Occupation Before Finality: How Piramal’s Takeover of DHFL Allegedly Subverted Due Process with BJP’s Institutional Enablement
Occupation Before Finality: How Piramal’s Takeover of DHFL Allegedly Subverted Due Process with BJP’s Institutional Enablement
Posted on 15th September, 2025 (GMT 03:10 hrs)
ABSTRACT
The DHFL insolvency reveals how India’s ill-conceived IBC framework enabled “occupation before finality,” letting Ajay Piramal allegedly seize control despite pending appeals—turning depositors into guinea pigs in a neoliberal lab. Cobrapost exposed DHFL’s links to Dawood Ibrahim and Iqbal Mirchi networks, funnelling BJP donations as terror-financing in the name of political donations, while Piramal’s own Electoral Bonds, PM CARES, and Flashnet ties deepened the crony nexus with the BJP. What emerged was not resolution but reportedly an oligarchic lawfare, where judicial pliancy, executive patronage, and opaque financing converged into a paradigm of selective justice and political capture.
DISCLAIMER:
This article is intended solely for informational, academic, and public interest purposes. It is based on publicly available facts, judicial records, and critical analysis of corporate governance, insolvency proceedings, and regulatory practices. The references to individuals, companies, or institutions are made in the context of public events and reports. Nothing in this article should be construed as a definitive or conclusive statement of guilt, liability, or unlawful conduct. The views expressed are interpretative, critical, and reflective in nature, and do not constitute legal, financial, or investment advice. Readers are encouraged to consult original court documents, regulatory filings, and verified news sources for primary information.
Where This Begins
In the labyrinth of India’s corporate insolvency landscape, the Dewan Housing Finance Corporation Ltd. (DHFL) case stands as a stark emblem of systemic injustice. Our present inquiry began with a probing question:
Can anyone occupy a company when the matter is under adjudication? Clue: Ajay Piramal’s occupation of DHFL.
This simple query unraveled into an intense reflection on legal principles, crony oligarchy, political financing, and the erosion of judicial independence under the present NDA regime in India. What emerged through those reflections was not merely a legal critique, but also the rhetorical shaping of public idioms of resistance. What follows is a narrative that moves from core legal analysis to critiques of oligarchy, from courtroom-style statements to bilingual aphorisms, from the exposure of the political nexus to the revelation that DHFL was simply a “test case” for justifying the Insolvency and Bankruptcy Code (IBC) to save the BJP’s face. Together, these threads form not a fragmented dossier but a continuous record of resistance, both intellectual and popular.
Occupation Before Finality
Under ordinary civil law, the doctrine of lis pendens in Section 52 of the Transfer of Property Act, 1882 prevents transfer or possession of disputed property until litigation concludes. The Insolvency and Bankruptcy Code (IBC), however, subverted this safeguard in its present form. In the DHFL case, the RBI-appointed Committee of Creditors approved Mr. Ajay Piramal’s resolution plan, and the NCLT ratified it on 7 June 2021 despite objections from fixed depositors and retail investors. Appeals were still pending before the NCLAT and the Supreme Court, yet Mr. Piramal assumed control of DHFL in September 2021. Was this not a paradox of law?
On 27 January 2022, the NCLAT found the resolution plan marred by irregularities and contrary to law. Mr. Piramal immediately sought a stay in the Supreme Court (11 April 2022), but the verdict did not disturb his prior occupation.
The sequence of events underscores the allegedly unequal treatment and extraordinary judicial speed afforded in this case, contrasting sharply with the experience of ordinary litigants:
— 19 May 2021: NCLT orders reconsideration of Wadhawan’s 100% repayment offer. Inference: A legally binding directive allegedly ignored.
— 25 May 2021: NCLAT stays the NCLT’s order within six days. Inference: Unprecedented speed in judicial relief despite India’s massive backlog.
— 7 June 2021: NCLT approves Mr. Piramal’s plan, bypassing the earlier order. Inference: Allegedly violated the IBC’s maximization principle, favoring corporate interests over fairness.
— 27 Jan 2022: NCLAT finds the DHFL resolution plan discriminatory, illegal, and full of material irregularities, particularly on the basis of 63 Moons’ arguments. Inference: CoC allegedly acted illegally, yet Piramal’s control remained unaffected.
— 11 April 2022: Supreme Court stays NCLAT order, granting yet another rapid relief to Mr. Piramal. Inference: Suggestive of privileged access to apex court attention, contrasting sharply with the experience of ordinary citizens.
Even beyond these key rulings (2022–2025), multiple depositors’ cases were delayed, dismissed, or redirected on technicalities. The pattern suggests that ordinary litigants face procedural bottlenecks and forum shopping, while corporate appeals in DHFL were processed with unusual speed and deference.
This sequence strengthens the point: the IBC privileges “speed” over justice, enabling possession before finality. The effect was not the rule of law but a form of crony capture, where oligarchic interests were secured while victims’ rights remained suspended.
Selective Obedience and the Dharma of Oligarchs
The DHFL case stripped bare the illusion of judicial neutrality. What emerged instead was a disturbing pattern of selective, partisan obedience. When the first NCLT order of 19 May 2021 went against the interests of Mr. Piramal and the Committee of Creditors, it was reportedly set aside in practice—an act of calculated defiance. Yet, when the second NCLT order of 7 June 2021—widely criticized as a “forced verdict” shaped by political and corporate pressures—tilted in their favour, compliance was swift and eager. This oscillation between defiance and obedience is not mere inconsistency; it is the very hallmark of oligarchic lawfare: verdicts that constrain are ignored, while verdicts that enable are instantly embraced.
The aphorism writes itself: Obey when it pays, disobey when it binds—यही है ओलिगार्की का धर्म. Orders are not respected as binding expressions of law, but are obeyed only when profitable. The Sanskrit maxim captures it with devastating clarity:
“अन्यायो बलवतः नियमः, न्यायो दुर्बलजनस्य दण्डः।
आज्ञा पालनं केवलं स्वलाभे—एष ओलिगार्खानां धर्मः॥”
“For the powerful, injustice is the law; for the weak, justice is the whip. Orders are obeyed only when profitable—such is the dharma of the oligarchs.”
Victims as Guinea Pigs: The Laboratory Logic of the IBC
The DHFL case was publicly described as a “test case” for the IBC, since it was the first large financial services company to undergo insolvency resolution under the code. That description alone is revealing. For in practice, what it meant was that depositors, small bondholders, and retail investors were reduced to the status of experimental subjects. Their claims were subordinated to those of institutional creditors, their rights drastically written down, extinguished, their voices sidelined.
Multiple irregularities, illegalities and instances of wilful disregard in the resolution process headed by the CoC were flagged—first by the NCLT (19.05.2021), then by the NCLAT (27.01.2022). But Mr. Piramal, wielding the might of the apex court’s stay order (11.04.2022), conveniently brushed aside these concerns… do not these constitute possible/potential contempt of court? This also underscores that the worries about injustice were not hypothetical but were raised in formal adjudicatory proceedings.
The use of “test case” language exposes the laboratory logic of neoliberal law: citizens’ savings are not safeguarded but sacrificed to “prove” the efficacy of a system. One is compelled to ask—have they treated DHFL victims as guinea pigs in a state laboratory?
The rhetorical answer resounds: yes. Victims were not protected; they were experimented upon. The experiment was not in medicine but in corporate capture. The so-called DHFL “resolution” was never about justice; it was about creating a model where oligarchs may occupy first, and people’s rights may be erased later.
Interestingly enough, Section 66 of the Insolvency and Bankruptcy Code (IBC) addresses fraudulent or wrongful trading by directors or partners of a corporate debtor. It empowers the Adjudicating Authority to order individuals who have knowingly engaged in such conduct to contribute to the debtor’s assets. This provision aims to deter misconduct and protect creditors from fraudulent activities.
In the case of Dewan Housing Finance Corporation Ltd. (DHFL), the Committee of Creditors (CoC) approved a resolution plan that allocated potential recoveries from Section 66 actions to the resolution applicant, Piramal Capital. This decision was based on the CoC’s commercial judgment, which deemed such recoveries speculative and uncertain. The plan was approved by a significant majority, including the class of debenture holders represented by an authorized representative.
However, this allocation sparked disputes with creditors like 63 Moons Technologies, who argued that recoveries under Section 66 should benefit all creditors, not just the resolution applicant. They contended that the CoC’s decision circumvented the statutory purpose of Section 66, which is to restore value to the insolvency estate for the benefit of creditors.
The National Company Law Appellate Tribunal (NCLAT) initially found merit in these objections and directed the CoC to reconsider the allocation of Section 66 recoveries. However, the Supreme Court of India overturned the NCLAT’s decision, emphasizing the primacy of the CoC’s commercial wisdom in approving resolution plans. The Court held that the CoC’s decision was within its discretion and that judicial intervention was limited to ensuring compliance with legal provisions, not evaluating commercial decisions.
This case underscores the tension between the IBC’s objectives of creditor protection and the autonomy of the CoC (along with possible political backing by the BJP) in making commercial decisions. It highlights the challenges in balancing statutory mandates with the practical realities of insolvency resolution processes.
Setting a Precedent: Fact is Fact
Much anxiety was voiced by Mr. Piramal and the CoC when NCLT, in its 19th May, 2021 verdict, wanted the CoC to reconsider the full repayment proposals of the ex-promoters of the DHFL. Certain DHFL lenders belonging to the CoC warned that such a ruling would “set a bad precedent.” But here lies the deeper irony. Precedent in law is supposed to guarantee consistency: future cases draw guidance from past judgments. Yet what the CoC and Mr. Piramal possibly feared was that recognition of this verdict would threaten the very model of acquisition that served oligarchic interests.
In response, one must insist: whatever may be called a “good” or “bad” precedent, fact is always fact. Courts may suppress, bend, or reinterpret, but facts carry a weight that cannot be erased. And the fat fact of DHFL is simple: victims lost, Piramal gained, the state enabled. Precedents may shift, judgments may tilt, but history records the fatness of injustice.
DHFL, once a financial entity, was merged, absorbed, and ultimately dissolved into absence—first into PCHFL, then into Piramal Enterprises. For what? To absolve Mr. Piramal of all responsibility and agency? This claims that part of the corporate re-structuring was perhaps aimed at shielding responsibility, which adds weight to the critique of evasion and capture.
Crony Capture: The Political Nexus
The occupation of DHFL cannot be disentangled from the political economy of crony financing in present-day India. The Piramal Group donated significantly through the now-unconstitutional Electoral Bonds scheme and also contributed to the opaque PM CARES Fund. These financial flows established a structure of indebtedness between corporate oligarchs and the ruling regime. Furthermore, it is essential to highlight Mr. Piramal’s direct involvement with the BJP in the Flashnet Scam, integrating allegations that reach beyond just DHFL—suggesting a broader pattern of corporate-state misconduct. Moreover, as Cobrapost reported in 2019 itself, the BJP’s association with the DHFL scam dates back to its inception, when illicit channels linked to Dawood Ibrahim and Iqbal Mirchi were allegedly used to funnel funds into the party’s coffers in terms of terror-financing networks in the name of “political donations” or “political charity”. Taken together, these elements reveal not an isolated corporate bailout, but a broader infrastructure of political capture and financial misconduct.
The institutions followed suit. The CoC and muted regulators consistently favoured Mr. Piramal’s plan, while small depositors were marginalized. The judicial–executive wall, once imagined as a safeguard of separation of powers, has been dismantled through post-retirement appointments, executive interference, and pro-regime verdicts. While DHFL has been treated by many critics as a test case of IBC’s bias toward quick corporate resolution, the broader pattern — evidenced by public disputes over electoral bonds, litigation on PM-CARES and controversies such as the Adani–Hindenburg episode — is one of contested institutional responses: observers argue that regulatory and judicial behaviour sometimes appears to align with powerful state–corporate interests.
Thus, DHFL’s occupation was facilitated not merely by a loophole in the IBC but by the full machinery of opaque financing, executive patronage, and judicial pliancy.
Piramal’s Adverse Possession or Fait Accompli?
Could Piramal’s occupation of DHFL be called adverse possession?
Legally speaking, Piramal’s occupation of DHFL cannot be called “adverse possession,” since that doctrine applies only to immovable property and requires long hostile use. But metaphorically, the takeover mimics its logic. He was enabled to take possession before judicial finality, and by the time appeals were pending, the fact of occupation itself tilted the scales. It was not adverse possession in law, but it was adverse possession in effect—an occupation whose legality rested not on final adjudication but on fait accompli.
The People’s Indictment
From the perspective of ordinary investors and fixed deposit holders, the DHFL affair is nothing less than a people’s charge sheet against crony capitalism. It indicts money power, selective obedience, premature occupation, and the erosion of judicial independence. And it voices its verdict in the idiom of the street: “Occupation before finality is not justice, it is crony capture.” “Law for जनता, loopholes for धनिक.” “IBC = Injustice Before Completion — अधूरा न्याय, पूरा कब्ज़ा.”
The International Covenant on Civil and Political Rights (ICCPR), to which India is a party, guarantees protections directly relevant to cases of financial abuse and corporate–state intimidation. Article 2(3) obligates states to provide effective remedies for rights violations, including by private actors; Article 7 prohibits cruel, inhuman, or degrading treatment, which extends to psychological harassment; Article 14 ensures equality before the law and fair hearing, violated when victims face compressed timelines while corporations enjoy procedural privilege; Article 17 protects individuals against unlawful attacks on honour and reputation, applicable to coercive defamation tactics; and Article 19 enshrines freedom of expression, shielding citizens’ right to expose corruption and corporate misconduct. In the DHFL case, the denial of equal remedy, coercive legal intimidation, and silencing of financially abused depositors illustrate a breach of these ICCPR obligations, showing how international human rights protections collapse when corporate power overrides citizens’ rights.
Conclusion: Resistance and Memory
The DHFL scandal is more than a corporate insolvency. It is a case study in how crony capitalism operates through law, and how judicial institutions, under pressure, surrender their independence. From selective obedience to opaque financing, from Sanskrit aphorisms to bilingual slogans, the narrative reveals how the IBC has been weaponized to legalize premature occupation.
The final reminder echoes across histories: “For the powerful, injustice is the law; for the weak, justice is the whip.”
Against this reality, the task remains urgent: to circulate the facts, to preserve the memory, to contest the oligarchic order. Victims of DHFL were turned into guinea pigs in a state laboratory; their loss must not be normalized as the cost of reform. The fatness of fact resists erasure. It is time to reclaim justice, resist crony capture, and stand with those whose voices were silenced.
Stand with DHFL victims. Fight crony capture. Reclaim justice.
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