A principal bench headed by NCLT President Justice Ramalingam Sudhakar and Atul Chaturvedi held that the petition filed by Ligare Aviation Ltd towards Religare Enterprises was “not maintainable” and doesn’t fall beneath the definition of “Company Debtor”, which suggests a company one who owes a debt to any individual.
“We’re of the thought of view that the company debtor (Religare Enterprises) as alleged doesn’t come throughout the that means of company individual and subsequently, we’re unable to just accept the prayer of the applicant to provoke the CIRP towards the Company Debtor,” stated NCLT.
Ligare Aviation has approached NCLT towards Religare Enterprises, which is a company guarantor of the principal borrower Auriga Advertising and marketing Providers, which had defaulted to make a cost of Rs 35.55 crore.
Together with 14.25 per cent curiosity, the quantity totalled to Rs 74.20 crore as on January 27, 2023.
Nonetheless, Religare Enterprises contended earlier than NCLT throughout the proceedings that it’s a monetary service supplier and is excluded from the definition of a company individual of IBC. Therefore insolvency proceedings can’t be initiated towards it. To assist its rivalry, counsel representing Religare Enterprises had positioned the Certificates of Registration, granted to it by the Reserve Financial institution of India the standing of “Non-Banking Monetary Establishment”. The counsel additional said that RBI alone is entitled to provoke CIRP (Company Insolvency Decision Proceedings) towards all NBFCs which have an asset measurement of greater than Rs 500 crore and no different entity/firm is legally or statutorily competent to institute any petition towards NBFCs.
This was opposed by Ligare Aviation contending that Religare was a Core Funding Firm (CIC), not an NBFC. The annual report of Religare reveals that its standing modified within the yr 2014 from NBFC to Core Funding Firm.
Nonetheless, rejecting it NCLT stated it was of the thought of view that Religare was not a company individual and it cannot settle for the prayer.
The NCLT additionally stated: “We make it clear that the dismissal of the petition isn’t on advantage, however solely as a result of the part 7 software isn’t maintainable towards the company debtor. This order shall, subsequently, not prejudice the suitable of the monetary creditor to provoke applicable steps beneath another legislation and earlier than the suitable discussion board.”