New Delhi, Mar 15 (IANS): In what appears to be an unusual move, some of the secured creditors of DHFL, which have now been taken over by Piramal Capital and Housing Finance Limited, have filed a petition in the Supreme Court against the order of NCLAT, which gives them more money than what they had originally bargained for.

Some members of the Committee of Creditors (CoC) - Union Bank of India, State Bank of India, Bank of India, Canara Bank, Punjab National Bank, and Central Bank of India among others - have filed a petition in the apex court, challenging the National Company Law Appellate Tribunal (NCLAT) order. The hearing is scheduled for March 21, according to the Supreme Court's website.

Notably, in an appeal filed by 63 moons technologies, the NCLAT had directed that recoveries made in avoidance applications filed under Section 66 of the Insolvency and Bankruptcy Code (IBC) can only accrue for the benefit of the creditors.

The Resolution Plan proposed by Piramal Capital to take over DHFL had provided that these recoveries will be appropriated at an ascribed value of Re 1 by Piramal Capital. Later, 63 moons challenged this part of the Resolution Plan which has been upheld by the NCLAT. Now, as a result of the NCLAT order, 63 moons and several other creditors stand to gain up to a whopping sum of Rs 46,000 crore.

Understandably, Piramal Capital has challenged the NCLAT order in the apex court. Strangely, according to observers in the market, some creditors who stand to gain an astronomical sum seem to be unhappy with such gains and have independently challenged the NCLAT order, perhaps giving support to Piramal Capital's appeal.

Industry experts are also amazed at the move when many PSUs, which have been facing the brunt of several NPAs, were getting up to a sum of Rs 46,000 crore on a platter without even having bargained for it in name of commercial wisdom. "One can only wonder what is the commercial wisdom behind challenging an order that gives you money without any effort?" they quipped.

The apex court will also hear the appeal filed by the Piramal Group against the recent NCLAT order that ruled a stipulation in the DHFL resolution plan as "illegal" regarding recovery of avoidance transactions.

In January, in the matter of the 63 moons challenge, the NCLAT had set aside the term in the DHFL resolution plan that permitted Piramal Group to appropriate recoveries from avoidance transactions. The tribunal had sent the authorised resolution plan back to the CoC to reconsider this aspect of the valuation of avoidable transactions that pertain to the recoverable belongings.

The CoC, as part of the resolution plan, agreed to Piramal Group getting all future recoveries of bad loans of about Rs 38,000 crore falling under avoidance transactions and accepted Re 1 from Piramals as the value assigned for such a benefit. 63 moons, which invested Rs 200 crore in DHFL NCD's, had challenged this CoC decision.

In its appeal, 63 moons asked whether the Piramal group could appropriate all recoveries from avoidance applications filed under Section 66 of the IBC just because the CoC has agreed to assign a completely arbitrary and unrealistic value of one rupee. It cited a Delhi High Court judgment in Venus Recruiters Private Ltd to back its claims, saying the bankruptcy laws of countries, like the US, also advocate creditors' benefit, directly or indirectly.

63 moons had argued before the adjudicating authorities that the Piramal Group could not appropriate all recovery from the vast amount of DHFL loans listed in 'avoidance applications' under Section 66 of the IBC.

It must be noted that under the IBC, "avoidance transactions" are recognised as undervalued, fraudulent, or extortionate by the previous promoters.

The NCLAT ruled this stipulation as "illegal" and said that all recoveries on avoidance transactions should go for the benefit of only the creditors and not the successful resolution applicant. It also noted that in bidding for DHFL, the Piramal group had not factored in any recoveries from avoidance transactions. In fact, it was argued that there would be minimal recovery and, hence, a value of one rupee was ascribed to this large outstanding.

Meanwhile, Kapil Wadhawan, former promoter of DHFL has also filed a fresh petition in the Supreme Court, challenging three orders of the NCLAT. In his petition, Wadhawan submitted that the three orders have deprived him, as a former Director and guarantor of DHFL, from participating in the proceedings of the CoC.