[DHFL-Yes Bank scam] Bombay High Court discharges DHFL from CBI case

The Bombay High Court on Tuesday discharged Dewan Housing Finance Corporation Limited (DHFL) in the cheating and corruption 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 assailing an order of the Special Court dealing with Central Bureau of Investigation (CBI) cases which had rejected its plea seeking discharge in the matter after having undergone the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC) before the National Company Law Tribunal (NCLT) Mumbai..DHFL filed a miscellaneous application under under Section 32A of IBC seeking discharge, or in the alternative, dropping of proceedings against it. While partly allowing the application, the Special Court rejected DHFL's prayer for discharge and instead the Interim Monitoring Committee, which was not even an accused in the case, was discharged..Aggrieved by the order, DHFL approached the High Court. Piramal Capital and Housing Finance, which emerged as the successful Resolution Applicant through the CIRP, also moved the High Court aggrieved by the order..An intervention was also sought in the plea by Kapil Wadhawan 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 National Company Law Appellate Tribunal (NCLAT), till the time the appeals are not disposed of, the order of NCLT had not attained finality..The question which was answered by Justice SK Shinde was whether Section 32(1)(a) of the Insolvency and Bankruptcy Code (IBC) lays down directions that a corporate debtor is absolved of all criminal offences committed prior to commencement of CIRP even if there is an appeal pending before NCLAT?.Justice Shinde observed that the facts of the present 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.In view of these subsequent changes, Wadhawan argued that these subsequent events ought to have been first considered by the Special Court. However, this argument was rejected by Justice Shinde..These subsequent events caused change in management and control of the corporate debtor, Justice Shinde observed. The Court came to the conclusion that the immunities sought by DHFL, though conditional, could be granted. DHFL also pointed out that the conditions had been fulfilled and satisfied.For this reason, the Court held that DHFL stood discharged in the case..Senior Advocate Ravi Kadam with Advocates Karan Kadam, Vivek Shetty, Amey Mirajkar, Nishant Upadhyay and Ayush Chaddha, instructed by AZB & Partners, appeared for DHFL.Senior Advocate Aabad Ponda with Advocate Chitra Rentala, briefed by Trilegal, appeared for Piramal. Advocates Pranav Badheka, Rohan Dakshini, Pooja Kothari and Urvi Gupte, instructed by Rashmikant & Partners, appeared for Wadhawan. Advocates Hiten Venegaokar, Ninad More and Siddhant Rai appeared for CBI. .[Read order]