PQ Finvest Ltd. is a Non-Banking Finance Company (NBFC) registered with the Reserve Bank of India. The total assets of the Company are exceeding ₹500 crores. The Company has committed the default in making payment to Kar

The Ministry of Corporate Affairs ("MCA") vide its Notification dated 15th November 2019 had notified the Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 ("Rules"). The Rules provide a framework for the insolvency and liquidation proceedings of systematically important Financial Service Providers ("FSPs") excluding banks. Section 227 of the Insolvency and Bankruptcy Code, 2016 ("Code") enables the Central Government to notify, in consultation with the financial sector regulators, FSPs or categories of FSPs for the purpose of insolvency and liquidation proceedings, in such manner as may be prescribed. The Rules, therefore, will apply to such FSPs or categories of FSPs as will be notified under Section 227 of the Code. Insolvency and Bankruptcy (Insolvency and Liquidation Proceedings of Financial Service Providers and Application to Adjudicating Authority) Rules, 2019 applicable to Non-banking Finance Companies (including housing finance companies) ("NBFCs") as a class of FSPs, having asset size of Rupees Five Hundred Crore or more, as per last audited balance sheet. The aforesaid Rules has designated the Reserve Bank of India ("RBI") as the appropriate regulator in this regard. An insolvency process i.e. CIRP can initiated against NBFCs only on an application by the Reserve Bank of India (RBI) before the NCLT. In the light of the aforesaid provisions, Karan can't initiate Corporate Insolvency Resolution Process against PQ Finvest Ltd., a Non-Banking Finance Company whose asset size is exceeding the threshold limit of 500 crores.