Bombay HC Reserves Order In PIL Seeking Expeditious Sale Of HDIL Assets In Order To Pay Back PMC Bank Depositors [Read Petition]

The Bombay High Court on Thursday reserved its order in a Public Interest Litigation filed by Advocate Sarosh Damania seeking public auction of all Housing Development and Infrastructure Limited (HDIL) assets either mortgaged with the crisis-hit Punjab and Maharashtra Co-operative Bank or attached by the Economic Offences Wing, Mumbai.

A division bench of Justice Ranjit More and Justice SP Tavade noted that repayment of loan to PMC bank would be in the interest of depositors and lenders of the bank.

The court made the observation a day after HDIL promoters Rakesh Wadhwan and Sarang Wadhwan submitted that they had no objection if all the encumbered properties are sold for recovery of money payable to the bank.

HDIL's counsel Vikram Chaudhari told the Court that the total value of encumbered properties is Rs.11,000 crore and as per EOW's FIR, the total dues to PMC bank are Rs.4355 crore, hence the properties that are already attached by the EOW or are mortgaged with the bank can be liquidated and there was no need to auction or attach unencumbered properties.

Appearing for Enforcement Directorate Hiten Venegaokar submitted that with respect to certain properties, the valuation must be ascertained as there are third party rights with respect to certain properties. He also informed the bench that ED had not attached assets of the accused even though they were being investigated is because the agency wanted to keep in mind the interest of depositors of PMC.

Damania's petition also prays to restrain lower courts to process any bail application of the respondent accused persons (Wadhwans) until the amount defrauded is recovered.

In an affidavit in another PIL filed by depositors of PMC, RBI referred to its own inspection report of PMC bank dated March 31, 2018, which stated -

"The bank submitted fraudulently manipulated data to RBI for sample checks, the sample of accounts picked for inspection did not contain undisclosed HDIL related accounts. The disclosed HDIL accounts were seen and majority of them were assessed as NPA's.

Conflict of interest of Shri Waryam Singh as Chairman of PMC Bank and as a former Managing Director of HDIL was also commented upon in the report along with the attempt by the bank to show disclosed accounts of HDIL group as standard by sanction of new loans to close old NPA accounts in non-adherence of RBI Master Circular dated July 1, 2015 on IRAC norms. Consequently, the assessed NPA's of the bank were significantly higher than the reported NPAs." 

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