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Apr 12, 20239 min read

THE GREAT NON-WILFUL ABSENTEES IN THE RBI-APPOINTED CoC FOR DHFL

Posted on 12/04/2023 (GMT 15:45 hrs)

Updated on 04/07/2023 (GMT 08:15 hrs)

In continuation with our following previous articles

we are continuing our campaign against the very constitution and conducts of the RBI-APPOINTED Coc FOR DHFL. In this article, we are going to deal with the two great non-wilful absentees in the CoC: Mr. Kapil and Dheeraj Wadhawan, erstwhile promoters of Dewan Housing Finance Corporation Limited (DHFL).

The problematic question in this context is:

Can CoC administrator perform the proceedings without the “former” (?) owner(s) of the company?

In the case of RTI, we cannot put “why”-question (as in institutionalized, organized, funded sciences; cf. Sir Medawar, Sir Peter. 1986 as cited in “Creating Procrustean Bed: Writing Scientific Papers”. VIEW HERE ⤡)! This type of prohibition has led us to paraphrase the above problem question with “Can”. Peculiarly enough, in some cultural groups, especially in India, children are discouraged by their indoctrinators to ask wh-questions!

It is also to be mentioned that neither PM CARES Fund nor the Electoral Bonds come under the purview of the RTI Act! They are transparently opaque, just like the whole CoC was maintaining a peculiar secrecy where even the Resolution Plan was not shared with all the creditors.

Though it is known fact that Bankruptcy will not void personal guarantees: Supreme Court VIEW HERE ⤡ (As reported on May 22, 2021 ©The Times of India), let us look at the rules and regulations of IBC (1916) for such deliberate avoidance of the Wadhawan brothers (“former” promoters of the DHFL) by the CoC to hand the DHFL over to Mr. Ajay Piramal, a hostile bidder and an alleged insider trader VIEW HERE ⤡.

The following screenshot from the official page of IBC tells us clearly that

“Suspended Director, who was representing the Corporate Debtor and has submitted the Settlement Proposal is entitled to participate in deliberation and negotiation undertaken by the CoC – Sanjeev Mahajan Vs. Indian Bank (Erstwhile Allahabad Bank) & Anr. – NCLAT New Delhi”

Despite such legal custom, the Wadhawan brothers were debarred from participating in the CoC meetings consecutively held over the course of two years.

In addition to that, Section 19 of the IBC clearly states that:

Personnel to extend cooperation to interim resolution professional.

19. (1) The personnel of the corporate debtor, its promoters or any other person associated with the management of the corporate debtor shall extend all assistance and cooperation to the interim resolution professional as may be required by him in managing the affairs of the corporate debtor.”

It is clear from the above that the old promoters’ or suspended directors must have equal rights and equal say in the resolution process.

In spite of their non-participation, the Wadhawans have multiple times repeated their settlement proposal to the CoC and to various legal forums saying that they are ready to pay all the creditors in full. However, their voices have never been heard.

Moreover, On 27th March, 2023, the Supreme Court of India dismissed the allegations made by the Enforcement Directorate (ED) and upheld the default bail granted to DHFL’s ex-promoters Kapil Wadhawan and Dheeraj Wadhawan by the Bombay High Court in the Yes Bank-DHFL Money Laundering case. No criminal charges against the Wadhawan brothers have been proved conclusively yet. This has a direct binding on the future outcome of the DHFL case.


Thus, Wadhawan brothers had got punishment before committing any cognizable offence.

Furthermore, never before we have heard about banks appealing against a verdict where they themselves stand to gain from the bad loans of the beleaguered company. The NCLAT verdict provided for 38k cr recovery to the banks and other creditors but the banks went for only 1 rupee. They are ready to slug it out in the SC against such windfall gains. The move presumably stinks of blatant underhand dealings. It is noteworthy that the COC valued the company’s assets at 26k crores based on which the bids were invited from Oaktree Capitals, Adani Group, Piramal etc., and consequently, the sell was made possible at throw away prices by ignoring Oaktree’s highest bidding price. The question is, how did CoC audit the AAA-rated ongoing concern’s assets at this slim amount?

After viewing rejected NCLT First Order (19/05/2021) and NCLAT Second Order (27/01/2022), we have come to the following conclusions:

A) Piramal or the CoC did not answer the pertinent questions raised by the NCLT for reconsidering the Settlement Proposal of DHFL’s ex-promoters;

B) We have observed that there are many irregularities and some points are “contrary to law” in the resolution process;

There are more such examples, where the NCLAT pointed out many anomalies that go against the CoC:

Why did the RBI approve Piramal’s Resolution Plan with so much incoherent elements?

If there are anomalies in the conduct of the CoC, the following observation must be noted:

A Resolution Professional will come within the meaning of ‘Public Servant’ under Section 2(c) of the Prevention of Corruption Act, 1988 and Section 233 of IBC does not protect where he has been apprehended red-handed with the bribe amount – Sanjay Kumar Agarwal Vs. Central Bureau of Investigation, Anti-Corruption Bureau, Dhanbad – Jharkhand High Court

If it is so, one must be sceptic enough about the RBI-appointed CoC for DHFL. In conclusion, one is bound to pronounce such words, viz. prejudiced, biased and pre-determined regarding the manufactured RP by the CoC and Mr. Piramal, allegedly with the aid of the ruling party.



Requesting for Returning the Fees from the Administrator and Representatives of the RBI-appointed CoC for DHFL

See also:

UPDATE (13/04/2023):

The following RTI application was filed to the Insolvency and Bankruptcy Board of India under the Ministry of Corporate Affairs, GOI, with the above enunciation:

In the context of the CIRP of the Dewan Housing Finance Corporation Limited (DHFL) under the IBC (2016), my question is:

Can the RBI-appointed Administrator for DHFL, Mr. R. Subramaniakumar along with the rest of the Committee of Creditors (especially the Representative of the Public Depositors, Mrs. Charu Sandeep Desai) perform the proceedings of the resolution process without the presence of the former owners or promoters of the company, viz., Kapil Wadhawan and Dheeraj Wadhawan?

I am citing Hon’ble NCLAT’s verdict to support the above question: “Suspended Director, who was representing the Corporate Debtor and has submitted the Settlement Proposal is entitled to participate in deliberation and negotiation undertaken by the CoC” (Dated November 28, 2022, In Sanjeev Mahajan Vs. Indian Bank, NCLAT New Delhi). Please view the supporting document and/or the following link for further investigation:


THE GREAT NON-WILFUL ABSENTEES IN THE RBI-APPOINTED CoC FOR DHFL

Please view the supporting document for further investigation.

UPDATE: (16/05/2023)

The reply to the RTI application came on 15/05/2023:

The applicant has sought reply to his query which is not covered under the ambit of definition of “information” in terms of section 2(f) of the RTI Act.

We responded by writing an email to the concerned appellate authority, which is given as follows:

To

Mr. Santosh Kumar Shukla,

First Appellate Authority and Executive Director

2nd Floor, Jeevan Vihar Building

3, Parliament Street, New Delhi, 110001

Dear Mr. Shukla,

I am writing this letter in response to the reply of the CPIO, Mr. Rajesh Kumar, on my RTI Application No.ISBBI/R/E/23/00050 (File No: IBBI/BS/RTI/RTI APP/246/).

He has stated in his reply:

The applicant has sought reply to his query which is not covered under the ambit of definition of “information” in terms of section 2(f) of the RTI Act.

PREMISE:

Let me cite the above-mentioned Section 2(f) of the RTI Act:

“Information” means any material in any form, including Records, Documents, Memos, e-mails, Opinions, Advices, Press releases, Circulars, Orders, Logbooks, Contracts, Reports, Papers, Samples, Models, Data material held in any electronic form and information relating to any private body which can be accessed by a Public Authority under any other law for the time being in force.

In the context of the above section, let me quote the question (substantiated by the relevant legal incident) contained in my RTI application:

  1. Can the RBI appointed Administrator for DHFL, Mr. R. Subramaniakumar along with the rest of the Committee of Creditors (especially the Representative of the Public Depositors, Mrs. Charu Sandeep Desai) perform the proceedings of the resolution process without the presence of the former owners or promoters of the company, viz., Kapil Wadhawan and Dheeraj Wadhawan?

  2. I am citing Honourable NCLAT verdict to support the above question: Suspended Director, who was representing the Corporate Debtor and has submitted the Settlement Proposal is entitled to participate in deliberation and negotiation undertaken by the CoC (Dated November 28, 2022, In Sanjeev Mahajan Vs. Indian Bank, NCLAT New Delhi).

  3. Please view the supporting document and/or the following link for further investigation: https://onceinabluemoon2021.in/2023/04/12/the-great-non-wilful-absentees-in-the-rbi-appointed-coc-for-dhfl/

The question is, does my question at all logically contradict the definition of “information” under the purview of the RTI since it can be “…any material in any form, including Records, Documents, Memos, e-mails, Opinions, Advices, Press releases, Circulars, Orders, Logbooks, Contracts, Reports, Papers, Samples, Models, Data material held in any electronic form”?

All the relevant materials (the term “material” in the semantic connotation of the Section 2(f): in electronic form or otherwise) related to my particular question, focusing on the DHFL CIRP, are openly available on the platforms of the portals of news websites in electronic form. I am citing two such supporting instances (dṛṣṭānta):

CONCLUSION:Therefore, the CPIO’s statement that our question does not come under the ambit of the RTI Act is not logically justifiable. Hence, proved. (Q.E.D.)Moreover, it is to be noted that the participation of the suspended directors of an insolvent company (the focal point of concern in our application) is necessary since Bankruptcy will not void personal guarantees: Hon’ble Supreme Court VIEW HERE ⤡ (As reported on May 22, 2021 ©The Times of India).I hope that the Appellate Authority shall delve into this matter and accordingly provide me, as an Indian citizen, the logically supported reply as per the requirement of my question: “

Can the RBI appointed Administrator for DHFL, Mr. R. Subramaniakumar along with the rest of the Committee of Creditors (especially the Representative of the Public Depositors, Mrs. Charu Sandeep Desai) perform the proceedings of the resolution process without the presence of the former owners or promoters of the company, viz., Kapil Wadhawan and Dheeraj Wadhawan?”

Thanking you in anticipation,

Yours Sincerely,

Dr. Debaprasad Bandyopadhyay

Encl.

1. The relevant RTI Application

2. The reply of the CPIO

UPDATE (14/06/2023):

The FAA’s reply order came on 14/06/2023 and is given as follows:

To summarize, the STOCK copy-paste reply stated:

  1. We have asked for “opinion” or “advice” that does not concern the RTI Act.

  2. We have asked “wh” questions.

HENCE, THE RTI AUTHORITY IS NOT LIABLE TO PROVIDE US WITH ANY INFORMATION WITH REGARD TO OUR QUESTIONS.

In reply to that, we mailed them yet again the following:

To Whom It May Concern

Dear All,

I am not surprised to see the stock reply of the FAA with regard to my counter-reply to my RTI Application No. ISBBI/R/E/23/00050. Even though I pertinently pointed out the fact that my concern in the application DOES indeed fall under the purview of “Information” as defined in the RTI Act (as substantiated through electronic material evidence), my questions have been left unanswered still. The FAA has pointed out that no “opinion” or “advice” can be asked within the purview of the RTI. However, I did not at all ask for such an opinion (in the Platonian connotation by distinguishing truth and opinion, fact and interpretation, reality and appearance etc.) but wanted the authority to yield me the necessary information that are related to the already stored information, which are publicly available on record with the IBBI and the Government of India. I didn’t even ask any “wh” questions, as falsely alleged by the FAA in his reply. Hence, I must confess in deep sorrow and disappointment that RTI is dead in India. It has ceased to function as an instrument of accountability to facilitate smooth communication between the so-called “governing class” and the so-called “governed” in a “partly free” plutocratic India:

With deep regret,

Dr. Debaprasad Bandyopadhyay

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