TMI Blog2019 (7) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... itutions . 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 society. Therefore, it is clear that the Respondent, a non-banking financial institution is carrying on business of financial institution and thereby it being financial service provider do not come within the meaning of Corporate Person/Corporate Debtor. So far as the allegation that the Respondent, Non-Banking Finance Company, is taking deposits from others in violation of conditions imposed by the Reserve Bank of India, such issue cannot be decided by the Adjudicating Authority while considering an Application under Section 7 or 9 of the I B Code. Only on such ground the Adjudicating Authority cannot admit or reject an application under Section 7 or 9 of the I B Code. The application under Section 7 of I B Code is not maintainable - Appeal dismissed. - COMPANY APPEAL (AT)(INSOLVENCY) NO.26 OF 2019 - - - Dated:- 10-7-2019 - Mr S.J. Mukhopadhaya, Chairperson ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve 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 altogether and hence the services being provided by the Respondent constitutes offering and managing assets consisting of financial products belonging to another person. Referring the aforesaid pleadings, it was submitted that the respondent itself has admitted that it is not a financial service provider. 6. The Adjudicating Authority has noticed the Certificate of Registration issued by the Reserve Bank of India, Department of Non-Banking Supervision, New Delhi Regional Office in exercise of the powers conferred on the Reserve Bank of India by Section 45 IA of the Reserve Bank of India Act, 1934, which is as follows:- RESERVE BANK OF INDIA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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; o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rposes of ( i ) Buying, selling or subscribing to a financial product; ( ii ) Availing a financial service, or ( iii ) Exercising any right associated with financial product or financial services; Stock Brokers, SEBI registered Merchant Bankers, SEBI registered Venture Capitalists No f . Establishing or operating an investment scheme SEBI approved investment schemes such as REIT No g . Maintaining or transferring records or ownership of a financial product Registrar and Transfer Agents No h . Underwriting the issuance or subscription of a financial product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. 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 society. 16. Section 45-I(a) defines- 45-I Definition-In this Chapter, unless the context otherwise requires- (a) business of a non-banking financial institution means carrying on the business of a financial institution referred to in clause (c) and includes business of a non-banking financial company referred to in clause (f) Xxx 17. Section 45-I(c) defines financial institutions means any non-banking institution which carries on as its business or part of its business any of the following activities-namely- (i) the financing, whether by way of making loans or advances or otherwise, of any activity other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) Such other non-banking institution or class of such institutions, as the Bank may, with the previous approval of the Central Government and by notification in the Official Gazette, specify. 19. Therefore, it is clear that the Respondent, a non-banking financial institution is carrying on business of financial institution and thereby it being financial service provider do not come within the meaning of Corporate Person/Corporate Debtor. 20. So far as the allegation that the Respondent, Non-Banking Finance Company, is taking deposits from others in violation of conditions imposed by the Reserve Bank of India, such issue cannot be decided by the Adjudicating Authority while considering an Application under Section 7 or 9 of the I B Code. Only on such ground the Adjudicating Authority cannot admit or reject an application under Section 7 or 9 of the I B Code. If the terms and conditions imposed by Reserve Bank of India or there is violation of any of the provision of Reserve Bank of India, one may bring the same to the notice of Reserve Bank of India and not before the Adjudicating Authority. 21. For the reasons aforesaid, we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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