2019 (7) TMI 638

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nking financial institution rendering 'financial service' is out of the purview of the I&B Code. 3. Learned counsel appearing on behalf of the appellant submitted that the Respondent is not a 'financial service provider'. According to the appellant the intent and the purpose of the legislature is to specifically carve out a set of institutions that provide set of identified financial services. The exclusion cannot be beyond what has been contemplated by the I&B Code. The I&B Code is applicable to all entities other than those which are specifically engaged in business of providing "financial services" listed in Section 3(16). Reliance has been placed on the definition of the 'financial service provider' covered under Section 3(17) to suggest that it must be engaged in the business 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 ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....8) defines 'corporate debtor' means a corporate person who owes a debt to any person. Section 3(7) defines 'corporate person' which means:- Section 3-Definitions-In this Code, unless the context otherwise requires,- "(7) "corporate person" means a company as defined in clause (20) of Section 2 of the Companies Act, 2013 (18 of 2013), a limited liability partnership, as defined in clause (n) of sub-section (1) of section 2 of the Limited Liability Partnership Act, 2008 (6 of 2009), or any other person incorporated with limited liability under any law for the time being in force but shall not include any financial service provider." From the aforesaid provisions it is clear that 'corporate person' donot include any Financial Service Provider. 8. "Financial Service providers" is defined in Section 3(17) means:- Section 3-Definitions- In this Code, unless the context otherwise requires,- "(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....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sits NBFCs accepting deposits in terms of authorisation from RBI NO b. Safeguarding and administering assets consisting of financial products, belonging to another person, or agreeing to do so Debenture Trustees No c. Effecting contracts of insurance Insurance Companies as per IRDA No d. Offering, managing or agreeing to manage assets consisting of financial products belonging to another person Asset Management Companies and Depository Participants No 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 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 financia....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tate 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 than its own; (ii) the acquisition of shares, stock, bonds, debentures or securities issued by a Government or local authority or other marketable securities of a like nature; (iii)Letting or delivering of any goods to a hirer under a hire-purchase....