TaxTMI 
TaxTMI 
2025 (12) TMI 1556
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....t although the Respondent was registered as financial service provider by the RBI, however, the RBI itself on 16.01.2020 issued an order by which the Respondent was directed not to increase the size of balance sheet and the company prohibited from accessing public funds in any form until further notice as well as lending. 5. It is submitted that in view of the order of the RBI actually the Respondent is not in the business of financial service provider and the protection which is envisaged in the provisions of the Code cannot be held to be applicable in the facts of present case. 6. Ld. Counsel for the Appellant has placed reliance on the judgment of Hon'ble Andhra Pradesh High Court being writ petition no. 3667 of 2025 Karvy Consultants Ltd. Vs. Asstt. Commr. Of Cus. And C. Ex. Decided on 08.08.2005 in support of his submissions. 7. We have considered the submissions of the Appellant and perused the record. 8. Before we proceed further to consider the submission of the Appellant it is relevant to notice the reasons given by the Adjudicating Authority in rejecting the application. The Adjudicating Authority apart from referring the judgment of this Tribunal in para 10 a....
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....horization from a financial sector regulator and is engaged in the business of providing the services as listed in Section 3(16) shall fall within the definition of Financial Service Provider, and consequently, will be outside the purview of Corporate Insolvency Resolution Process. At this juncture, it is pertinent to mention that according to the decision of the Hon'ble NCLAT in the case of Housing Development Finance Corporation Ltd. v/s RHC Holding Pvt. Ltd. [2019] ibclaw.in 102 NCLAT the definition of 'financial services' as defined in Section 3(16) of I&B Code is not limited to the 9 activities as shown at Clause (a) to (i) of Section 3(16). The aforesaid Clauses (a) to (i) are inclusive which means there are other services which come within the meaning of 'financial services'. 17. Further, the Central Government, pursuant to its powers under Section 227 of IBC, had notified Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 ('FSP Rules'). Rule 5(a) of the FSP Rules, 2019 provides that - "(a) Initiation of Corporate Insolvency Resol....
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....e company and submit an action plan to improve liquidity within 5 working days. Yours sincerely, Sd/- (Suresh Parewa) Deputy General Manager" 13. From the facts which has been brought on record, the Appellant has sanctioned a term loan on 09.07.2018 to the Respondent and According to the case set up by the Appellant, the Respondent started committing in default in repayment since 05.01.2019. The order passed by the RBI issued on 16.01.2020 which can be read as well at best to prohibiting the Respondent to give any new loan and should not make any investment other than in Govt securities. The prohibition of new lending on the Respondent shall have no bearing on the transaction which was entered between the Appellant and the Respondent. 14. Ld. Counsel for the Appellant has also submitted that on 14.10.2025 the RBI has already issued public notice informing that registration of the Respondent has been cancelled with effect from 14.10.2025. The registration has been cancelled on 14.10.2025 clearly means that the Respondent was registered financial service provider till the date the registration is cancelled. 15. The submissions which has been raised....
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....he petitioner revealed that they had obtained a non- banking financial certificate issued by the Reserve Bank of India as deposit taking company on 14-12-1998, that the total amount collected by the petitioner as depository participant worked out to Rs. 5,74,09,882/- during the period 16-7-2001 to 15-8-2002, and that the service tax payable thereon amounted to Rs. 28,70,494/- 18. Though the counter-affidavit places reliance solely on the certificate of registration issued to the petitioner by the Reserve Bank of India as a "non-banking financial company", the show cause notice dated 27-12-2004 indicates that the petitioners were providing services as a depository participant. Whether or not, during the relevant. period 16-7-2001 in 15-8-2002, the petitioner, as its principal business, was receiving deposits or lending money, are matters which are required to be examined by the 2nd respondent on the basis of information gathered by it and made available to the petitioner as also the explanation and material furnished, in reply to the show cause notice, by the petitioner. Suffice to state that the petitioner cannot be held to be a "non-banking financial company" solely on th....