# In the matter of Nitin Pannalal Shah & Ors. vs. Vipul H Raja & Ors.

> NCLAT judgment dated 2023-09-11. Citation: TCN-2023-NCLAT-00213. These are two appeals raising common questions of law, heard together and decided by a common…

- **Court:** NCLAT
- **Order date:** 11 Sept 2023
- **Citation:** TCN-2023-NCLAT-00213
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/nitin-pannalal-shah-ors-vs-vipul-h-raja-ors-5ac4428f

## Summary

### Background

These are two appeals raising common questions of law, heard together and decided by a common order. Company Appeal (AT) (Insolvency) No. 379 of 2021 was filed against the order dated 06.04.2021 passed by the NCLT, Ahmedabad Bench, admitting an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against Simandhar Broking Limited. The appellant is a suspended director of the corporate debtor. Company Appeal (AT) (Insolvency) No. 749 of 2022 was filed by National Stock Exchange of India Limited challenging the order dated 25.11.2021 passed by NCLT, New Delhi, admitting an application under Section 7 against Astitva Capital Market Private Limited. The appellant was not a party to the proceedings but claimed to be an aggrieved person.

## Facts

Nitin Pannalal Shah, the suspended director of Simandhar Broking Ltd., filed an appeal against the admission of a Section 7 application against the company. Vipul H Raja, the respondent, had opened a trading account with Simandhar Broking Ltd. and entered into an agreement on 21.12.2017. Raja incurred losses and filed a complaint with the Investor Grievance Resolution Panel (IGRP), claiming non-issuance of documents, non-receipt of funds, and unauthorized trading. The IGRP rejected the claim. Raja then filed a Section 7 application, which was admitted by the NCLT. The National Stock Exchange of India Limited (NSE) filed an appeal against the admission of a Section 7 application against Astitva Capital Market Private Limited. NSE had issued a show cause notice to Hemant

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## Issues and analysis

### Issue 1: Whether a stock broker registered with SEBI and a trading member of NSE can be considered a …

**Ratio:** Section 3(16) of the IBC defines 'financial service' to include rendering or agreeing to

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**Reasoning:** The NCLAT reasoned that the Memorandum of Association of both Simandhar Broking Ltd. and

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**Interpretation:** The interpretation of 'financial service' and 'financial service provider'

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**Application:** The NCLAT applied the definitions of 'financial service' and 'financial service

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## Parties

- **Judges:** Ashok Bh…; Barun M…
- **Appellants:** Nitin Pannalal…
- **Respondents:** Simandhar Broking…; Vipul H…

## Timeline

- **2017-12-21 — Agreement…**: Vipul H Raja entered into an…
- **2018-01-01 — Trading Sta…**: Vipul H Raja started trading…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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