Bombay HC allows NK Proteins to withdraw Rs 4.15 cr to pay pending dues to employees

Over 13,000 investors were allegedly cheated to the tune of Rs 5,600 crore in the NSEL scam. N K Proteins was one of the top borrowers if NSEL. The EOW, in 2013, had registered an FIR in connection with the alleged scam, under various sections of the Indian Penal Code and invoked the Maharashtra Protection of Interests of Depositors (MPID) Act.

Senior counsel Milind Sathe for the petitioner informed the court that in 2013, all the accounts of the petitioner came to be frozen and the money lying in the accounts was transferred to an escrow account.

Sathe further said that EOW has attached the petitioner’s properties worth more than Rs 1,000 crore and because of the attachment of the bank accounts, the petitioner company is virtually strangulated as they cannot pay salaries, dues and bonuses to their employees.

Special Public Prosecutor for the EOW Rebecca Gonsalves opposed the petition and argued that the liability of the petitioner in terms of the Forensic Audit is approximately Rs 960 crore.

She countered Sathe’s argument and told the court that as of date, no valuation of the properties was done, and therefore, it cannot be said that the value of the attached properties belonging to the petitioner is more than Rs1,000 crore.

Sathe further informed the court that the petitioners are required to pay an approximate amount of Rs 4.16 crore towards the salaries, dues and bonus of their employees per month and the amount lying in the attached four bank accounts is approximately Rs 9.25 crore.

A division bench of Justice Ranjit More and Justice Bharati H Dangre said: “It cannot be said to be the intention of the Legislature while enacting the MPID Act was to strangulate the financial establishments. The petitioners are running a business and in order to allow them to carry their day-to-day activities and to enable them to disburse payment towards salaries of the employees and to meet the statutory demands, arrangements are required to be made.”