DHFL Moratorium: Depositor Rights & RBI Intervention

The High Court recently addressed the case involving Reliance Nippon Life Asset Management Ltd. and DHFL, with respondent No.4 being a key depositor. The court highlighted the commencement of a moratorium from 29.11.2019 and the challenges faced by nearly one lakh depositors. The Reserve Bank of India’s intervention and the petition filed against DHFL have sparked discussions about depositor rights. Stay informed on this critical legal matter.


  • The High Court noted that the moratorium started from the date of application on 29.11.2019.
  • The order issued by the Debts Recovery Tribunal-I, Mumbai on 08.11.2019 after the High Court’s order on 17.10.2019 is under challenge in the appeals.
  • The facts of Commercial Suit No.1034 of 2019 filed by Reliance Nippon Life Asset Management Ltd. are cited for convenience in this judgment.
  • Respondent No.4 subscribed to NCDs of DHFL through public offer and private placement.
  • DHFL failed to pay the entire amount towards the early redemption of NCDs.
  • High Court orders restrained DHFL from making further payments to unsecured and secured creditors, except on a pro-rata basis to secured creditors preferring payments owed to Respondent No.4.
  • NCLT directed a moratorium to commence from 29.11.2019.
  • Administrator updated list of depositors and outstanding amounts payable.
  • Public announcement made under IBC Regulations for initiation of Corporate Insolvency Resolution Process.
  • Public depositors included as a class of creditors under IBC Section 21 (6A) (b).
  • Administrator permitted to cause public announcement for CIRP initiation.
  • Committee of Creditors meeting held on 30.12.2019.
  • NCLT confirmed Mr. R. Subramaniakumar as Administrator to perform RP functions.
  • RBI filed petition for CIRP initiation against DHFL.
  • Essential goods or services supply permitted to continue to DHFL during CIRP.

Also Read: State of Karnataka v. [Respondent]


  • Mr. Jayant Bhushan, learned Senior Counsel representing the Appellants argued that repayments of the deposits should be given priority over debenture holders’ claims.
  • The Reserve Bank of India filed an application under specific sections of the RBI Act.
  • The Committee of Creditors resolved to consider the interests of depositors as per IBC provisions.
  • An Interlocutory Application was filed by the Appellants to restrain lending operations until deposit repayments are made.
  • Mr. Bhushan expressed concerns that previous orders might affect depositor claims consideration by the Committee of Creditors and the Administrator.
  • The Court decided that depositor claims should be considered independently, without influence from past orders.
  • Mr. Bhushan argued against the decision allowing lending operations without deposit repayments, calling it arbitrary and illegal.

Also Read: Legal Analysis of Entrance Exam Regulations in AYUSH Courses


  • The depositors are being represented by the Authorized Representative before the Committee of Creditors.
  • The institution of any suit, continuation of proceedings, or execution of any decree against the Financial Service Provider is prohibited during the moratorium.
  • The decision of the Committee of Creditors taken on 30.12.2019 will not be interfered with.
  • There are nearly one lakh depositors who have invested with the Financial Service Provider.
  • Depositors are allowed to raise concerns before the Committee of Creditors, Administrator, and if necessary, the NCLT.
  • The appeals are against the interim orders passed by the High Court at Bombay on specific dates.
  • Some deposits have matured, and some depositors are critically ill.
  • The concerns and rights of the depositors will be considered in accordance with the law.

Also Read: Challenging Foreign Contribution Regulations: Legal Analysis


Case Number: C.A. No.-000654-000660 / 2020

Click here to read/download original judgement

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