THE BOMBAY High Court on Thursday held that the National Spot Exchange Limited (NSEL) is not a financial establishment and hence, the notifications passed by the state under the Maharashtra Protection of Interest of Depositors Act (MPID) to attach its assets, stand quashed.
The company had approached the high court against the state government’s notifications to attach assets under the Act claiming that NSEL was a commodities exchange for trading between buyers and sellers and not a deposit-taking entity.
The company had submitted documents and invoked bylaws of NSEL to claim that it did not fall within the definition of a financial establishment and hence, the Act and the resulting attachment could not be invoked against it.
The state had attached properties of 63 Moons Technologies Limited, which was previously known as Financial Technologies (India) Limited, after a complaint was filed by the Mumbai Police Economic Offences Wing (EOW) on allegations of defrauding around 13,000 investors by inducing on the NSEL platform to the tune of Rs 5,600 crore. The EOW had also arrested FTIL chairman Jignesh Shah among other office-bearers.
While advocates representing the state sought a stay on the order till it files an appeal before the Supreme Court, it was not granted by the high court. A senior EOW official said that once the detailed order is made available, a decision will be taken regarding filing an appeal in the Supreme Court.