The National Company Law Tribunal on Thursday allowed Indiabulls to recover its dues originating from loans assigned to it by Dewan Housing Finance Ltd., saying these transactions were completed before the moratorium kicked in.
The counsel representing Indiabulls said the diversified finance company wants to recover dues against loans assigned to it by DHFL as the assignment was done prior to the imposition of the moratorium.
The insolvency regulations specifically exclude third party assets held by a corporate debtor, he added.
DHFL's Reserve Bank of India-appointed administrator and IDBI Trusteeship did not object to this application.
The tribunal directed the distribution of current and future receivables as per the assignment agreement between DHFL and Indiabulls entities.
On Jan. 27, two Indiabulls Group companies had filed an application in NCLT against IDBI Trusteeship to recover dues against loans assigned to them by DHFL.
The non-banking finance company had entered into an arrangement for assignment of loans with Indiabulls Commercial Credit and Indiabulls Housing Finance Ltd. for consideration.
According to the arrangement, the Indiabulls entities became the assignee of the loans and DHFL ceased to hold any rights in such loans after the assignment.
DHFL continued to act as a collecting agent for the two Indiabulls entities and deposited the collections with IDBI Trusteeship.
As per the arrangement, IDBI Trusteeship was entitled to 20 percent of the collections deposited with it against certain loans.
DHFL became the first financial services company to be referred to the NCLT under new rules notified by the government on Nov. 15, 2019.
In December 2019, NCLT had admitted a Reserve Bank's move to initiate insolvency proceedings against the financial services company.
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