TMI Blog2019 (8) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... t initiate action against Respondent under provisions of I B Code - the present Application under Section 9 of the Code is not maintainable against Respondent. The Petitioner stated that Respondent did not pay the money due to him when demanded. It is interesting to note that Respondent was prepared to pay the money and settle the claim of Petitioner before admission. He ought to have accepted the same and one cannot be permitted to take recourse to the provisions of the Code for settling personal vendetta. CIRP cannot be initiated against the Company when it is prepared to pay or settle the claim of the Petitioner. Petition rejected. - CP (IB) No. 339/9/HDB/2018 - - - Dated:- 10-12-2018 - SHRI RATAKONDA MURALI, MEMBER (JUDICIAL) For The Petitioner : Mr Praveen Kumar Mundra, Party-in-person For The Respondent : Mr Y. Suryanarayana, Advocate ORDER Per : SHRI RATAKONDA MURALI, MEMBER (JUDICIAL)-Author 1. This petition is filed by Mr. Praveen Kumar Mundra, who is the Operational Creditor stating that CIL Securities Limited (Corporate Debtor) herein had defaulted in repaying a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporated under the name and style of Chunilal Investments Private Limited on 29.06.1989 and subsequently became public. The name of the Company was changed to Chunilal Investments Limited and fresh Certificate of Incorporation was obtained on 28.10.1994. It is averred the company is in the business of stock broking, depository participant, Registrar and Share Transfer and Merchant Bank and has 20 authorised persons/brokers/branches spread all over the Country and that the net worth of the Company is at ₹ 21,18,87,285.00 as on 31.03.2018. (3) It is the case of Corporate Debtor that as per provisions contained in Section 3 (7), the term Corporate Person does not include a Financial Service Provider. The Corporate Debtor has relied on Section 3 (15), 3(16), 3 (17) and 3 (18) of IBC. It is the further case of Corporate Debtor that the term Corporate Debtor does not include any Financial Service Provider. The Corporate Debtor Company is registered under the Companies Act as well as Registered as a stockbroker with SEBI with Reg. No. INZ000169535. The Corporate Debtor Company is a trading member-cum-clearing member of both the NSE and BSE and it is in the business o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Operational Creditor failed to do so till date. 4. A rejoinder is filed by the Operational Creditor to the objections / reply filed by the Corporate Debtor reiterating the averments made in the Petition, which are as under:- (a) It is alleged the Corporate Debtor in order to avoid CIRP misquoted the definitions given under sections 3 (7), 3 (8), 3 (15), 3 (16), 3 (17) and 3 (18) of the IBC. It is alleged that Corporate Debtor being a stockbroker and clearing member or self-clearing member is having only trading settlement right to participate in the activities of the Financial Market Structures and that the certificate of registration for trading rights and settlement right of trades, issued by the SEBI to Corporate Debtor does not mean Corporate Debtor is a financial service provider. (b) It is further alleged that Corporate Debtor does not hold any of the certificates of registration issued by Regulatory authority for Banking, Insurance and Pension and is also not a Systemically Important Financial Institutions (SIFIs). It is the case of Petitioner that only because Corporate Debtor s business is regulated by SEBI it does not mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Petitioner that first bill dated 30.11.2017 after enactment of GST was raised by Petitioner only after Notification on 13.10.2017 by Ministry of Finance. (h) It is alleged that non-adherence to notification and to term it as a pre-existing dispute is nothing but to deceive the Petitioner. (i) It is averred that condonation of delay beyond 10 days for reply to the demand notice is not allowed under IBCm 2016. (j) The Petitioner further propose the name of Ms Teena Saraswat Pandey as Interim Resolution Professional along with her consent in Form-2 5. The Petitioner/party-in-person filed this Petition under Section 9 of IBC, 2016, alleging the Respondent who is the Corporate debtor committed default of Operational Debt of ₹ 3,36,978.48. Further as per Demand Notice, the Operational Debt allegedly due by Respondent was shown to be ₹ 3,26,807.12. Subsequent to the demand notice, he raised one more Bill for ₹ 10,171.36 and made it ₹ 3,36,978.48, which is said to have been committed default by the Respondent. 6. The case of Operational Creditor/Petitioner herein that he was acting a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emost objection raised by the Respondent that Petition filed under Section 9 is not maintainable against Respondent as it is not a Corporate Person. The main contention of the Learned Counsel, Respondent is not a Corporate Person within the meaning of Section 3 (7) of IBC, 2016 (herein after referred to as Code for brevity sake). The contention of the learned Counsel, Respondent is a financial service provider. It is true, Financial Service Provider does not come under the definition of Corporate Person. 11. The next question falls for consideration, whether Respondent is a financial service provider. Section 3 (17) of the Code defines Financial Provider which is as follows:- 3 (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; 12. The next question whether business carried out by the Respondent falls within the definition of Financial Services as defined under Section 3 (16) of the Code. The Counsel relied on Section 3 (16) (e) (i) which deals of buying, selling or subscribing to a financi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kept outside the purview of the Code. Hon ble NCLAT clearly held that provisions of the Code are not applicable to financial service providers including non-banking financial institutions. In the decision, Hon ble Appellate Tribunal held in M/s Mayfair Capital Private Limited, a financial service provider (non-banking financial Company) against which proceedings under the Code could not be initiated. Hon ble NCLAT dealt with the provisions dealing with financial service provider and held proceedings cannot be initiated against the Company. Thus, Respondent is able to establish that it is financial service provider within the meaning of Section 3 (17) of the Code and as such the same is excluded from the purview of the Code. The Petition is liable to be rejected on this ground. 16. The second contention of the learned Counsel for Respondent that, there was a genuine dispute raised by the Respondent even prior to issue of Demand Notice. Counsel contended, the Respondent requested the Petitioner to get himself registered under GST Act which was a genuine dispute raised by the Respondent after GST Act was brought into existence. The contention of the Counsel, the Ministr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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