NCLT Allahabad Orders NBFC to Repay Shareholder Deposit; Oral Arrangement and Balance Sheet Acknowledgment Held Sufficient
Court / Authority
NCLT & NCLAT
Update / Judgement Date
18 Jun 2026
Source
WCP News Bulletin
Author
Manas Yadav — WCP Legal Desk
Reading Time
2 min read
View Count
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.
Full Judgement / Attachment
Full Judgement
Frequently asked questions about NCLT & NCLAT
- What are the NCLT and NCLAT?
- The National Company Law Tribunal (NCLT) and the National Company Law Appellate Tribunal (NCLAT) were constituted on 1 June 2016 under the Companies Act, 2013. The NCLT sits in benches across India, and the NCLAT hears appeals from it, with its principal bench in New Delhi and a bench in Chennai.
- What cases does the NCLT hear?
- The NCLT is the Adjudicating Authority for corporate insolvency under the IBC. It also hears company law matters, including oppression and mismanagement petitions, schemes of merger and demerger, reduction of capital, and class action suits.
- What is the time limit to appeal an NCLT order to the NCLAT?
- Under the Companies Act, the appeal is due within 45 days, extendable by up to 45 days. Under the IBC, it is due within 30 days, extendable by up to 15 days. These outer limits are strictly applied.
- How can I check NCLT case status or orders?
- Case status, cause lists and orders are available on the NCLT website (nclt.gov.in) and the NCLAT website (nclat.nic.in), searchable by case number, party name or bench.
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