PF scam: UPPCL plans to move SC for full refund from DHFL
LUCKNOW Chances of the Uttar Pradesh Power Corporation Ltd (UPPCL) getting refund of more than ₹2,000 crore employees’ provident fund it invested as fixed deposits (FDs) in Dewan Housing Finance Ltd (DHFL) allegedly against investment guidelines are getting thinner, people aware of fresh developments said.
The corporation has already lost its case in the National Company Law Tribunal (NCLT) in June 2021 and the National Company Law Appellate Tribunal (NCLAT) last week for getting the full refund with interest from the broke DHFL.
And now, in a last-ditch attempt, the corporation is gearing up to move the Supreme Court for relief.
“On January 27, the NCLAT rejected our plea for full refund of the money deposited in the DHFL. The appellant tribunal refused to interfere with the NCLT’s earlier order in this regard,” a senior UPPCL official said. “As a last resort, we will soon move the Supreme Court after discussing the issue in the board meeting of the UP State Power Sector Employees Trust,” he added.
Between March 2017 and September 2019, the UPPCL PF Trust invested ₹2631.20 crore in the form of 319 FDs with the DHFL, a Mumbai-based housing finance company, allegedly in violation of the Central government’s investment guidelines.
The decision to invest in the DHFL was taken just a few days before the Yogi Adityanath government came to power, but the investment continued in the same manner under the new regime as well with the new UPPCL bosses failing to detect irregularities committed by their predecessors.
The alleged scam came in public domain in October-November 2019 after the then UPPCL chairman Alok Kumar ordered a departmental probe on receiving an anonymous complaint.
The UPPCL has since approached the Reserve Bank of India (RBI), Mumbai high court and tribunals to get the money back from the DHFL even as the insolvent company was in September acquired by the Piramal Group for ₹34,250 crore.
On the RBI’s advice, the corporation approached the Mumbai high court, which after more than a year of hearing the matter, directed the UPPCL to present its case before the NCLT even as in the meantime the committee of creditors (CoC) to the DHFL worked out a resolution plan under the Insolvency and Bankruptcy Code.
“As per the plan approved by a thumping majority, the depositors including the UPPCL were supposed to get only 23.08% of the total money they deposited with the DHFL and the UPPCL later got around ₹500 crore in keeping with the settlement,” the UPPCL official pointed out.
The UPPCL and other creditors/depositors approached the NCLT with the plea that it declared the resolution plan as approved by the CoC as illegal or alternatively modify the plan to direct that the applicants be refunded their fixed deposits along with interest in terms of the provisions of the National Housing Bank.
The NCLT, however, vide its orders dated June 7, 2021, refused to accept the plea saying that the appellants were not entitled to full payment under the resolution plan, which it said, was entirely compliant with the law.
The tribunal also pointed out that the appellants had been aware of the risks associated with their investment with the DHFL and while making their investments, the appellants were informed that their deposits were unsecured and “pari-passu” with other unsecured liabilities.
Aggrieved by the order, the creditors including UPPCL, moved the NLCAT. But the appellant tribunal upheld the NCLT’s order of June 7, 2021.
“The impugned order dated June 7, 2021, passed by the National Company Law Tribunal in miscellaneous application nos 416 and 417 of 2020 in company petition no. 4258/MB/2019, needs no interference,” the appellant body said in its order passed last week (January 27).
Another UPPCL official, who is a part of the management, said though there was little hope left for the refund of the remaining around ₹2,000 crore unless the Supreme Court decided otherwise, it would not affect interests of employees at all. “However, the corporation may have to struggle in the time to come to make payments to the staff,” he said.
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