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2019 (7) TMI 638

he I&B Code or not? - HELD THAT:- The definition of ‘financial services’ as defined in Section 3(16) of I&B Code is not limited to the 9 activities as shown at Clause (a) to (i) of Section 3(16). The Clauses (a) to (i) are inclusive which means there are other services means there are other services which come within the meaning of “financial services” - The Registration of Certificate issue by RBI shows that it has granted certificate to commence/carry on business of “non-banking financial services”. However, the Respondent has not been allowed to accept the public deposit and such certificate is condition to other conditions as provided in the back of the Certificate. Chapter IIIB of The Reserve Bank of India Act, 1934 relates to “Provisions Relating to Non-Banking Institutions Receiving Deposits and Financial Institutions”. It is not applicable to State Bank or a banking company as defined in Section 5 of the Banking Regulation Act, 1949 or a corresponding new bank as defined in clause (da) of Section 5 of the Act or Regional Rural Bank or a cooperative bank or a primary agricultural credit society or a primary credit socie .....

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ss of providing financial service. 4. Learned counsel appearing for the Respondent submitted that the Adjudicating Authority has rightly rejected the application of the appellant since the Respondent is a financial service provider and is excluded from the definition of Corporate Person as per Section 3(7) of I&B Code. The reliance has also been placed on this Appellate Tribunal s decision Randhiraj Thakur Vs M/s Jindal Saxena Financial Services, Company Appeal (AT)(Insolvency) No.32 and 50 of 2018 wherein this Appellate Tribunal held that the application filed by financial creditor under Section 7 of the I&B Code is not maintainable against the company which has been granted a certificate of Registration under the Reserve Bank of India Act, 1934 giving status of a Non-Banking Financial Institution. 5. Learned counsel appearing on behalf of the Appellant referred to reply filed by the respondent wherein it has pleaded: It is an admitted position that the Respondent is a holding company, which invests in shares, bonds, debentures, debts or loans in group companies and gives guarantees on behalf of group companies. Being a holding company, the Respondent is a separate entity .....

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(17) financial service provider means a person engaged in the business of providing financial services in terms of authorisation issued or registration granted by a financial sector regulator; 9. Financial service has been defined under Section 3(16) as follows:- Section 3-Definitions- In this Code, unless the context otherwise requires,- (16) financial service includes any of the following services, namely- (a) Accepting of deposits; (b) Safeguarding and administering assets consisting of financial products, belonging to another person, or agreeing to do so; (c) Effecting contracts of insurance; (d) Offering, managing or agreeing to manage assets consisting of financial products belonging to another person; (e) Rendering or agreeing, for consideration, to render advice on or soliciting for the purposes of- (i) Buying, selling or subscribing to, a financial product; (ii) Availing a financial service; or (iii) Exercising any right associated with a financial product or financial service; (f) Establishing or operating an investment scheme; (g) Maintaining or transferring records of ownership of a financial product; (h) Underwriting the issuance or subscription of a financial product .....

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financial product Underwriters No i. Selling providing or issuing stored value or payment instruments or providing payment services Payment Banks such as PAYTM No 12. Learned counsel for the appellant further submits that the Respondent has pleaded to claim financial service provider as follows:- It is the case of the Respondent, as pleased in paragraph 8 of their Reply to Section 7 Petition (@Pg 398 of Appeal Paper Book) that they are a financial service provider because That the Respondent is primarily in the business of investment in shares, bonds, debentures, debts or loans in group companies, money market instruments including money market mutual funds and giving guarantees on behalf of group companies and is hence providing financial services . The Respondent is, therefore, a financial service provider and being a financial service provider cannot be termed as a corporate person . It is an admitted position that the Respondent is a holding company, which invests in shares, bonds, debentures, debts or loans in group companies and gives guarantees on behalf of group companies. Being a holding company, the Respondent is a separate entity altogether and hence the services being p .....

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class of insurance business. (v)managing, conducting of supervising, as foreman, agent or in any other capacity, of chits or kuries as defined in any law which is for the time being in force in any State, or any business, which is similar thereto; (vi) collecting, for any purpose or under any scheme or arrangement by whatever name called, monies in lump sum or otherwise, by way of subscriptions or by sale of units, or other instruments or in any other manner and awarding prizes or gifts, whether in cash or kind, or disbursing monies in any other way, to persons from whom monies are collected or to any other person, But does not include any institution, which carries on as its principal business,- (a) Agricultural operations; or (aa)Industrial activity; or (b) The purchase, or sale of any goods (other than securities) or the providing of any services; or (c) The purchase, construction or sale of immovable property, so, however, that no portion of the income of the institution is derived from the financing of purchases, constructions or sales or immovable property by other persons. Explanation-For the purposes of this clause, industrial activity means any activity specified in sub-s .....

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