NCLT dismisses plea seeking insolvency proceedings against Religare Enterprises

economictimes.indiatimes.com:

National Company Law Tribunal (NCLT) on Tuesday dismissed a plea to initiate insolvency proceedings against Religare Enterprises Ltd observing that it was a financial service provider and does not come under the ambit of the Insolvency & Bankruptcy Code (IBC). A principal bench headed by NCLT President Justice Ramalingam Sudhakar and Atul Chaturvedi held that the petition filed by Ligare Aviation Ltd against Religare Enterprises was «not maintainable» and does not fall under the definition of «Corporate Debtor», which means a corporate person who owes a debt to any person.

«We are of the considered view that the corporate debtor (Religare Enterprises) as alleged does not come within the meaning of corporate person and therefore, we are unable to accept the prayer of the applicant to initiate the CIRP against the Corporate Debtor,» said NCLT. Ligare Aviation has approached NCLT against Religare Enterprises, which is a corporate guarantor of the principal borrower Auriga Marketing Services, which had defaulted to make a payment of Rs 35.55 crore.

Along with 14.25 per cent interest, the amount totalled to Rs 74.20 crore as on January 27, 2023. However, Religare Enterprises contended before NCLT during the proceedings that it is a financial service provider and is excluded from the definition of a corporate person of IBC.

Hence insolvency proceedings cannot be initiated against it. To support its contention, counsel representing Religare Enterprises had placed the Certificate of Registration, granted to it by the Reserve Bank of India the status of «Non-Banking Financial Institution».