Tag: Wadhawan

SC refuses to entertain bail plea of Rakesh Wadhawan, asks him to approach HC, BFSI News, ET BFSI

Banking & Finance

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New Delhi, The Supreme Court Friday refused to entertain the bail plea filed on health grounds by jailed businessman Rakesh Wadhawan, accused of money laundering in the multi-crore rupees Punjab and Maharashtra Co-operative (PMC) Bank fraud case, saying that he has been in hospital more than the jail. A bench comprising Chief Justice N V Ramana and Justices Surya Kant and Hima Kohli permitted senior advocate Mukul Rohatgi, appearing for Wadhawan, to withdraw the bail plea to approach the high court.

Rohatgi referred to the medical condition of the accused and said that he has been in jail for quite some time.

“I see, he has been in hospital more than in jail. Go to the high court,” the bench said prompting Rohatgi to say that it was the high court which refused the bail.

“File after some time. Not now. Alright permitted to withdraw to approach the high court,” the bench said.

The Bombay High Court on October 14 had refused to grant bail to Wadhawan.

Wadhawan, founder of Housing Development Infrastructure Limited (HDIL), was arrested by the Enforcement Directorate in 2019 in the case.

The high court had said that Wadhawan’s submission that he was immediately required to be released on temporary bail on medical grounds, was “not justified”.

It had said that denial of medical bail was in no way a breach of Wadhawan’s fundamental right to life since he had been provided adequate medical treatment by the state prison authorities whenever required.

Wadhawan, who had undergone a surgery for pacemaker implantation, had sought that he be released on bail so that he can seek discharge from the civic-run KEM Hospital in the city, where he is recuperating while in judicial custody, and shift to a private hospital while out on bail.

He had said in his plea that he suffered from severe comorbidities, that his immune system had been compromised after having contracted COVID-19 recently, and that he was susceptible to contracting infections and ailments while at the civic hospital due to the heavy footfall the hospital received.

He had also said that the KEM Hospital did not have an ICU facility specifically meant for those suffering from cardiac issues.

The fraud at PMC Bank came to light in September 2019 after the Reserve Bank of India discovered that the bank had allegedly created fictitious accounts to hide over Rs 4,355 crore of loans extended to almost-bankrupt Housing Development and Infrastructure Limited (HDIL).

According to RBI, the PMC bank masked 44 problematic loan accounts, including those of HDIL, by tampering with its core banking system, and the accounts were accessible only to limited staff members.

Mumbai Police’s Economic Offences Wing and the ED had registered offences against senior bank officials and HDIL promoters.



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HC rejects Rakesh Wadhawan’s medical bail plea, BFSI News, ET BFSI

Banking & Finance

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The Bombay High Court on Thursday refused to grant bail on health grounds to jailed businessman Rakesh Wadhawan, accused of money laundering in the multi-crore Punjab and Maharashtra Co-operative (PMC) Bank fraud case. Wadhawan, founder of Housing Development Infrastructure Limited (HDIL), was arrested by the Enforcement Directorate in 2019 in the case.

A single bench presided over by Justice Nitin Sambre said that Wadhawan’s submission that he was immediately required to be released on temporary bail on medical ground, was “not justified”.

It said that denial of medical bail was in no way a breach of Wadhawan’s fundamental right to life since he had been provided adequate medical treatment by the state prison authorities whenever required.

Wadhawan, who recently underwent a surgery for pacemaker implantation, had sought that he be released on bail so that he can seek discharge from the civic-run KEM Hospital in the city, where he is recuperating currently while in judicial custody, and shift to a private hospital while out on bail.

Wadhawan had said in his plea that he suffered from severe co-morbidities, that his immune system had been compromised after having contracted COVID-19 recently, and that he was susceptible to contracting infections and ailments while at the civic hospital due to the heavy footfall the hospital received.

He further said that the KEM Hospital did not have an ICU facility specifically meant for those suffering from cardiac issues.

State’s counsel Prajakta Shinde, however, objected to Wadhawan’s bail plea.

She pointed out that he had been provided timely and specialised medical treatment at state-run and civic hospitals by the state prison authorities from time to time since his arrest.

Shinde said the KEM Hospital authorities had themselves recommended that Wadhawan be shifted to another hospital for the pacemaker implantation surgery since the hospital didn’t have such facility. However, now that the surgery was over, Wadhawan could continue his medical treatment at KEM.

Shinde also submitted documents to show that KEM hospital was currently undergoing renovations and arrangements were being made to set up a cardiac ICU within a few weeks.

The court took note of the state’s submissions and agreed that Wadhawan had indeed been provided the “best possible” medical treatment by the state prison authorities whenever required.

“In the backdrop of aforesaid (treatment having been provided by state authorities), it cannot be inferred that right of the applicant guaranteed under Article 21 of the Constitution for having proper medical treatment in super-speciality hospital is violated,” the high court said.

“Rather, various medical treatments which are given to the applicant are proved to be life-saving at this stage. The claim put forth by the applicant that he is immediately required to be released on temporary bail on medical ground is not justified. It lacks merit and stands rejected,” it added.

The court, however, granted Wadhawan the liberty to approach the court in case of any emergency.



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Banks explore the option of invoking personal guarantee of promoters, BFSI News, ET BFSI

Banking & Finance

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New Delhi: Armed with Supreme Court order, banks may invoke personal guarantees of tycoons ranging from Venugopal Dhoot to Kapil Wadhawan to recover unpaid loans from their delinquent firms, sources said Monday.

According to an estimate, the top 10 personal guarantors have guaranteed debt of over Rs 1.6 lakh crore. Among the big names, former promoters of Bhushan Steel and Power Sanjay Singhal and his wife Aarti Singhal had furnished personal guarantees worth up to Rs 24,550 crore to take loans from a consortium of bank-led by State Bank of India (SBI).

The former promoter of Reliance Communications, Anil Ambani, has also given a personal guarantee against the loan taken. Erstwhile promoter Wadhawan stands guarantee to loans taken by DHFL, which is sitting on a debt of about Rs 90,000 crore, while Dhoot has also given a personal guarantee to a portion of Rs 22,000 crore loan to Videocon.

The Supreme Court in May had held that the November 15, 2019 government notification allowing creditors, usually financial institutions and banks, to move against personal guarantors under the Insolvency and Bankruptcy Code (IBC) was ‘legal and valid’.

Post the judgement, a senior official of a public sector bank said banks are assessing the level of involvement of those directors who pledged their personal guarantee against the loan.

After the assessment, another banker said, banks would move National Company Law Tribunal (NCLT) for invoking personal guarantee as part of the recovery process.

The official said that banks have started receiving calls from some of the promoters for exclusion of their personal guarantee from the non-performing assets. Some of them are coming forward to resolve bad loans to save their personal wealth.

Most of the promoters thought that once their case is admitted under IBC, their past sins and obligations cease, the official said.

However, the order has generated fear among the promoters and directors who pledged their personal guarantee of losing their personal wealth as part of the resolution process, the official said, adding, the personal guarantee angle would expedite the resolution process as the guarantor stands at risk of losing personal property.

The creditor-debtor relationship has got a leg up and this will minimise chances of default in the future.

The concept of ‘guarantee’ is derived from Section 126 of the Indian Contracts Act, 1872. A contract of guarantee is made among the debtor, creditor and guarantor. If the debtor fails to repay the debt to the creditor, the burden falls on the guarantor to pay the amount.

The creditor reserves the right to begin insolvency proceedings against the personal guarantor if the latter does not pay. Usually, promoters of big businesses submit personal guarantees to creditors to secure loans and assure repayment.

During the hearings, the government had justified the November 2019 notification extending bankruptcy proceedings to personal guarantors. Attorney General KK Venugopal argued that by roping in guarantors, there was a greater likelihood that they would “arrange” for the payment of the debt to the creditor bank in order to obtain a quick discharge.



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Wadhawan plans to challenge NCLT nod to Piramal’s resolution plan for DHFL

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Kapil Wadhawan, former promoter of Dewan Housing Finance Corporation Ltd (DHFL), plans to challenge the approval by the National Company Law Tribunal to the resolution plan of Piramal Capital and Housing Finance Ltd.

Wadhawan’s counsel JP Sen informed the National Company Law Appellate Tribunal (NCLAT) about this on Friday.

Sen informed the tribunal that an appeal against the NCLT’s order on June 7 approving Piramal’s resolution plan will be filed in a day or two.

“Wadhawan is likely to file a petition challenging the NCLT order by Monday,” said a person familiar with the development.

Petitions filed by DHFL’s Committee of Creditors (CoC), Administrator and PCHFL came up for hearing before the NCLAT on Friday.

The NCLAT had on May 25 stayed an order by the NCLT, which had directed the lenders to consider the offer made by Wadhawan within a period of 10 days. The stay, which was an interim order, was based on a plea by the Committee of Creditors of DHFL challenging the NCLT order.

Appearing for DHFL administrator, the senior counsel said that since Piramal’s resolution plan has already been approved, the direction by the NCLT to the CoC can not survive.

Delay likely

The NCLAT has adjourned the matter for further hearing to August 2. But with Wadhawan planning to file a petition, the full resolution of DHFL could turn to be further delayed.

Wadhawan has also filed a plea in the Supreme Court challenging the NCLAT stay order.

Small depositors of DHFL, including fixed deposit holders and NCD holder 63 Moons Technologies, are also filing separate appeals for full repayment of their claims.

DHFL’s CoC had earlier this week rejected a plan for higher redistribution of funds to small deposit holders.

The NCLT had on June 7 approved the Piramal Group’s ₹37,250 crore resolution plan for DHFL. This includes an upfront cash component of ₹12,500 crore and a deferred component of ₹19,550 crore.

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