The Principal Bench of the National Company Law Tribunal on December 6, 2018, has dismissed HDFC Ltd’s insolvency plea against Malvinder and Shivinder Singh owned RHC Holding Pvt. Ltd for recovery of outstanding dues of over Rs 41 crore.
A two-member Bench of the Tribunal led by its
PresidentM.M. Kumar and comprising of member
Mr. S.K. Mohapatra held that RHC Holding, being a “non-banking financial company” was outside the purview of
the Insolvency and the Bankruptcy Code, 2016. HDFC had in July this year moved NCLT to recover Rs 41 crore from RHC Holding after the latter had stopped responding to its demand notices. In its petition, the housing finance company said that it had lent around Rs 200 crore to RHC in April 2016. The RHC Holding had paid the interest for the first quarter on time, it started defaulting on interest and further payments, HDFC said.
Further, HDFC added that though some of the amount was recovered by HDFC by selling the shares pledged by RHC Holding, a payment of around Rs 41 crore was still pending. The Tribunal taking note of the definition of ‘corporate person’ in the Code in which financial service provider is expressly excluded has held that the provisions of
Part 2 of the Code would not apply to RHC Holding. No creditors can invoke
Section 7 or
Section 9 of the Code to initiate corporate insolvency resolution process against any financial service provider, the Tribunal said. The Bench thus decreed that “
The respondent company is primarily in the business of investment of shares, bonds, debentures, debts or loans in group companies, money market instruments including money market mutual funds and giving guarantees on behalf of the group companies and therefore providing financial services. Accordingly, respondent company being a financial service provider cannot be termed as a corporate debtor under the Code.” The Tribunal also noted that no notification under
Section 227 of the Code has been issued to extend the application of Section 7 and 9 of the Code to RHC Holding.
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Legal Insiders
Dec 28, 2020
Dev Kumar Patel
(
Editor: Ekta Joshi
)
15 Shares
In an appreciable move, National Company Law Tribunal, New Delhi on 24th December 2020 has decided to start second phase of e-court which is Automatic Case Number Generation for all the benches wherein e-filing procedure has been implemented. The order was issued after the approval of the Hon’ble Acting President Shri BSV Prakash Kumar.In the order it was informed that the Competent Authority has decided that Automatic Case Number Generation should be mandatorily started from 1st January...
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Judiciary
Nov 23, 2020
Richa Shah
(
Editor: Ekta Joshi
)
7 Shares
The NCLT has no jurisdiction to examine the legality or validity of action taken under MPID Act, 1999 as per the Bombay High Court. It said that it is only the designated Court constituted under Section 6 if the said act that will have exclusive jurisdiction to deal with the same.Division bench consisted of two judges: Justice SC Gupte and Justice Madhav Jamdar. The order dated January 28, 2019 was quashed and set aside the passed by the Member (Judicial), NCLT, Mumbai Bench and they directed...
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