Does a Stock Broking Company fall within the scope of IBC? NCLAT to decide

The National Company Law Appellate Tribunal (NCLAT) has issued notice in an appeal that asserts that a Stock Broking Company does not qualify as a "Corporate Person" in terms of Section 3(7) of the Insolvency & Bankruptcy Code and is thus outside its purview. .Suspended Director of Simandar Broking Ltd has argued that the company is a Financial Service Provider under Section 3(16) IBC and any claim by its client could not be considered as financial debt under Section 5(8) IBC. .A Bench of Justice Jarat Kumar Jain, Member (Judicial) and Dr. Ashok Kumar Mishra, Member (Technical) also directed that no Committee of Creditors be formed in the insolvency proceedings against Simandhar Broking Ltd, if not constituted already. .The appeal was directed against an order passed by the National Company Law Tribunal, Ahmedabad Bench. .The insolvency plea was filed under Section 7 of the IBC by the client of Simandar Broking Ltd, against his trading of shares in the Futures & Options Segment of the National Stock Exchange..As per the Appellant, NCLT's view was contrary to the judicial precedents. .It is stated that NCLT, Hyderabad Bench, in Praveen Kumar Mundra V. CIL Securities Ltd, has already held that a Stoking Broking Company is a financial service provider as it is regulated by SEBI. .The firm was explained that all the sale of securities is undertaken as per the KYC Form and the Agreement of Trade executed between the client and the broker. .Any sale against the constant non-payment of carry forward charges including interest and the subsequent losses caused could not be admitted as financial debt under the IBC, it is argued. .Senior Advocate Krishnendu Datta with Advocates Hemant Sethi, Advocate Gaurav H Sethi, Abhinav Tyagi appeared for the Appellant. .Advocates Abhishek Swaroop, Kiran Shah, Noman Singh Bagga appeared for the Respondent..The matter would be heard next on July 5. .Read the order: