TaxTMI 
TaxTMI 
TaxTMI 
2022 (12) TMI 892
X X X X Extracts X X X X
X X X X Extracts X X X X
....hich 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 submitted the resolution plan which has been a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 Financial Service Providers And Application To A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....said 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(17), 3(18), 5A, 227 & 239 (2) (zk) of the Code. "3(7) "....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al 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 notified by the Central Government; (5A) "corporate guarantor" means a corporate person who is the surety in a contract of guarantee to a corporate debtor; 22....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t 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 Guarantor which means a corporate person. Corporate person, we have already explained that it would not include a financial service provider. Thus, looking from any angle, Sungrowth having the registration i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sent 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 the legislative animation. The Court cannot derive jurisdiction apart from the Statute. In such eventuality the doctrine of waiver also does not apply..." Similar issue was decided by Hon'ble Supreme Court i....