NCLT Allahabad Orders NBFC to Repay Shareholder Deposit; Oral Arrangement and Balance Sheet Acknowledgment Held Sufficient

Background

The National Company Law Tribunal, Allahabad Bench (Prayagraj) has directed Shivam Traders and Hire Purchase Private Limited, a non-banking financial company (NBFC), to repay deposits made by a shareholder, holding that the absence of a written agreement does not defeat the statutory obligation under the Reserve Bank of India Act, 1934. The Applicant, a shareholder of the Respondent NBFC, contended that she had advanced a sum of ₹25.89 lakh under an oral arrangement carrying 9% interest, repayable at the end of the financial year. Despite repeated demand notices in April and June 2020 and a complaint to the RBI, no repayment was made. The Respondent disputed the claim on grounds of limitation, alleged inconsistency in amounts, and argued that the transaction was a long-term loan repayable only after nine years.

Findings and Order

Rejecting the objections, the NCLT held that:

● The petition was within limitation, as the liability was continuously acknowledged in the Respondent’s audited financial statements, constituting acknowledgment under Section 18 of the Limitation Act, 1963, coupled with the COVID-19 limitation extension granted by the Supreme Court.

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

● Section 45QA does not mandate a written agreement; oral arrangements are enforceable, particularly where receipt of funds and liability are admitted in statutory disclosures.

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

The Tribunal exercised powers under Section 45QA(2) and directed repayment of the deposit, with the exact amount to be reconciled between the parties. The ruling reinforces that NBFCs remain strictly bound to honour repayment obligations, even in shareholder-related or informally documented transactions.