The National Company Law Tribunal (NCLT) on Thursday dismissed HDFC Ltd's insolvency plea against RHC Holding, observing that the non-banking financial company does not come under the purview of the IBC Code.
A two-member principal bench headed by NCLT President Justice M. M. Kumar dismissed the plea of HDFC Ltd, which had moved the tribunal to recover an amount of Rs 41 crore.
RHC Holding, promoted by Malvinder Mohan Singh and Shivinder Mohan, had taken a loan of Rs 200 crore from HDFC in April 2016. RHC Holding had paid the interest for the first quarter on time but later started defaulting on it.
According to HDFC, even after adjusting the proceeds from the sales of the pledged share, a substantial amount of Rs 41.09 crore remained due.
To recover the remaining amount, HDFC filed a insolvency plea against RHC Holding before NCLT.
Subsequently, Japanese drug major Daiichi Sankyo had moved NCLT to stay the insolvency proceedings against RHC Holding.
The tribunal on Thursday observed that RHC Holding was a non-banking finance company as per the certificate of registration issued by the banking regulator RBI.
"Respondent company being a non-banking finance company remain outside the purview of the code (Insolvency and Bankrutcy Code)," NCLT said.
With RHC Holding "having excluded from the definition of the corporate person, the present application filed under section 7 of the code against a financial service provider is not maintainable".
Daiichi Sankyo had claimed "a decree to recover money against RHC Holding".
The Delhi High Court has already granted a status quo over sale of assets by RHC Holding.
A tribunal in Singapore had passed the award in favour of Daiichi holding that the Singh brothers had concealed information that Indian company Ranbaxy was facing probe by the US Food and Drug Administration and the Department of Justice, while selling its shares.
The high court on January 31 had upheld the international arbitral award passed in the favour of Daiichi and paved the way for enforcement of the 2016 tribunal award against the brothers who had sold their shares in Ranbaxy to Daiichi in 2008 for Rs 9,576.1 crore. Sun Pharmaceuticals Ltd had later acquired Ranbaxy from Daiichi.
It had, however, said that the award was not enforceable against five minors, who were also shareholders in Ranbaxy, saying they cannot be held guilty of having perpetuated a fraud either themselves or through any agent.
Daiichi had moved the high court seeking direction to the brothers to take steps towards paying its Rs 3,500 crore arbitration award, including depositing the amount. It had also urged the court to attach their assets, which may be used to recover the award.