FD holders move Bombay HC seeking priority in DHFL payments

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Mumbai | Published: November 14, 2019 2:59:06 AM

The petition urged the court to direct DHFL to make the payment of Rs. 55 crore to deposit holders.

More than one lakh fixed deposit holders of DHFL risk losing their savings after the company stopped making payments to deposit holders.

A group of fixed deposit (FD) holders of Dewan Housing Finance Corporation (DHFL), led by Air Force Group Insurance (AFGI) Society, has moved the Bombay High Court so that they can be made a part of the main petition of mutual funds against the stressed mortgage financier.

The petition urged the court to direct DHFL to make the payment of Rs. 55 crore to deposit holders. The counsel of these depositors said, “The court should give priority to fixed deposit holders, over other creditors as the NHB Act mandates it.”

Justice AK Menon directed DHFL to file a reply on the petition.

More than one lakh fixed deposit holders of DHFL risk losing their savings after the company stopped making payments to deposit holders.

As on July 6, the company had public deposits of Rs. 6,188 crore. The Bombay HC on November 13 directed DHFL to make payments to banks and NBFCs. However, no direction was given for payments to deposit holders.

FE had reported earlier that the committee of creditors (CoC) is looking to tweak the resolution plan for beleaguered DHFL so that the unsecured deposit holders are repaid in full.

The current resolution plan proposes to pay unsecured FD holders in a staggered manner over 10 years. Unsecured public deposits payable till October 31 have been assumed to be paid with existing interest rates, while the balance are proposed to be restructured over 10 years with no interest, the company had disclosed in its resolution plan dated September 27.

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