$~33 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 4760/2020 KRISHNA CAPFIN LTD .....Petitioner Through: Mr. Vaibhav Sethi, Mr. Sikhyat Oberoi, Mr. Ravi Sharma, Mr. Shivam Prakash, Mr. Nishita Gupta & Mr.

Arihant Jain, Advs. (8932998839)

versus UNION OF INDIA & ANR. .....Respondents Through: Mr. Ramesh Babu, Ms. Manisha Singh, Ms. Tanya Chowdhary, Ms. Nisha Sharma, Mr. Rohan Srivastava, Advs. for RBI (9971671294)

Mr. Bhagvan Swarup Shukla, CGSC with Mr. Sarvan Kumar, Mr. Praveen Gupta & Mr. Mukesh Kumar Pandey, Advs. (+91 8920-144863)

CORAM:

JUSTICE PRATHIBA M. SINGH JUSTICE MADHU JAIN

O R D E R

% 15.01.2026

1. This hearing has been done through hybrid mode.

2. The challenge in the present writ petition is for setting aside the impugned order dated 30^th April, 2020 passed by the Appellate Authority under Section 45-IA of the Reserve Bank of India Act, 1934 (hereinafter “RBI Act”). Vide the impugned order, the RBI’s order dated 18th October, 2018 cancelling the Petitioner’s Certificate of Registration as a Non-Banking Financial Company (hereinafter “NBFC”) was upheld.

3. The case of the Petitioner is that it had filed an application on 8^th July, 1997 under Section 45-IA of the RBI Act seeking Certificate of Registration. The RBI had issued a notification dated 20^th April, 1999 by which the “Net Owned Fund” (hereinafter “NoF”) of an NBFC which wanted to commence its business on or after 20^th April, 1999, was increased from Rs. 25 lakh to Rs.2 crores. However, NBFCs which were already registered with RBI or whose applications seeking the Certificate of Registration were filed prior to

20^th April, 1999, were exempted from application of the said notification.

4. The Petitioner was issued the Certificate of Registration by the RBI on 18th September, 2001. Thereafter, a revised regulatory framework came into existence on 10^th November, 2014 as per which the RBI had directed that the requirement of minimum NoF of Rs. 2 crore was made applicable to all NBFCs. Further, in view of the new regulatory framework, vide notification dated 27^th March, 2015, RBI mandated all the NBFCs, including the existing NBFCs, to have the NoF of Rs. 2 crores. As per the said notification, existing NBFCs would be permitted to continue functioning subject to achieving NoF of Rs. 1 crore before 1st April, 2016 and Rs. 2 crores before 1st April, 2017. 5. The case of the Petitioner is that it managed to increase its NoF, and by 31^st March, 2017, it had achieved approximately Rs. 97 lakh. In view of the regulatory changes, the RBI sent a communication on 17^th May, 2017 to the Petitioner, directing the Petitioner to achieve NoF of Rs. 2 crores as soon as possible. It is stated that the Petitioner’s NoF had increased to approximately Rs. 1.22 crore. Further communications dated 23rd June, 2017, 9th November, 2017, and 20th February, 2018 were received by the Petitioner from the RBI directing to achieve Rs. 2 crore NoF, as mandated, as soon as possible. The NoF of the Petitioner further continued to increase and by 31st March, 2018 it is stated to have achieved approximately Rs. 1.55 crores.

6. Finally, on 7^th May, 2018, a Show Cause Notice (hereinafter “SCN”) was issued by the RBI as to why the Petitioner’s registration ought not be cancelled for not achieving the NoF of Rs. 2 crores, in terms of the revised regulatory framework and notification dated 27th March, 2017.

7. A response was filed to the SCN on 21^st May, 2018. On 29^th May, 2018, prior to adjudication of the SCN, the Petitioner informed the RBI that it had achieved the NoF of Rs. 2 crore. However, a few months later, on 18^th October, 2018, the Petitioner’s Certificate of Registration was cancelled by the RBI. The Appellate Authority was then approached by the Petitioner challenging the said order of RBI, which dismissed the said appeal vide the impugned order dated 30^th April 2020.

8. Ld. Counsel for the Petitioner relies upon orders passed in similar matters by coordinate Benches as also ld. Single Judges of