DHFL Crisis: Promoters Kapil and Dheeraj Wadhawan cannot travel abroad until further orders, Bombay HC

Omkar Gokhale November 8 2019
DHFL v 63 Moons Bombay High Court

The Bombay High Court on Thursday directed Kapil and Dheeraj Wadhawan, promoters of Dewan Housing Finance Corporation Limited (DHFL) not to leave India until further orders.

A Single Bench of Justice S J Kathawalla passed this order while hearing a plea by 63 Moons Technologies Limited for non-payment of dues by DHFL of around Rs. 200 Crores.

During pre-lunch hearing on Thursday, DHFL had claimed that defendants may need to travel abroad for raising funds, to which Justice Kathawalla said that the promoters ‘cannot leave the country’ and if at all they wish to, then they will have to take permission from the Court.

However, DHFL counsel in the post-lunch session clarified and submitted that defendants will not travel abroad until November 15 without Court’s permission. Justice Kathawalla recorded their submission.

Jignesh Shah-promoted 63 Moons Technologies, which had subscribed to the non-convertible debentures of DHFL, had moved Bombay High Court against DHFL for recovery of dues on Monday. In its plea, 63 Moons submitted that the Lookout Circulars issued against the Wadhawans may lapse at any time and therefore, they should be restrained in that regard.

On Monday, the counsel for DHFL had informed the Court that Dheeraj Wadhawan is admitted to Lilavati Hospital since he is suffering from a lung infection and Kapil Wadhawan is in India and he is trying to sort out the problems.

The DHFL went on to argue that there was no need for such an application by 63 Moons before the High Court. The Debenture Trustee had already moved a plea in the Debt Recovery Tribunal (DRT), Pune for recovery of dues belonging to debenture holders, submitted DHFL counsel. It was informed by the DHFL that the DRT has reserved its order in the dispute.

63 Moons was prompted to move the High Court after DHFL announced to the Stock Exchanges that it had stopped payment to creditors, including fixed deposit holders, following the directions of the Bombay High Court.

In a setback to DHFL, a Single Bench of Justice A K Menon on October 10 had directed disclosure of all assets and liabilities by DHFL, in suits filed by Reliance Nippon and Edelweiss. The Court had also ordered temporary restraint on DHFL from making further payments to secured and unsecured creditors, except certain payments made on a pro-rata basis to all the secured creditors.

On October 17, the Court passed identical orders against DHFL, in suits filed by Kotak Mahindra Asset Management and Axis Asset Management.

In this regard, Justice Menon had directed DHFL to file a response within four weeks.

A Bench of Justice Kathawalla has posted hearing on the dispute between 63 Moons and DHFL on November 14.

Senior Counsel DD Madon and advocates Chetan Kapadia, Manik Joshi, Mantul Bajpai instructed by Crawford Bayley & Co. appeared for plaintiff 63 Moons.

Moreover, DHFL was represented by advocates Cyrus Ardeshir, Munaf Virjee, Rushabh Parekh, Akash Agarwal and Rakesh T. instructed by ABH Law LLP Advocates. Senior Counsel Gaurav Joshi and advocates Nausher Kohli, Prashant Goyal appeared for defendants Dheeraj and Kapil Wadhawan.

[Read Order]

63 Moons v DHFL ( Bombay HC- Nov 7)