) of the application made by Mr. Piramal.

As it is remarked in the above-cited report:

After ascribing the value of just 1 rupee for the 45000 Cr DHFL assets’ recoveries, Mr. Piramal himself is moving to the NCLT for recoveries from the personal guarantors of the DHFL!

ii. Why did Piramal take a Stay Order (11/04/2022) from the Hon’ble SCI after the NCLAT Second Order (27/01/2022)?

The answer is fairly simple: Piramal is more equal than others⤡.

Although, The Hon’ble Supreme Court of India had earlier pointed out:

Bankruptcy will not void personal guarantees: Hon’ble Supreme Court VIEW HERE ⤡ (As reported on May 22, 2021 ©The Times of India)

In other words, the old promoters’ rights in the occasion of a “bankruptcy” or “insolvency” shall not be extinguished but are to be upheld as a continuation.

The SCI is still maintaining such a stance with regard to the old promoters’ rights, in so far as there are still no “escape routes” for the “new owner” of a company without reconsidering the old promoter’s appeals in response to the initiation of the corporate insolvency resolution process (CIRP).

Anil Ambani, Dhoot, Biyani may face heat after SC ruling on personal guarantors VIEW HERE ⤡ (As reported on 16th November, 2023 ©ET BFSI)

SC denial of IBC relief to personal guarantors opens new recovery window for lenders VIEW HERE ⤡ (As reported on 13th November, 2023 ©Economic Times)

Supreme Court Upholds Constitutionality Of IBC Provisions Relating To Personal Guarantors; Says Adjudicatory Role Can’t Be Read Into Sec 97 VIEW HERE ⤡ (As reported on 9th November, 2023 ©LiveLaw)

iii. Old promoters were ready to pay and they voiced their pleas multiple times. Why were they ignored by the RBI-appointed CoC for DHFL?

It was seen during the CIRP of the DHFL that the Wadhawan brothers, the so-called “former” promoters of the DHFL, were ready to pay the full amount to the creditors without there being the need for a third party intervention on Mr. Piramal’s part. This was reinforced further by the NCLT first order (19/05/2021)⤡, which stated that old promoters’ settlement proposal has to be reconsidered by the CoC. However, none of the calls were heard: neither of the Wadhawans, nor of the said quasi-judicial authority.

a) Mousetrapped: An Open Letter to the Wadhawan Brothers VIEW HERE ⤡ 

b) THE GREAT NON-WILFUL ABSENTEES IN THE RBI-APPOINTED CoC FOR DHFL VIEW HERE ⤡ 

It is to be carefully noted that the petitioners/old promoters/guarantors (as mentioned in the Question ii) went to the apex court for escaping their burden of responsibilities to the creditors, whereas, in the case of the DHFL, the old promoters/guarantors are ready to pay in full to their investors and creditors.

iv. Why can’t the DHFL Victims go to the international court of Human Rights for seeking justice?

After exhausting all the domestic legal options (quasi-judicial bodies, NHRC, Supreme Court), one may approach the Office of the High Commissioner for Human Rights (OHCHR) under the United Nations for the settlement of due justice on the grounds of “business-related rights” that are violated in the case of a financial abuse such as the DHFL “takeover” with huge haircuts.

On the basis of the enunciation presented in (ii) to (iv), it may be concluded that Mr. Piramal’s de facto occupation of the DHFL is to be doubted and reconsidered by the concerned, responsible and authorities.