The Mumbai bench of the National Company Law Tribunal (NCLT) has admitted troubled mortgage lender Dewan Housing Finance Corporation Ltd. (DHFL) for bankruptcy proceedings following an application filed by the Reserve Bank of India (RBI). Admitting the petition, the NCLT said the petition deserved admission.
DHFL is the first financial services provider against which insolvency proceedings have been initiated after the government issued a notification last month specifying the categories of financial service providers that can be taken up for resolution under the generic framework of the Insolvency and Bankruptcy Code.
Earlier, RBI had superseded the board of DHFL and said bankruptcy proceedings will be initiated against the company.
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R.Subramaniakumar, ex-MD and CEO of Indian Overseas Bank was appointed as the administrator and a three-member committee was formed to assist the administrator.
While admitting the application, the bench noted that there was no party in the case who could challenge the application for rejection.
“Is there any other view which we are missing,” the bench comprising Justice M.K. Shrarat and Chandra Bhan Singh observed.
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DHFL, which has a debt of close to ₹40,000 crore to the banks, has defaulted on repayments.
Several banks, including State Bank of India and ICICI Bank, had classified the loans as non-performing, which prompted the banking regulator to initiate insolvency proceeding against the company.