# In the matter of Reliance Capital Limited CP (IB) - 1231-MB-2021

> NCLT judgment dated 2021-12-06. Citation: TCN-2021-NCLT-00254. The Reserve Bank of India (RBI), as the Appropriate Regulator, filed an application under…

- **Court:** NCLT
- **Order date:** 6 Dec 2021
- **Citation:** TCN-2021-NCLT-00254
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/reliance-capital-limited-cp-ib-1231-mb-2021-78b3f57e

## Summary

### Background

The Reserve Bank of India (RBI), as the Appropriate Regulator, filed an application under Section 227 read with Section 239(2)(zk) of the Insolvency and Bankruptcy Code, 2016, to initiate the Corporate Insolvency Resolution Process (CIRP) against Reliance Capital Limited (RCL), a Financial Service Provider (FSP). The application was based on RCL's defaults in meeting its payment obligations to creditors. The RBI had superseded the Board of Directors of RCL on 29.11.2021, exercising powers under Section 45-IE (1) of the Reserve Bank of India Act, 1934, and appointed Mr. Nageswara Rao Y as the Administrator.

## Facts

The Reserve Bank of India (RBI) filed a petition to initiate Corporate Insolvency Resolution Process (CIRP) against Reliance Capital Limited (RCL), a Financial Service Provider (FSP), due to defaults in payment obligations. RBI superseded RCL's Board of Directors on 2021-11-29 under Section 45-IE (1) of the Reserve Bank of India Act, 1934. Yes Bank Limited (YBL) informed RBI on 2021-12-02 about defaults amounting to Rs 1417,80,51,298, including principal and interest on secured non-convertible debentures (NCDs). The default date was stated as 2019-10-13. RBI appointed Mr. Nageswara Rao Y as the Administrator. The total debt exceeded the minimum limit of Rupees one crore under Section 4 of the Code. The petition was filed on 2021-12-02. RCL's account was classified as a

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## Issues and analysis

### Issue 1: Whether the application filed by the Reserve Bank of India under Section 227 read with Section …

**Ratio:** Section 227 of the Insolvency and Bankruptcy Code, 2016, read with Section 239(2)(zk),

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**Reasoning:** The court noted that the RBI, as the appropriate regulator, filed the application. The

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**Interpretation:** Section 227 and related rules provide a specific mechanism for initiating CIRP

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**Application:** The RBI, being the appropriate regulator, filed the application under the

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## Parties

- **Judges:** P.N. Des…; K.K. V…
- **Appellants:** Reserve Bank of…
- **Respondents:** Reliance Capital…

## Timeline

- **1934-01-01 — Reserve Bank of India…**: Reference to the Reserve Bank of India Act, 1934, specifically Section 45-IE (1), which…
- **2016-01-01 — Insolvency and…**: Reference to the Insolvency and Bankruptcy Code, 2016, specifically Section 227 and…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 239(2) — Power to make rules](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-239)

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