NCLT dismisses HDFC Plea For insolvency Proceedings against RHC Holding

Business Dec 07, 2018 Editor : Shreya Bansal 0 Shares

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.

Also Read - NCLT Benches to Switch Back to Virtual Hearings From 12th April.

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.

Also Read - NCLT to switch to virtual hearings from April 12, 2021

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.

NCLT Benches to Switch Back to Virtual Hearings From 12th April.

Legal Insiders Apr 13, 2021 Athira Nair ( Editor: Ekta Joshi ) 0 Shares

Due to a significant increase in the number of COVID-19 cases throughout the country. The National Company Law tribunal (NCLT) has decided to take up regular hearing through Video Conference.This decision comes in rebuttal of its order dated February 23rd, for resumption of physical hearings. The tribunal has sent a notice to the benches stating the they will take up the cases through virtual mode. The principal bench of NCLT shall comprise of BSV Prakash Kumar (Acting President) and...

Read full post

NCLT to switch to virtual hearings from April 12, 2021

Legal Insiders Apr 10, 2021 Prachi Jain ( Editor: Ekta Joshi ) 4 Shares

Due to the raging pandemic throughout the country, the NCLT, National Company Law Tribunal has switched to video conference with effect from April 12, 2021, at all its Benches.The decision supersedes the order dated February 23, 2021 for the resumption of physical hearings.The Benches that will take up the cases through virtual hearings are already notified by the Tribunal.The principal bench of the NCLT shall comprise of BSV Prakash Kumar (acting president) and Hemant Kumar Sarangi...

Read full post