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The Regulation and compliance procedure for all financial sector entity is highly monitored by the concern regulatory authority in India to build as precautions of not having any financial fraud in the country. To develop and promote the public interest of India, authority comes off with various circular, notification and direction to a financial entity registered with the authority. In process of harmonization of the financial sector of the country, once again the authority comes with a new direction to all the financial entity especially for non-banking financial company to have its nominated counsel in Delhi High Court. Non-Banking Financial Company [NBFC] are those company having valid Certificate of Registration from RBI to operate a financial business in the country. There are various types of NBFC in India doing financial business.
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In light of case M/s J.K Jewelers Vs. Capri Global Capital Ltd, registered in Delhi High Court and its outcome has a mandate the NBFC to have nominated counsel appointed in Delhi High Court. In the stated case, wherein an advance copy of the writ petition was not furnished to the respondent or its nominated counsel and the petitioners contended that the respondent has not appointed a nominated counsel and therefore, no advance copy could be furnished hence the court passed order and instruct regulatory body RBI to issue circular for NBFCs to appoint their respective nominated counsels in the High Court so that henceforth, when a party files a petition in the High Court for seeking interim orders/ directions against any NBFC, advance copies of petitions can be served directly on the said counsel(s) and they are ready with instructions at the stage of admission itself.
Under the order passed by Court, RBI issued notification no. RBI/2017-18/44 DNBR (PD) CC.No.088/03.10.001/2017-18 dated 14th August 2017 instructing the following Direction:-
A council may be nominated so that in case of any future litigation against the NBFCs in the High Court, advance copies of petitions can be served directly on the said counsel(s) to response the same.
The council may be any person enrolled as an Advocate with the High Court, to be nominated by the NBFCs for the purposes of arguing cases before the High Court, on behalf of such nominating NBFC.
Moving ahead as the circular is already issued by the regulatory authority under an order given by a high court of Delhi, now it’s an obligation to all concern NBFC to have nominated counsel appointed as soon as possible. However taking the words of circular, it is advised to take the circular accordingly hence as per the suitable abstract like probability of litigation in future, presence of business activities in Delhi and so on the entity is required to take registry for Nominated Counsel in Delhi High Court and same is not required to intimate to Reserve Bank of India.
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