NCLT Allahabad Holds Inter-Corporate Deposits Repayable Under RBI Act, Orders NBFC to Refund ₹18.5 Crore

Background

The National Company Law Tribunal, Allahabad Bench (Prayagraj) has held that inter-corporate deposits (ICDs) fall within the definition of “deposit” under Section 45I(bb) of the Reserve Bank of India Act, 1934, and are therefore repayable under Section 45QA, even if they are not classified as “public deposits”.

The petition was filed by Madhusudan Motors Private Limited, an authorised Maruti Suzuki dealer, against Shivam Traders and Hire Purchase Private Limited, a non-deposit-accepting NBFC. The parties are family-controlled entities, with disputes also pending between rival family factions before the NCLT and civil courts.

The Petitioner claimed it had advanced ₹18.54 crore to the Respondent as deposits under an oral arrangement carrying 10% interest, repayable at the end of the financial year. Despite repeated demand notices and complaints to the RBI, the Respondent failed to repay the amount, prompting the invocation of Section 45QA.

The NBFC argued that the funds were not deposits but a long-term inter-corporate loan governed by an agreement dated April 1, 2019, with a nine-year tenure ending in March 2028. It further contended that ICDs are excluded from “public deposits” under RBI Master Directions and therefore fall outside Section 45QA.

Order

Rejecting the defence, the Tribunal held that:

● The definition of “deposit” under Section 45I(bb) is broad and inclusive, covering loans and ICDs unless expressly excluded.

● Exclusion of ICDs from “public deposits” under RBI Master Directions is only for regulatory purposes and does not override the RBI Act.

● The alleged agreement was unenforceable, having been executed by a common director without any Board or Section 186 Companies Act approval.

The NCLT directed repayment of the deposit amount, with the exact sum to be reconciled between the parties. The decision reinforces that NBFCs cannot avoid repayment obligations by recharacterising deposits as inter-corporate loans