TMI Blog2023 (3) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... Nedumpalli Finance Company Limited v. State of Kerala [ 2022 (5) TMI 702 - SUPREME COURT ] , declared the Gujarat Money Lenders Act, 2011 (Gujarat Act) as unconstitutional. The aspect relating to protecting the interest of the borrowers which is sought to be achieved by the State enactments gets subsumed in the provisions of Chapter III-B of the RBI Act. Thereafter Supreme Court adverted to the doctrine of eclipse and observed that while the RBI Act is traceable only to the entries in List-I, the State enactments are traceable only to entries in List-II. Therefore, question of repugnancy under Article 254 of the Constitution would not arise. Nonetheless Supreme Court held that Section 45-Q of the RBI Act confers overriding effect upo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12, W.P.No.25894 of 2010 : Mr. D.Prakash Reddy, learned Senior Counsel representing Mr. Lokirev Preetham Reddy, learned counsel, Mr. L.Ravi Chander, learned Senior Counsel representing Mr. Keshav Bhoopal, learned counsel, Mr. Saurabh Bindal, learned counsel representing Mr. Keshav Bhoopal For the Respondents : Mr. A.Sanjeev Kumar, learned Special Government Pleader attached to the office of learned Additional Advocate General representing State of Telangana., Mr. Govind Reddy, learned Special Counsel representing State of Andhra Pradesh.,Mr. B.Nalin Kumar, learned counsel representing Reserve Bank of India (RBI). COMMON ORDER: PER THE HON BLE THE CHIEF JUSTICE UJJAL BHUYAN This order will dispose of Writ Petition Nos.25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012 was pending before the Union Parliament. 5. This was assailed by the NBFCs before the Supreme Court by filing Special Leave Petitions which was admitted into civil appeals, being Civil Appeal No.4244 of 2019 and batch. 6. In the meanwhile, the Andhra Pradesh Reorganization Act, 2014 came into effect from 02.06.2014 bifurcating the composite State of Andhra Pradesh into the States of Telangana and Andhra Pradesh. Resultantly, the Andhra Pradesh Micro Finance Institutions (Regulation and Money Lending) Act, 2011 (was adopted by the State of Telangana whereafter a new enactment being Telangana Micro Finance Institutions (Regulation of Money Lending) Act, 2011 came to be enacted. 7. In Civil Appeal No.4244 of 2019 and batch, Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it petitions was filed before the Kerala High Court questioning the validity of the Kerala legislation. A learned Single Judge of the High Court of Kerala had dismissed the batch of writ petitions, which order was confirmed by the division bench of the Kerala High Court. It was thereafter that NBFCs operating in the State of Kerala filed civil appeals before the Supreme Court. 10. The Bombay Money Lenders Act, 1946 which was applicable to the State of Gujarat was invoked by the Registrar against NBFCs operating in the State of Gujarat in the year 2009. Challenging such action, the NBFCs operating in the State of Gujarat approached the High Court of Gujarat. During pendency of the writ petitions before the Gujarat High Court, the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, what was considered by the Supreme Court was whether after enactment of a law by the Parliament for incorporation and regulation of NBFCs, such NBFCs would continue to be regulated by the State enactments also on the ground that those may fall within the definition of the expression money lenders under the State enactments. After a thorough examination of all relevant aspects of the matter including Chapter III-B of the RBI Act, Supreme Court held as follows: 6.19 Once it is found that Chapter III-B of the RBI Act provides a supervisory role for the RBI to oversee the functioning of NBFCs, from the time of their birth (by way of registration) till the time of their commercial death (by way of winding up), all activities of NBFCs au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals filed by the State of Gujarat against the judgment of the Gujarat High Court were dismissed. 11.2. While pronouncing the above judgment, an application for impleadment was filed before the Supreme Court by a person claiming to have lodged a criminal complaint against an NBFC in the State of Tamil Nadu. Supreme Court clarified that though it had not examined provisions of the Tamil Nadu Pawn Brokers Act, 1943 and the Tamil Nadu Money Lenders Act, 1957, the principles of law laid down in Nedumpalli Finance Company Limited (supra) would equally apply to these State enactments also. 12. In the hearing today, we have examined the scheme and provisions of the Andhra Pradesh Micro Finance Institutions (Regulation of Money Lending) Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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