In the matter of An application under section 7 of the Insolvency and Bankruptcy Code, 2016 read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016.

And In the matter of Ligare Aviation Ltd Registered Office :

G-16, Marina Arcade, Connaught Circus, New Delhi-110001 …Financial Creditor Versus Religare Enterprises Ltd Registered Office at :

1407, 14th Floor, Chiranjiv Tower, 43, Nehru Place, New Delhi-110019 ......Corporate Debtor Order pronounced on: 11.07.2023 Coram:

Chief Justice (Retd.) Ramalingam Sudhakar : Hon’ble President Shri Atul Chaturvedi : Hon’ble Member (Technical)

Appearances :

For the Financial Creditor : Mr. Sudhir K. Makkar, Sr. Adv.

Mr. Zeyaul Haque, Adv Ms. Sweta Singh, Adv.

For the Corporate Debtor : Mr. Sunil Fernandis, Adv Mr.SiddharthSharma,Adv Mr. Varun Chopra, Adv Ms. Diksha Dadu, Adv ___________________________________________________________________________________

ORDER

Per: Atul Chaturvedi, Member (Technical)

1. This is a Company Application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by Ligare Aviation Ltd., seeking to initiate Corporate Insolvency Resolution Process (“CIRP”) against Religare Enterprises who is the corporate guarantor of the principal borrower Auriga Marketing Services Private limited.

2. The present petition was filed on 21.03.2023 before this Adjudicating Authority on the ground that the principal borrower has defaulted to make a payment of a sum of Rs.35,55,00,000 (Rupees Thirty Five Crores Fifty Five Lakhs Only ) at an interest of 14.25% p.a. totaling to Rs. 74,20,31,453/-(Seventy Four Crores Twenty Lakhs Thirty One Thousand Four Hundred and Fifty Three Only) as on 27.01.2023 and the corporate debtor being the corporate guarantor of the principal borrower, thus the financial creditor is invoking insolvency against the corporate guarantor.

3. The Learned Senior Counsel for the financial Creditor submitted that a Memorandum of undertaking dated 22.09.2011 was entered into ___________________________________________________________________________________

between the principal borrower and the financial creditor for an unsecured demand loan of Rs. 50 crores (Rupees Fifty Crores Only) at an interest rate of 14.25%p.a and this MOU was signed upon the instruction of the corporate debtor.

4. Before proceeding into the merit of the case, the learned counsel for the corporate debtor took a plea that prima facie the petition filed by the petitioner is not maintainable under Section 7 of IBC, 2016 as it is contended that the corporate debtor is a financial service provider and is excluded from the definition of Corporate person as defined Section 3(7) of IBC, 2016, thus insolvency proceeding cannot be initiated against the corporate debtor.

5. To support its contention the counsel has placed before this Adjudicating Authority the Certificate of Registration under Reserve Bank of India, Act, 1934 which has been granted to the corporate debtor giving it the status of “Non Banking Financial Institution”. For reference the certificate has been reproduced below:

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6. It is further stated that RBI alone is entitled to initiate CIRP against all NBFCs that have an asset size of more than 500 crores and no other entity/ company is legally or statutorily competent to institute any petition against NBFCs. Further by way of certificate, RBI recognizes the respondent company as an NBFC, thereby permitting to commence business of an NBFC without accepting deposits subject to the conditions. It is further stated that the perusal of above certificate also reveal that RBI has itself registered the respondent company as Core Investment Company.

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7. In rebuttal, the Learned Senior Counsel for the applicant submitted that the corporate debtor is not a financial service provider and had not furnished