Nithya Hire Purchase & Leasing Pvt vs The State Of Kerala

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT

THE HONOURABLE MR.JUSTICE SUSHRUT ARVIND DHARMADHIKARI

&

THE HONOURABLE MR. JUSTICE SYAM KUMAR V.M.

FRIDAY, THE 21ST DAY OF NOVEMBER 2025 / 30TH KARTHIKA, 1947

WP(C) NO. 22842 OF 2008

PETITIONER/S:

1 NITHYA HIRE PURCHASE & LEASING PVT NSS UNION BUILDING, VELLOORKUNNAM , MARKET PO.,, MUVATTUPUZHA-686673, REP. BY ITS MANAGING, DIRECTOR, PRAMOD KUMAR M.B.

2 AISWARYA HIRE PURCHASE AND LEASING PVT. LTD., MARIYIL COMPLEX, NEAR MELA AUDITORIUM, VELLOORKUNNAM, MARKET PO., MUVATTUPUZHA-686673, REP. BY ITS MANAGING DIRECTOR, K.J.KURIAN.

3 CEETEN MOTOR FINANCE PVT.LTD. KACHERITHAZHAM, MUVATTUPUZHA-686661, REP. BY ITSMANAGING DIRECTOR,, KJ.JOHN.

4 NELAD AUTO FINANCE PVT.LTD NELAD PO., MUVATTUPUZHA-686721, REP. BY ITS, MANAGING DIRECTOR, V.P.PAULOSE.

BY ADV SHRI.JOSE JOSEPH

RESPONDENT/S:

1 THE STATE OF KERALA TO GOVERNMENT, SECRETARIAT, THIRUVANANTHAPURAM

2 SECRETARY TO GOVERNMENT OF KERALA TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM.

3 COMMISSIONER OF COMMERCIAL TAXES WP(C) NO. 22842 OF 2008

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PUBLIC OFFICE BUILDING, THIRUVANANTHAPURAM.

4 INNTELLIGENCE OFFICER IB O/O.DEPUTY COMMISSIONER(INT.), COMMERCIAL TAXES, EDAPPALLY, COCHIN-24.

5 DEPUTY GENERAL MANAGER RESERVE BANK OF INDIA, DEPARTMENT OF, NON-BANKING SUPERVISION, THIRUVANANTHAPURAM.

BY SUNIL KUMAR KURIAKOSE, GP

THIS WRIT PETITION (CIVIL) HAVING RESERVED ON 01.08.2025, THE COURT ON 21.11.2025 DELIVERED THE FOLLOWING: WP(C) NO. 22842 OF 2008

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JUDGMENT

Sushrut Arvind Dharmadhikari, J.

The present writ petition under Article 226 of the Constitution of

India has been filed by the petitioners, praying for the following reliefs:

"(i) declare that the State of Kerala has no authority or jurisdiction to insist the petitioners to take license under the Kerala Money Lenders Act, 1958 to carry on their business,

(ii) declare that provisions of the Kerala Money Lenders Act, 1958 is not applicable to Non-Banking Financial Companies like the petitioner companies incorporated under the provisions of the Indian Companies Act and registered with the Reserve Bank of India in terms of the provisions of the Reserve Bank of India Act, 1934, and is controlled and governed by the provisions of the RBI Act,

(iii) declare that it is beyond the competence of the State Legislature to impose unreasonable restrictions on the petitioners to carry on its business invoking the provisions under the Kerala Money Lenders Act, 1958,

(iv) issue a writ of mandamus or any other appropriate writ, order or direction restraining respondents 1 to 4 from insisting the petitioners to take license under the Kerala Money Lenders Act, 1958 for carrying on their business,

(v) call for the records of the case leading to Ext P11 and quash it by the issue of a writ of certiorari or any other appropriate writ or order, WP(C) NO. 22842 OF 2008

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(vi) Call for the records of the leading to Exts. P12, P13, P14 & P16, P17, P18 & P19 notices and quash the same by the issue of a writ of certiorari or any other appropriate writ or order,

(vii) pass such other orders, directions or writs as may be prayed for and this Hon'ble Court may deem fit and proper in the facts and circumstances of the case."

2. The brief facts of the case are that the petitioners are Non-

Banking Financial Companies (NBFCs) registered with the Reserve Bank

of India under Section 45-IA of the Reserve Bank of India Act. The

petitioners are engaged in money lending in the State of Kerala. The case

of the petitioners is that, being NBFCs registered under Section 45-IA of

the RBI Act, they do not fall within the meaning of 'person' as defined

under Section 2(7) of the Kerala Money Lenders Act, 1958.

2.1 The contention of the petitioners is that, even if they fall

within the main definition of 'person', they are covered by the exception

clause (f) of Section 2(7) of the Money Lenders Act, which excludes

institutions established by or under an Act of Parliament or the

Legislature of a State from the purview of the Act.

3. The question for consideration before this Court is whether WP(C) NO. 22842 OF 2008

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Non-Banking Financial Companies (for short, 'NBFCs'), regulated by the Reserve

Bank of India under the provisions of Chapter III-B of the Reserve Bank of India

Act, 1934 (hereinafter referred to as the 'RBI Act'), could also be regulated by

State enactments such as the Kerala Money Lenders Act, 1958.

4. The learned counsel for the petitioners contended that the

aforesaid issue was the subject matter in Nedumpilli Finance Company

Limited v. State of Kerala and others1, wherein the Apex Court concluded

as follows:

"11 In view of the above, we are of the considered opinion that the Kerala Act and the Gujarat Act will have no application to NBFCs registered under the RBI Act and regulated by RBI. Therefore, all the appeals filed by NBFCs against the judgment of the Kerala High Court are allowed. Likewise the appeals filed by the State of Gujarat against the judgment of the Gujarat high Court are dismissed.

11.1 As a consequence, Transfer Petition (Crl.) No.359 of 2015, shall also stand allowed and the First Information Report filed against the officer of the NBFC for violation of the provisions of the Kerala Act shall stand quashed.

11.2 An application for impleadment has been filed by one Mr. Davidson

1 2022 INSC 545 [Civil Appeal No.5233/2012 judgment dated 10.05.2022] WP(C) NO. 22842 OF 2008

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Dharmaraj in Civil Appeal No.5238 of 2012, claiming that he has lodged a criminal complaint against the appellant and its officers in the Civil Appeal, namely M/s. Muthoot Finance Private Limited, for alleged offences under the Indian Penal Code, but relying upon the provisions of the Tamil Nadu Pawn Brokers Act and the rules framed there under and that any decision rendered in the appeals arising out of the decisions of the Kerala and Gujarat High Courts may have an impact on his criminal complaint. Though we have not examined the provisions of the Tamil Nadu Pawn Brokers Act and the Tamil Nadu Money Lenders Act, the principles of law laid down herein, would apply equally to these State enactments also. Therefore, the application for impleadment namely I.A. No.2 of 2015 is dismissed."

4.1 Further, the Apex Court opined that the Kerala Act has no

application to NBFCs registered under the RBI Act and regulated by the

RBI, and had allowed the appeals filed by the NBFCs against the judgment

of the Kerala High Court. Therefore, in view of the aforesaid, the issue in

the present case is also covered by the judgment of the Apex Court, and

the writ petition may be disposed of in terms of the judgment of the Apex

Court in Nedumpilli Finance Company Limited (supra).

5. The learned Government Pleader has no objection if the writ

petition is disposed of in terms of the judgment in Nedumpilli Finance WP(C) NO. 22842 OF 2008

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Company Limited (supra).

6. Heard the learned Counsel for the parties and perused the

records.

7. In the light of the decision rendered by the Apex Court in

Nedumpilli Finance Company Limited (supra), we dispose of the present

writ petition also in terms of Nedumpilli Finance Company Limited

(supra), which would be applicable mutatis mutandis to the facts and

circumstances of this petition.

The writ petition stands disposed of. All Interlocutory Applications

as regards interim matters stand closed.

Sd/-

SUSHRUT ARVIND DHARMADHIKARI JUDGE

Sd/-

SYAM KUMAR V.M. JUDGE jjj