New Delhi: The National Company Law Appellate Tribunal (NCLAT) Wednesday dismissed a petition by HDFC to initiate insolvency proceedings against RHC Holding, an entity promoted by former Ranbaxy and fortis promoters Malvinder Mohan Singh and Shivinder Mohan Singh. A two-member bench headed by Chairman Justice S J Mukhopadhaya upheld the order of the principal bench of the National Company Law Tribunal (NCLT) which had rejected HDFC's plea. The NCLAT said it found "no merits" in HDFC's petition and said that non-bank financial company lenders come under the purview of the Reserve Bank of India (RBI) and should seek remedies from the central bank, not the bankruptcy court.
"We hold that the application under Section 7 of I&B Code is not maintainable. Therefore, the Adjudicating Authority rightly rejected the application. We find no merit in the appeal, it is accordingly dismissed," said. The appellate tribunal said that under the definition provided under section 45 IA of the Reserve Bank of India Act, RHC Holding is a non-banking financial company (NBFC). "Therefore, it is clear that the Respondent (RHC Holding), a non-banking financial institution is carrying on business of financial institution and thereby it being financial service provider do not come within the meaning of Corporate Person/Corporate Debtor," said NCLAT.