TaxTMI 
TaxTMI 
2022 (12) TMI 892
X X X X Extracts X X X X
X X X X Extracts X X X X
....against the order dated 04.09.2019, by which an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') by the State Bank of India (Financial Creditor) against the Sungrowth Share and Stocks Limited (Corporate Guarantor) on account of a default committed by the Corporate Debtor (M/s Adhunik Alloys & Power Limited) in paying the financial debt of Rs. 63,04,53,226/- has been admitted by the Adjudicating Authority (National Company Law Tribunal, Kolkata Bench, Kolkata). 2. In brief, M/s Adhunik Alloys & Power Limited) is already in Corporate Insolvency Resolution Process (CIRP) vide order dated 23.08.2017 of the Adjudicating Authority. M/s SPV Bhagwati Power & Steel Ltd., Resolution Applicant has subm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dent that the cancellation of the certificate was prospective in nature. 5. Counsel for the Appellant has argued that the day on which the application under Section 7 was filed i.e. 08.06.2018, the registration of Sungrowth as NBFC was in operation, therefore, the application under Section 7 of the Code was not maintainable. He has referred to Section 3(7), 3(8), 3(17), 3(18) and Section 5A of the Code to refer to the definitions of the Corporate Person, Corporate Debtor, Financial service provider, Financial sector regulator and Corporate Guarantor. He has also submitted that proceedings against the Financial service provider could have been initiated only in terms of Insolvency and Bankruptcy (Insolvency And Liquidation Proceedings Of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... case of the Appellant is not covered by the aforesaid decision. 7. However, in rebuttal, Counsel for the Appellant has submitted that though financial services were provided in terms of Section 3(16)(b), yet the fact remains that Sungrowth was issued registration by the RBI which was in operation on 08.07.2018 when the application under Section 7 of the Code was filed, therefore, initiation of the CIRP proceedings at the instance of Respondent before the Adjudicating Authority on that date was not maintainable. 8. We have heard Counsel for the parties and perused the record with their able assistance. 9. In order to appreciate the rival contentions, it would be relevant to refer to the definitions of Section 3(7), 3(8), 3(16), 3(1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ancial product; or (i) selling, providing, or issuing stored value or payment instruments or providing payment services; 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; 3(18) "financial sector regulator" means an authority or body constituted under any law for the time being in force to regulate services or transactions of financial sector and includes the Reserve Bank of India, the Securities and Exchange Board of India, the Insurance Regulatory and Development Authority of India, the Pension Fund Regulatory Authority and such other regulatory authorities as may be no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....order to become corporate debtor entity has to be a corporate person but a financial service provider is not a corporate person. The financial service provider is defined in Section 3(17) which says that any person to whom registration is granted by a financial sector regulator. Section 3(18) defines financial sector regulator which includes the Reserve Bank of India. Financial service is defined under Section 3(16) which according to the decision of this court in the case of Housing Development Finance Corporation Ltd. (Supra) is inclusive and not limited to one which is provided in the said provision. 11. Admittedly, the present proceedings have been initiated against Sungrowth as a corporate guarantor. Section 5A defines Corporate Gua....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ch an issue can be raised even in appeal also. "Para 9. Indisputably, it is a settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior Court, and if the Court passes a decree having no jurisdiction over the matter, it would amount to nullity as the matter goes to the roots of the cause. Such an issue can be raised at any stage of the proceedings. The finding of a Court or Tribunal becomes irrelevant and unenforceable/ inexecutable once the forum is found to have no jurisdiction. Similarly, if a Court/Tribunal inherently lacks jurisdiction, acquiescence of party equally should not be permitted to perpetuate and perpetrate, defeating t....