TaxTMI 
TaxTMI 
2022 (1) TMI 1430
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....No. 4258 of 2019. 2. Facts of the Case: 2.1. The Appellant has created fixed deposits with the Corporate Debtor to manage their funds. 2.2. On November 29, 2019, the Corporate Insolvency Resolution Process was initiated against the Corporate Debtor by RBI under Rule 5 of Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 ("FSP Rules") through Company Petition No. 4258 of 2019. 2.3. The Adjudicating Authority vide its Order Dt. December 3, 2019, admitted the said petition against the Corporate Debtor. Accordingly, Respondent No. 1, Mr. R. Submramaniakumar, was confirmed as the Administrator and was further directed to perform all functions of Resolution Professional and complete the Corporate Insolvency Resolution Process of the Corporate Debtor according to IBC. 2.4. In the resolution process, a Resolution Plan was submitted by Respondent No. 3, Piramal Capital & Housing Finance Limited and was subsequently approved by Respondent No. 2 (CoC). Accordingly, Respondent No. 1 filed an Interlocutory Application No. 449 of 2021, among other things, under Section 30(6) and S....
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..... 2.11. The Resolution Plan is in contravention of the National Housing Bank Act, 1987, as it fails to make full Payment of the admitted claim of the Appellant. 3. Grounds of Appeal The Appellant filed the present Appeal before the Appellate Tribunal against the impugned Order passed by the Adjudicating Authority and the subsequent conduct of Respondent No. 2, failing to secure the interest of the Appellant as a deposit holder and secured financial creditor of the Corporate Debtor. The grounds of challenge are as follows: a) That the Resolution Plan is in contravention of the NHB Act as it fails to make full Payment of the admitted claim of the Appellant. b) The Adjudicating Authority ought to have rejected the Resolution Plan as it contravenes Section 29A (4) (a) of the NHB Act. c) That Adjudicating Authority ought to have rejected the Resolution Plan as it a contravention of Section 36(A) of the NHB Act. d) That Adjudicating Authority ought to have rejected the Resolution Plan as it a contravention of Section 12 (vi) and Section 18 of NHB Directions 2010. e) That Adjudicating Authority did not consider Section 36 of the NHB Ac....
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....bute an amount to the Appellant from their monthly salary. m) The Adjudicating Authority ought to have considered that the average age of an officer from the flying branch at the time of commission is 21 years. Officers undergo rigorous training and sacrifice the comforts of civilian life due to their postings far from home, away from the comforts and conveniences of city life, whilst exposing themselves to high risk at a young age. Every Air Warrior, irrespective of his rank, is ready to make the ultimate sacrifice for the defence of the Indian skies. This sacrifice alone ensures that the Indian Air Force lives up to its motto, 'Nabha Sparsham Deeptham'; in Sanskrit, it means 'Touch the Sky with Glory.' n) The Adjudicating Authority did not consider that in the case of loss of life of the Air Force Warriors, it is of utmost importance that the financial support is provided to the deceased's family. Payment of death claims must therefore be made quickly without delay. Consequently, it is imperative that deposits placed by the Appellant with the Corporate Debtor be repaid promptly on the death of air force personnel and maturity of deposits. As ....
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...., under the terms thereof or not at all. iv) Section 36 of the NHB Act provides that the provisions thereof shall have effect notwithstanding anything inconsistent contained in any other law. It is trite law that where two legislations contain non-obstante clauses. Still, they operate in different fields. Therefore, earlier legislation yielded to the latter one. (b) The Resolution Plan, as well as the distribution mechanism, are discriminatory and arbitrary. i) Under Clause 2.5.5 of the resolution plan, the Resolution Applicant had provided an additional amount to be paid to the Fixed Deposit holders, over and above the amount allocated to them by the CoC. However, this clause was rendered otiose by the CoC in as much as; the COC has arbitrarily and whimsically withdrawn the alleged benefit to the Appellants as is evident from a perusal of the minutes of 18th CoC, wherein it has been recorded that this additional amount shall not be over and above the resolution plan amount. ii) Further, the CoC has created an artificial and arbitrary distinction between similarly placed fixed deposit holders by categorising them into different groups and allocat....
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....nutes @Para (iii) - Page 213 of the Appeal] (d) The Corporate Debtor being an FSP must be treated on a footing different from a regular Corporate Debtor. i) The legislature, in its wisdom, notified the provisions for insolvency resolution of FSPs separately and distinctly from the Insolvency of a regular Corporate Debtor. The Report of the subcommittee on the Insolvency of FSPs provides that the rationale for excluding FSPs from the purview of IBC is that the financial firms differ from other firms, inter -alia, for the reason that they handle large amounts of consumers money. Therefore, they are considered systemically important as their failure might disrupt the financial system. The sub-committee also noted that the Housing Finance Companies must comply with the directions and instructions issued by the National Housing Bank. (Report of the Sub-Committee of the Insolvency Law Committee for Notification of Financial Service Providers under Section 227 of the IBC, 2016.) ii) Therefore, because the Corporate Debtor is an FSP, the Insolvency of which poses systemic risks to the market, the scrutiny entailed in appreciation of the Resolution Plan must be st....
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....ty/special treatment under any other law in force. It has clarified that neither the NHB Act nor the NHB directions contain any provision that would entitle the Appellant to any priority in Payment. The purported rights of the Appellant to receive payments in lieu of the deposits under the pre-dated NHB Act and the NHB Directions will have to yield to the distribution mechanism for Payment to creditors under the Code due to the overriding effect of section 238 of the Code. 5.5. The respondent further submits that the resolution plan is under the Code and the Allied regulations. Therefore, the Appellant cannot bypass the distribution mechanism under the Code and see preferential treatment. In any event, the primary grievance of the Appellant is not against the resolution plan but again, the distribution mechanism 6. Written submissions on behalf of Respondent No. 2 The Appellants have filed the present Appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016 ("Code/IBC") aggrieved by the impugned Order dated June 07, 2021 ("Impugned Order") passed by the Learned AA/NCLT in IA. No. 449 of 2021 in Company Petition (IB) No. 4258 of 2019 approving the Resolution Plan....
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....sitors have to be paid in full (i) There is no guarantee of full Payment, especially when the NBFC or HFC is under Insolvency, to FD Holders under the NHB Act, NHB Directions or the RBI Act. The RBI has also acknowledged this stand in its replies filed before the Hon'ble Delhi High Court and Hon'ble Bombay High Court under writ petitions filed by FD Holders. (ii) The RBI Act and NHB Act merely provide that the license of an HFC or NBFC may be cancelled if the deposit holders are not paid, or the company court may be approached. However, even in such cases, decisions are taken only after giving the HFC or NBFC a chance of being heard. (iii) Further, even the 'Banning of Unregulated Deposit Schemes Act', 2019 ("BUDSA") enacted on July 19, 2019, inter-alia to protect the interest of depositors under Chapter V dealing with "Restitution of Depositors" provides as under: "12. Save as otherwise provided in the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 or the Insolvency and Bankruptcy Code, 2016, any amount due to depositors from a deposit taker shall be paid in priority over all ....
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....ted Authorized Representative ("AR") of their choice as per the express provisions of Section 21(6A) of the Code. The FD Holders through the AR have participated and voted in the entire CIRP. (iii) The Insolvency Law Committee Report in this regard has also highlighted that; "The FSP Sub - Committee has also clarified that the amounts deposited by the depositors with an FSP would be treated as financial debt, and such depositors would be classified as financial creditors and be treated accordingly." (iv) It is evident from the legislative intent that the Appellants as FD Holders are to be treated as Financial Creditors and, therefore, cannot claim any preferential treatment under the Code or any other legislation. E. There is no provision under the Code providing any preferential treatment to the Appellants. (v) The Appellants are Financial Creditors of DHFL; any right to recovery from DHFL must be as per the framework and mechanism provided under the Code. Once the Resolution Plan has been approved, Payment to the Appellants who are FD Holders will be made per the approved Resolution Plan. (vi) The AR being aware of the same ad....
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....nancial Creditors to seek preferential treatment. (ii) It is well established that for payments to creditors under the Code, what is fair and equitable must be determined within the Code's framework, under the CoC's commercial wisdom, subject to certain minimum guidelines to be observed, i.e. minimum liquidation value must be given to creditors. [Refer: CoC of Essar Steel v Satish Kumar (2020) 8 SCC 531]. (iii) All dissenting Financial Creditors are entitled to the liquidation value, and the Resolution Plan provides them with the liquidation value. Accordingly, the Resolution Plan is fully compliant with the Code, and hence the Impugned Order deserves no interference. (iv) It is also well established that the commercial wisdom of the CoC is not amenable to judicial review on any ground. [Refer; K. Shashidhar v. Indian Overseas Bank [(2019) 12 SCC 150] Paragraph 52), Kalparaj Dharamshi & Anr v. Kotak Investment Advisors Ltd. [Civil Appeal No. 2943-2944 of 2020] (paragraphs 154, 155); Jaypee Kensington Boulevard Apartments Welfare Association & Ore. vs NBCC (India) Ltd. & Ors. [Civil Appeal No. 3395 of 2020] order dated March 24, 2021] (v) ....
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.... the reconsideration of the distribution under the Resolution Plan to increase the FD Holders' payout to that which is being granted to assenting Financial Creditors. The FD Holders themselves voted against the resolution, and 89.19% votes of the CoC rejected the same. (ii) Appellants cannot now seek to challenge the approved Resolution Plan, which has been passed by the CoC of which the FD Holders are a part. (iii) The Hon'ble Supreme Court in Pratap Technocrats (P) Ltd. & Ors. v. Monitoring Committee of Reliance Infratel Limited & Anr. @ Para 31, 39 has held that the Adjudicating Authority and the Appellate Tribunal have been endowed with limited jurisdiction as specified in the Code and not to act as a court of equity or exercise plenary powers and that there is no residual equity-based jurisdiction with the Adjudicating Authority or this Appellate Tribunal. The Code itself circumscribes the jurisdiction of this Appellate Tribunal to review the resolution plan. (iv) In the present case, the Learned Adjudicating Authority has already found that the Resolution Plan is compliant with the Code. The Appellant has made no case that the Resolution Pla....
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....rs as per the provisions of NHB Act, which was applicable at that time. FD holders relied upon the AAA credit rating from CARE and made the fixed deposits with DHFL. 10.4. The reliance placed on Section 238 of the I&B Code to prevail over the NHB Act was misplaced. The provision of the I&B Code has been given overriding effect only in case of any inconsistency between the provisions I&B Code and any other legislation. However, it cannot be pressed into service in the present case where the provisions of two legislations can be harmoniously construed. 10.5. On perusal of the minutes of the 18th meeting of CoC, it appears that by the distribution mechanism envisaged, the FD Holders are given the biggest haircut. Out of the admitted claims amount of Rs. Five thousand three hundred seventy-five crores, only Rs. 1243 Crores (i.e. 23.08%) has been directed to be paid to the fixed deposit holders. This is against the 40% (minimum) of the admitted claims agreed to be paid to the secured financial creditors with a tremendously huge risk appetite. 11. Submission on behalf of the Appellants:- 11.1. Appellants contended that Resolution Plan does not pass muster under Section 30(2)(....
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....vernance concerns of DHFL under the Code, which would ensure maximisation of assets in a time-bound manner. Only the RBI can decide whether to initiate proceedings under the Code or the RBI Act. 12.2. It is further submitted that there is no guarantee of full Payment, especially when the NBFC or HFC is under Insolvency, to FD Holders under the NHB Act, NHB Directions or the RBI Act. So, there is no provision in either the RBI Act or the NHB Act, which mandates that the depositors have to be paid in full. 12.3. It is also submitted by Respondent No. 2 that the provisions of the Code will override the NHB Act and the RBI Act under the non-obstante clause in Section 238 of the Code. It is also well settled that when two special statutes contain non-obstante clauses, the later statute will prevail over the earlier one. 12.4. Respondent No. 2 also contended that the FD Holders, including the Appellants in the present Appeal, are Financial Creditors of DHFL and have been treated accordingly under the provisions of the Code. The Appellants are Financial Creditors of DHFL, and therefore, any right to recovery from DHFL must be as per the framework and mechanism provided under I&B ....
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.... allocation of funds to the Appellant by a majority of 89.49% vote share. 14.3. The Appellant Air Force group insurance Society further pleaded that the Appellant, unlike the other civil insurance companies, provides insurance cover to provide insurance, to Air Force Personnel through individual contributions by all Air Force personnel, past and present and their dependents by giving pre-and post retirement insurance cover and lump-sum benefits on retirement/release/on the disability from the Indian Air Force. However, the Adjudicating Authority failed to consider that in the case of loss of life of the Air Force warriors, it is of utmost importance that the financial support is provided to the deceased family. 14.4. Learned Counsel for the Appellant submits that Rule 5(d) of Financial Service Providers Rules, 2019 mandates that the Resolution Plan include a statement explaining how the Resolution Plan satisfies or intends to satisfy the requirements of engaging in the business of the FSP. Resolution Plan fails to include a message explaining how it plans to meet the needs of engaging in the business of an FSP, especially concerning the repayment of deposits. Further, the pla....
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....d to be lacking bona fides, as well as being contrary to public policy. It has been proposed with the oblique purpose of avoiding the mandate of Section 45-QA(1) of the RBI Act." 14.6. The Appellants contended that the Hon'ble Supreme Court in the case mentioned above has held that Sections 45Q and 45QA, Reserve Bank of India Act, 1934, overrides Sections 391 and 394 of the Companies Act, 1956. Hon'ble Supreme Court has held that Chapter III-B of RBI Act inserted by Act No. 55 of 1963 w.e.f. December 1, 1964, being a later enactment, clearly has to prevail over the Companies Act, 1956. Hon'ble Supreme Court has further held that there is no justification for lessening the scope of the applicability of the non-obstante clause in Section 45Q of the RBI Act. 14.7. The overriding effect extends to any other law for the time being in force and to any instrument having effect by such law. The reasons for giving such categorical overriding effect are evident from the objects and reasons given in the amendment Act viz. the magnitude of the exploitations of the poor sections of the society, leading to utter destruction of innumerable families was the underlying impetus to ....
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....nstrument having effect by virtue of any such law. [45-QA. Power of Company Law Board to order repayment of deposit.-(1) Every deposit accepted by a non-banking financial company, unless renewed, shall be repaid in accordance with the terms and conditions of such deposit. (2) Where a non-banking financial company has failed to repay any deposit or part thereof in accordance with the terms and conditions of such deposit, the Company Law Board constituted under Section 10-E of the Companies Act, 1956 (1 of 1956) may, if it is satisfied, either on its own motion or on an application of the depositor, that it is necessary so to do to safeguard the interests of the Company, the depositors or in the public interest, direct, by Order, the non-banking financial Company to make repayment of such deposit or part thereof forthwith or within such time and subject to such conditions as may be specified in the Order: Provided that the Company Law Board may, before making any order under this sub-section, give a reasonable opportunity of being heard to the non-banking financial Company and the other persons interested in the matter. [45-MB. Power of Bank to pro....
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....section (1) may provide for- (a) reduction of the pay and allowances of the chief executive officer, managing director, chairman or any officer in the senior management of the non-banking financial Company; (b) cancellation of all or some of the shares of the non-banking financial Company held by the chief executive officer, managing director, chairman or any officer in the senior management of the non-banking financial Company or their relatives; (c) sale of any of the assets of the non-banking financial Company. (3) The chief executive officer, managing director, chairman or any officer in the senior management of the non-banking financial Company whose pay and allowances are reduced or the shareholders whose shares are cancelled under the Scheme shall not be entitled to any compensation.] [45-MC. Power of Bank to file winding-up petition.-(1) The Bank, on being satisfied that a non-banking financial company- (a) is unable to pay its debt; or (b) has by virtue of the provisions of Section 45-IA become disqualified to carry on the business of a non-banking financial institution; or (c) has been prohibited by t....
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.... provision in the IBC that provides to the contrary, and therefore, there is no overlap in the requirements for Section 238 of the IBC to kick in. In any case, the Court would first endeavour to give a harmonious construction to the seemingly inconsistent provisions (MCGM v. Abhilash Lal, Civil Appeal No. 6530 of 2019 dated 15.11.2019 (p. 838, para 45 at p. 892)] 14.15. The Appellant contended that the Money of the Appellants was deposited in trust with the Respondent. The FD. Holders have entrusted their money with DHFL, which belongs to the FD Holders, which are in the custody and possession of DHFL. The amounts held in trust for the benefit of the Appellants cannot be illegally misappropriated. They cannot be subjected to the moratorium or the resolution process (Rule 10, FSP Rules). A deposit by the depositor is not a sum lent to the Company but is a sum deposited with the Company to be held in trust until maturity. Therefore, it is not a loan in the strict sense of the term. (Deepak Insulated Cable v. UOI, (at p. 1288, para 9 at p. 1289 of compilation); Vijay Mills Co v. State of Gujarat. 14.16. In response to the argument of the Appellant, the Learned Senior Counsel for....
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...., FD holders failed to show that the money deposited by them was held in trust by DHFL or that the amounts held by DHFL were not assets of DHFL. Thus Rule 10 of the 'FSP Rules' is inapplicable about the amounts deposited by FD Holders. 14.23. Further, the Appellants' reliance on the Orders passed by the NCLT in the IA 1104/2020 filed by the National Housing Bank ("NHB") is misplaced. The Appellant contends that Section 16B of the NHB Act creates a statutory trust favouring the NHB for the amount advanced by NHB to FSP, i.e., DHFL, as Section 16B states that the amounts are being held in trust. 14.24. Further, Section 16B of the NHB Act is completely inapplicable to FD holders. Therefore, the Appellants have made a baseless claim. 14.25. Respondent No. 3 represented the amounts deposited by the FD Holders in DHFL are shown as liabilities in the balance sheet of DHFL, and the FD Holders are Financial Creditors of DHFL and have been treated accordingly. Thus, the bald, unsupported and misleading contention of the Appellants that the amount payable to FD Holders are held in trust by DHFL is entirely fictional and ought not to be entertained. 14.26. It is pertine....
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....the affairs of the housing finance institution are not being or are not likely to be conducted in a manner detrimental to the interest of its present or future depositors; (c) that the general character of the management or the proposed management of the housing finance institution shall not be prejudicial to the public interest or the interests of its depositors; (d) that the housing finance institution has adequate capital structure and earning prospects; (e) that the public interest shall be served by the grant of certificate of registration to the housing finance institution to commence or to carry on the business in India; (f) that the grant of certificate of registration shall not be prejudicial to the operation and growth of the housing finance sector of the country; and (g) any other condition, fulfilment of which in the opinion of the [Reserve Bank], shall be necessary to ensure that the commencement of or carrying on the business in India by a housing finance institution shall not be prejudicial to the public interest or in the interests of the depositors: [Provided that the Reserve Bank may, wherever it considers nece....
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....of such condition: Provided further that before making any order of cancellation of certificate of registration, such institution shall be given a reasonable opportunity of being heard. (7) A housing finance institution aggrieved by the Order or rejection of application for registration or cancellation of certificate of registration may prefer an appeal, within a period of thirty days from the date on which such Order of rejection or cancellation is communicated to it, to the Central Government and the decision of the Central Government where an appeal has been preferred to it, or of the [Reserve Bank] where no appeal has been preferred, shall be final: Provided that before making any order of rejection of Appeal, such institution shall be given a reasonable opportunity of being heard. Explanation.-For the purposes of this Section,- (I) "net owned fund" means- (a) the aggregate of the paid-up equity capital and free reserves as disclosed in the latest balance sheet of the housing finance institution after deducting therefrom- (i) accumulated balance of loss; (ii) deferred revenue expenditure; and (iii)....
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....r, such housing finance institution to make repayment of such deposit or part thereof forthwith or within such time and subject to such conditions as may be specified in the Order: Provided that the authorised officer may, before making any order under this sub-section, give a reasonable opportunity of being heard to the housing finance institution and the other persons interested in the matter." 14.27. Further, it is necessary to point out that RBI Act and the NHB Act merely provide that the licence of a Housing Finance Corporation and Non-Banking Finance Company may be cancelled if the deposit holders are not paid. Such a decision can be taken only after giving the concern HFC or NBFC and the opportunity to present its case. None of the legislation provides that FD. Holders are required to be paid in full. Hence the Appellant's contention is based on an incorrect interpretation of the law. 14.28. The Learned Senior Counsel for the Appellant represented that the amount deposited by FD Holders were held in trust by DHFL. In response to the above contentions, the Ld. Sr. Counsel for CoC submits that Rule 10 of the Insolvency and Bankruptcy (Insolvency and Liquidat....
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....ection 391 of the Companies Act cannot be entertained unless it is in conformity with the provisions of Section 45-QA of the RBI Act. 50. We may briefly notice here the judgments relied on by the learned counsel for the Appellant in support of the submission that the non obstante clause in Section 45-Q of the RBI Act will not have an overriding effect over Sections 391-394 of the Companies Act. Reliance was placed on Aswini Kumar Ghose [AIR 1952 SC 369]; Madhav Rao Jivaji Rao Scindia [(1971) 1 SCC 85]; A.G. Varadarajulu [(1998) 4 SCC 231]; ICICI Bank Ltd. [(2006) 10 SCC 452]; RS Raghunath [(1992) 1 SCC 335 : 1992 SCC (L&S) 286 : (1992) 19 ATC 507] and JIK Industries Ltd. [(2012) 3 SCC 255 : (2012) 2 SCC (Civ) 82 : (2012) 2 SCC (Cri) 125] The said cases undoubtedly reiterate the settled law on the manner in which a particular non obstante clause ought to be interpreted. In Aswini Kumar Ghose [AIR 1952 SC 369], this Court held that: "16. ... a non obstante clause [must be construed strictly and] the Court must try to find the extent to which the legislature had intended to give one provision overriding effect over another provision." (A.G. Varadarajulu case [(1998) ....
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.... Paragraphs 56 to 59 Hon'ble Supreme Court has observed that; "56. ICICI Bank Counsel has argued that money is fungible therefore unless money has gone out from JAL for repayment, it can't be said as money deposited by JIL is the money payable to JIL homebuyers. 57. No doubt money is fungible, but obligation to repay is not fungible, therefore when money is deposited or clawed back to repay it to the creditor, the money being fungible and there being an obligation for repayment, it can no more be considered as money owned by the debtor. Though JAL is per se not a debtor to the Homebuyers, when money has come on behalf of the debtor in relation to a debt obligation or for discharge of an obligation, the person deposited it towards that obligation cannot subsequently say that he is the owner of the money, therefore entitled for return of it. 58. If trust concept is examined, we will know that trust is a relationship where property/money held by one party for the benefit of another party. Trustee holds the property/money for the benefit of the trust beneficiaries. Trustee is under fiduciary duty to ensure that the property of the owner is maintained ....
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....31 has reinforced the position that the COC is the key decision-maker in the rehabilitation of Corporate Debtors. For the approval of the Resolution Plan, the Committee of Creditors is to take a business decision based on ground realities by a majority, which binds all the stakeholders, including dissenting creditors. The Adjudicating Authority cannot interfere on merits with the commercial decision taken by the Committee of Creditors. The limited judicial review available is to see that the Committee of Creditors has taken into account the fact that the Corporate Debtor needs to keep going as a going concern during the Insolvency Resolution Process; it needs to maximise the value of its assets; and that the interest of all stakeholders including Operational Creditors has been taken care of. 14.40. Therefore, it is the commercial wisdom of the requisite majority of the Committee of Creditors which is to negotiate and accept the Resolution Plan, which may involve differential Payment in different classes of creditors, together with negotiating with the prospective Resolution Applicant for better or different terms which may also involve differences in the distribution of amounts ....
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....be treated accordingly". 14.44. The Public Deposit Holders stand on an equal footing with other Financial Creditors of DHFL. Suppose relief, as sought by the Appellant, seeking a refund in repayment of fixed deposits, are granted; in that case, similar claims regarding repayment of dues will be made on behalf of NCD holders and other creditors, which would be detrimental to the corporate insolvency process of DHFL. Even otherwise, any monies raised during the Resolution Process is towards keeping the business alive as a going concern and not for out of turn or pre-resolution process claims, that too outside the Scheme of the IBC. Moreover, if payments were to be made to fixed deposit holders whose fixed deposits have matured, it would result in a situation where matured fixed deposit holders would obtain a preference as a special dispensation, as opposed to fixed deposit holders, whose fixed deposits have not matured, thereby resulting in the differential an unequivocal treatment within similarly situated creditors. Therefore no special dispensation ought to be granted outside the mechanism/process envisaged under the IBC, which provides for the commercial wisdom of the COC to r....
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....ework. An analysis of the framework of the statute and regulations provides an insight into the dynamic and comprehensive nature of the statute. Upholding the procedural design and sanctity of the process is critical to its functioning. The interpretative task of the Adjudicating Authority, Appellate Authority, and even this Court, must be cognizant of, and allied with that objective. The UNCITRAL Guide has echoed this position by noting the interplay between the procedural design of the insolvency law and the corresponding institutional infrastructure by observing: "27. While the institutional framework is not discussed in any detail in the Legislative Guide, some of the issues are touched upon below. Notwithstanding the variety of substantive issues that must be resolved, insolvency laws are highly procedural in nature. The design of the procedural rules plays a critical role in determining how roles are to be allocated between the various participants, in particular in terms of decision-making. To the extent that the insolvency law places considerable responsibility upon the institutional infrastructure to make key decisions, it is essential that infrastructure be suffi....
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.... are not paid. Such a decision can be taken only after allowing the concerned HFC or NBFC to present its case. None of the legislation provides that FD holders are required to be paid in full. Therefore, it is not the case of the Appellant's that RBI is not empowered to act under the RBI Act or the FSP Rules. The Appellants acknowledges that statutory mandate made available to the RBI under the RBI Act and the FSP Rules. However, the Appellant wishes to advise the Regulator as to the course of action that ought to have been followed by the Regulator. This is legally impermissible, misconceived and untenable. 14.50. In the instant case, the RBI, in the exercise of its administrative discretion under Section 45-IE of the RBI Act, superseded the board of DHFL and appointed administrator. Accordingly, it decided to initiate the resolution proceedings with respect to DHFL under the IBC and not the RBI Act. Appellant's contention is mainly about the obligation of the administrator and the successor in the interest of the DHFL to ensure full repayment of deposit to have FD holders under the RBI and NHB act. It is further contended that there is no inconsistency between the prov....