PMLA Appellate Tribunal also releases assets of 63 Moons from ED attachment.

The PMLA Appellate Tribunal, on Tuesday released the assets of 63 moons from attachment by the Enforcement Directorate
(ED). This order comes soon after the Bombay High Court order, which quashed  the attachments of 63 moons assets under the MPID Act.
However, the Tribunal, after quashing the attachment orders, has made it subject to filing of an indemnity bond within a week. The Tribunal has restrained 63 moons
from dealing with the released assets till pendency of the trial of the larger issues in the PMLA court. 63 moons, based on sound legal advice, is of the opinion that
passing of this sort of restraint order and of seeking an indemnity bond, particularly when the orders of attachment have been quashed, is beyond the power of the
Tribunal under the PMLA. 63 moons will take appropriate legal recourse against this part of the order.

63 moons wins MPID case in Bombay HC;Court rules NSEL is not financial establishment

In a victory for 63 Moons Technologies Limited, formerly known as Financial Technologies (India) Ltd, and its group CEO Jignesh Shah in the Rs 5,600 crore National Spot Exchange Ltd (NSEL) scam case the Bombay high court on Thursday held that it is not a financial institution and hence notifications for attachment of the company’s assets including bank accounts and properties, under Maharashtra Protection of Interest of Depositors (MPID), stand quashed.

The Hon’ble Bombay High Court today ruled that the National spot Exchange Limited (NSEL) ,is not a financial establishment and hence notifications for attachment of the company’s assets including bank accounts and properties under the MPID act stand quashed. The competent authority requested for a stay . However the honorable High Court declined

The Honorable Bombay High Court has quashed all the notifications issued by the state government in the year 2016 and 2018 attaching movable and immovable properties of 63 moons under the MPID act 1999 by observing that NSEL is not a financial establishment since it did not deposit as defined under the MPID Act and resultantly the petitioner who is a promoter of the state establishment cannot be preceded under the provisions of MPID act

The company had called the state’s action “in excess”, arbitrary, unreasonable and illegal.

The state had issued notifications in April 2018 under provisions of the Maharashtra Protection of Interest of Depositors (In Financial Establishment) Act (MPID). The company challenged their validity. The HC bench of Justices Ranjeet More and Bharati Dangre ruled that MPID is not applicable. The court also declined to stay its judgment. Senior counsel Rafique Dada, appeasing for the state, sought a stay saying it would lose the assets but former attorney general for India Mukul Rohatgi opposed it saying once the court has held NSEL is not a financial establishment it cannot stay the consequences that follow.
The implication would be that the assets attached under MPID stand released.

The company had last year moved the HC to assail validity of certain provisions of the MPID Act and its counsel former attorney general Mukul Rohatgi with Aabad Ponda and Sujay Kantwala had argued that the authorities had sought to attach over Rs 8,500 crore.

The company said its business was of developing and selling technology products to facilitate trading on exchange such as stock exchanges and commodities exchanges. It also claimed to be a champion in financial technologies market and a software belonging to it (ODIN) provides a platform for online trading.

In July 2016, EOW had restrained company from creating third party rights or disposing assets without permission of designated court. In September 2016 state issued notification to attach assets including investments in mutual funds and bonds. This notification, however, excluded the periodically accrued benefits on these investments.

In April 2018, the state issued a notification to attach movable property (software known as ODIN software) and receivables from it. Home department, Maharashtra issued a fresh notification on 19th September, 2018 ratifying the notifications.
“We find sufficient substance in the grievance of the petitioner as ODIN is a software developed by the petitioner and it accrues income to the petitioner by using technology and attaching ODIN perpetually would strangulate the business of the petitioner company,” said the HC in its interim order last year.

The HC had said that, prima facie “amount earned from the non-ODIN business and the revenue accruing from ODIN need not be brought within the purview of attachment…” The reasoned judgment copy will be made available soon.

HC relief to 63 moons: EOW attachment

Mumbai: The interim relief to 63 moons technologies limited (formerly known as FTIL) in connection with the MPID matter was granted by the Hon’ble Bombay High Court on Wednesday.
The Honourable Court stayed various notifications issued in April 2018, attaching the Company’s properties and bank accounts.
The Court also stayed the attachment of ODIN software and its receivables. The Honourable Court specifically stayed portions on the September 2018 notification, which would now allow 63 moons to continue to receive accrued benefits on its investments in a periodic basis.
Advocates Mukul Rohtagi and Abad Ponda, arguing on behalf of 63 moons in the case, pointed out that none of the defaulters’ bank accounts were attached by the EOW (Mumbai), despite the entire money trail of Rs 5,600 crore in the NSEL case being established by the agency to 24 entities. They successfully argued that despite around Rs 8,000 crore worth of assets being attached by the EOW in the case, freezing and attaching of 63 moons’ salary accounts and ODIN intellectual property was tantamount to undue harassment, targeting and strangling of the Company.
“We have immense faith in the judiciary and our stand is vindicated. We thank all our employees, Board of Directors and the Mentor for having stayed united during this challenging period and also leading us in pursuing judicial remedy”, the spokesperson for 63 moons technologies limited stated.