NCLT Allahabad: NBFC Must Repay Shareholder Deposits Despite Absence of Written Agreement; Limitation Saved by Acknowledgment in Accounts

Background

The National Company Law Tribunal, Allahabad Bench (Prayagraj) has held that a non-banking financial company (NBFC) cannot evade its statutory obligation to repay deposits merely because no formal written agreement exists, particularly where the liability is consistently acknowledged in audited financial statements.The Petitioner, a shareholder of the Respondent NBFC, claimed that it had advanced ₹1.10 crore under an oral arrangement carrying 9% annual interest, repayable at the end of the financial year. Despite repeated demand notices and a complaint to the RBI, the Respondent failed to repay the amount. The NBFC disputed the claim, contending that the transaction was a long-term loan repayable only after nine years, that no default had occurred, and that the petition was barred by limitation.

Findings and Order

Rejecting the Respondent’s objections, the Tribunal held that:

● Limitation was not a bar, as the liability was continuously acknowledged in the Respondent’s audited balance sheets, constituting acknowledgment under Section 18 of the Limitation Act, 1963, and the COVID-19 limitation extension applied.

● Under Section 45I(bb) of the RBI Act, any receipt of money by an NBFC by way of loan or otherwise constitutes a “deposit”, unless expressly excluded.

● A written agreement is not mandatory for invoking Section 45QA; oral arrangements are legally enforceable, particularly when the receipt of funds is admitted.

● Family disputes and internal understandings cannot override an NBFC’s statutory duty to repay deposits.

The NCLT directed the Respondent NBFC to repay the deposit amount, with the final sum to be reconciled between the parties. The decision reinforces that NBFCs remain bound by the RBI Act to honour repayment obligations, regardless of documentation gaps or shareholder relationships.