Decided on January 31,2020

Vinay Kumar Mittal Appellant
Dewan Housing Finance Corporation Ltd. Respondents


L.NAGESWARA RAO,J. - (1.)The above appeals are filed against the interim orders passed by the High Court of Judicature at Bombay on 10.10.2019, 17.10.2019 and 13.11.2019. The order dated 08.11.2019 passed by the Debts Recovery Tribunal-I, Mumbai following the order of the High Court dated 17.10.2019 is also in challenge in the above appeals. For the sake of convenience, the facts in Commercial Suit No.1034 of 2019, filed by Reliance Nippon Life Asset Management Ltd. are referred to in this judgment. Reliance Nippon Life Asset Management Ltd. (hereinafter referred to as, 'Respondent No.4') filed Commercial Suit No.1034 of 2019 for recovery of a sum of Rs.479,31,29,113/- along with interest at the rate of 18 per cent. In a nutshell, the case of Respondent No.4 is that it subscribed to Non-Convertible Debentures (NCDs) of Dewan Housing Finance Corporation Limited (DHFL, hereinafter referred to as, 'Respondent No.1') to the tune of Rs.63,41,72,000/, that were issued through a public offer. In 2017-2018, Respondent No.4 further subscribed to NCDs of Respondent No.1, aggregating to Rs.365 crores, issued on a private placement basis. Respondent No.4 became entitled to early redemption of private placement NCDs in March, 2019 due to the down grading in ratings of the NCDs issued by Respondent No.1. Respondent No.1 failed to pay the entire amount towards the early redemption.
(2.)By an order dated 30.09.2019, the High Court of Judicature at Bombay restrained Respondent No.1 from making further payments disbursements to any unsecured creditors and secured creditors except in cases where payments are to be made on a pro-rata basis to all secured creditors out of its current and future receivables in preference to the payments owed to Respondent No.4.
(3.)By an order dated 10.10.2019, the High Court directed the continuance of the order passed on 30.09.2019 till the disposal of the motion. Similar orders were passed in the interim applications filed in the other commercial suits by orders dated 17.10.2019, 08.11.2019 and 13.11.2019. It was clarified by the High Court on 13.11.2019 that Respondent No.1 shall not be prevented from making any payments overdue or payable under the assignment agreements in favour of any or all such banks or assignees of loans.

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