WHETHER A NBFC OR MFIs IS A CORPORATE PERSON OR
FINANCIAL SERVICE PROVIDER UNDER IBC CODE 2016?
WHETHER THEY CAN SEEK RELIEF UNDER IBC CODE 2016?
Jindal Saxena Financial Service (P.) Ltd. V.
Mayfair Capital (P.) Ltd.-MANU/NC/0074/2018
WHETHER A NBFC IS A CORPORATE PERSON OR FINANCIAL PROVIDER?
NCLT held that
where the petitioner NBFC files petition u/s 7 of IBC for recovering deposit
made by it, the respondent cannot contend that having accepted deposits,
petitioner NBFC has become 'financial service provider' and has been excluded
from defination of 'Corporate person' u/s 3(7).
NCLT , NEW DELHI HELD THAT A NBFC IS A
CORPORATE PERSON.
Since NBFC has
various facet of other activities, it will not be covered by the term
'financial service provider'.
However
, NCLAT held in -Randhiraj
Thakur, Director, Mayfair Capital (P) Ltd. Vs. M/s. Jindal Saxena Financial
Services (P) Ltd is not a Corporate Person
under IBC 2016?
If the entire
scheme of the I&B Code is seen, it will be evident that the Code is to
consolidate and amend the laws relating to reorganisation and insolvency
resolution of ‘corporate persons’, ‘partnership firms’ and ‘individual’ in a
time bound manner. It is a self-contained Code which is exhaustive in nature
when it comes to re-organisation and insolvency resolution.
FINANCIAL SERVICE PROVIDERS
However, an
exception had been carved out while enacting the Code that the ‘financial
service providers’ have been kept outside the purview of the Code. Being a
consolidating legislation only those acts are permitted which are mentioned in
the Code and it cannot be made applicable to ‘financial service providers’
including ‘non-banking financial institutions’ and MFI’s banks, which have been
kept outside the purview of the Code. It is a self-contained Code which is
exhaustive in nature when it comes to reorganisation and insolvency resolution.
However, an exception had been carved out while enacting the Code that the
‘financial service providers’ have been kept outside the purview of the Code.
FINANCIAL SERVICE PROVIDERS WILL NOT
COME UNDER IBC CODE 2016 FOR RELIEF
If the entire
scheme of the I&B Code is seen, it will be evident that the Code is to
consolidate and amend the laws relating to reorganisation and insolvency
resolution of ‘corporate persons’, ‘partnership firms’ and ‘individual’ in a
time bound manner. It is a self-contained Code which is exhaustive in nature
when it comes to reorganisation and insolvency resolution.
However, an exception had been carved out
while enacting the Code that the ‘financial service providers’ have been kept
outside the purview of the Code. Being a consolidating legislation only those
acts are permitted which are mentioned in the Code and it cannot be made
applicable to ‘financial service providers’ including ‘non-banking financial
institutions’ and MFI’s banks, which have been kept outside the purview of the
Code.
