In Brief
The Supreme Court held that Non-Banking Financial Companies (NBFCs) registered under the RBI Act cannot be regulated by State Money Lenders Acts. Chapter III-B of the RBI Act is a complete code governing NBFCs from registration to winding up. Although State Money Lenders Acts (Kerala 1958, Gujarat 2011) are validly traceable to State legislative power, they cannot be applied to NBFCs because Parliament has exclusive authority over financial corporations under Union List Entry 43. Once RBI enacted comprehensive regulation of NBFCs, State laws occupy an eclipsed field. The Court dismissed Kerala's appeals and allowed Gujarat's appeals, with RBI's legislative scheme preventing dual regulation.
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