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The National Company Law Tribunal today rejected the insolvency petition filed against RHC Holding on the grounds that insolvency code does not allow for such petitions to be filed against non-banking financial companies.
The plea, filed by HDFC Ltd. to recover Rs 41 crore, said there was a default even after they raised a demand for the pending dues. RHC Holding is promoted by Singh Brothers—Malvinder Mohan Singh and Shivinder Mohan Singh.
HDFC argued that once the default is established and the proposed insolvency resolution officer is facing no disciplinary proceedings, their petitions must be admitted and insolvency proceedings must begin.
Earlier, Daiichi Sankyo Pvt. Ltd. had filed an intervention application in the case opposing HDFC’s petition. Daiichi argued that there is an ongoing legal proceeding against RHC Holding in the Delhi High Court which has passed an order of status quo on the assets of RHC Holding.
Daiichi had moved the high court seeking enforcement of its Rs 3,500 crore arbitration award.
RHC Holding argued that they are a financial service provider and do not qualify as a corporate debtor against whom insolvency proceedings can be initiated as per the provisions of the Insolvency and Bankruptcy Code. The company also produced a copy of their Memorandum of Procedure in the tribunal along with the certificate issued by the Reserve Bank of India recogninsing it as a Non Deposit Accepting Non Banking Financial Company (NDSI-NBFC).
While accepting the arguments made by RHC Holding, the tribunal dismissed the petition seeking insolvency proceedings against the company. The tribunal, however, made it clear that it is not making any claims on the merit of the controversy or the right of HDFC’s claim in front of any other forum.
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