The National Company Law Appellate Tribunal (NCLAT) in an order has upheld National Company Law Tribunal’s (NCLT) Order to initiate insolvency proceedings against HDIL and rejected the plea filed by its promoter, Mr. Rakesh Wadhwan. NCLAT observed in its order that NCLT had given enough opportunity and time to Housing Development & Infrastructure Ltd. (HDIL) to settle the matter with the money lenders but HDIL failed to do so.
Earlier on 20th August, 2019, NCLT had directed initiation of insolvency proceedings against HDIL after Bank of India filed an insolvency plea against HDIL after the company defaulted loan amount of Rs. 522 crores.
NCLAT further rejected Mr. Wadhwan’s contention that HDIL wasn’t given enough time to file a reply whereas they were given enough time but they chose not to file a reply. HDIL’s records also show that the company was granted time right since the beginning of February, 2019 till March, 2019 in the view of a possible settlement.
Bank of India had loaned a total of over Rs.1000 crores to the company, but the company defaulted an amount of Rs. 522 crores. Thus the bank filed a plea for insolvency of the company in 2018 but it was later withdrawn as the company offered a one-time settlement to settle the amount.
This was the second time the bank had approached the tribunal against the same defaulter. Earlier on 10th July, 2020, a court from Mumbai refused Mr. Rakesh Wadhwan and Mr. Sarang Wadhwan’s bail application. They were accused in a multi-crore scam involving Punjab & Maharashtra Co-operative Bank. They have been accused of stealing a total of Rs. 4355 crore by committing a fraud which was revealed in September, 2019. The case is under investigation by the Enforcement Directorate along with the Economic Offences Wing of Mumbai Police.
