Bombay HC allows DHFL to repay lenders
The Bombay High Court on Wednesday allowed a plea by a group of banks, including the State Bank of India, seeking to modify its earlier order restraining payments by mortgage financier DHFL to them. The high court said payments to banks and NBFCs, pursuant to any securitisation or similar agreement, will be allowed. Last month, Justice A K Menon had restrained the Dewan Housing Finance Corporation (DHFL) from making further payments to any unsecured creditors until further orders. Financial Institutions, including SBI, Union Bank of India, Bank of Baroda, HDFC and others, filed intervention plea before Justice Menon on Wednesday, seeking modification of the order. They claimed that they did not fall within the category of creditors, being owners of assets securitised to the DHFL. The DHFL was making regular payments before the high court passed the order in October, and if it was not amended, securitised loans may become non-performing assets (NPAs), the plea said. The judge granted the plea, and said payments to banks and NBFCs, pursuant to any securitisation or similar agreement, will be allowed.
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