Bombay HC directs P Chidambaram and others to file statement in 10,000 cr damage suit by 63 Moons Technologies.

The Bombay high court on Friday asked Congress leader P Chidambaram, former forward market commission (FMC) chairman Ramesh Abhishek and serving bureaucrat KP Krishnan to file their statements in the the Rs 10,000 crore damage suit by 63 Moons Technologies within four weeks.

The bench said that if the trio fail to submit the statements within the 4-week deadline, then it would be considered as an undefended suit. At the same time The Bombay high court warned the three that this would be the last extension given to them, as they missed the deadline for the second time.

On October 22, 2019, he Bombay high court had directed Congress leader P.Chidambaram, Ramesh Abhishek and KP Krishnan to file their written statements within eight weeks in the Rs 10,000 crore damages suit filed by 63 Moons Technologies Limited.

The court had also rejected the plea of Chidambaram’s counsel for further liberty saying that eight-week time is more than enough to file the written statements.

In February, 63 Moons had said that it served legal notice to Chidambaram and the two others seeking damages worth Rs 10,000 crore.

The company has alleged that the three individuals played a major role in perpetrating the NSEL payment crisis to destroy the exchange ecosystem created by 63 Moons. As per the company, it resulted in huge damage and value erosion and loss of employment.

In August, the Bombay high court had ruled that the National Spot Exchange Ltd (NSEL) is not a financial institution and hence notifications for attachment of the company’s assets, including bank accounts and properties, under the MPID Act stand quashed.

The company 63 Moons Technologies has also filed a case against Ramesh Abhishek in Madras high court seeking Central Vigilance Commission (CVC) probe into the matter.


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.

Win-win for 63 moons; MCA’s plea to supersede 63 moons Board dismissed by NCLT under Sec. 397 of Companies Act, 1956

Mumbai, June 9, 2018: Surpassing the Board of 63 moons technologies limited (formerly known as FTIL) under Section 397 of the Companies Act, 1956, the National Company Law Tribunal (NCLT), Chennai dismissed the plea of the Ministry of Corporate Affairs (MCA). The NCLT completely cleared the present Board of 63 moons (which comprises of 4 former Secretaries IAS (Retd.), 1 former Supreme Court Judge, 1 former Bombay High Court Judge, 2 CAs, 1 IIM A Alumni and 2 former Senior Bankers), of all the baseless allegations of oppression and mismanagement.

In this look, Mr.S Rajendran, MD & CEO, 63 moons welcomed the NCLT Order and stated, “We are extremely happy to note that NCLT has rejected MCA’s prayer to supersede the Board of 63 moons in connection with the payment defaults that occurred at one of our subsidiaries, National Spot Exchange Ltd (NSEL) in 2013. This judicial order in fact confirms the opinion given by Law Ministry way back in June 2014 to MCA, of non-applicability of Sec. 397 and many such sections on FTIL. The order has also given a clean chit to the current Board of 63 moons of any alleged misconduct or wrongdoing against the interest of its shareholders”.

In regard of past directors and new directors’ addition, while we are still examining the Order, on a swift review, it appears to be chock-full of factual inaccuracies and inherent contradictions. For instance, after categorically holding that all those who joined the Board after 31.7.2013 i.e. closure of NSEL’s exchange operations, are exculpated, reputed independent professionals who joined the Board in late 2014 have been indicted for which we will certainly go for review as well as challenge the Order before NCLAT and are confident that truth and justice will prevail.

Mr. Rajendran opined that “We are completely shocked and astonished to note that the NCLT Order has applied Sec. 388B and such sections against some of the past directors who were not even on Board of NSEL i.e. Mr. Manjay Shah and Mr. Dewang Neralla, and strangely in case of Mr. Jignesh Shah, Section 388B is applied on the basis of material beyond the original petition filed by MCA in 2015. Shockingly, out of the three directors of FTIL, only Mr. Jignesh Shah was on Board of NSEL and no Sec. 397 proceedings are initiated against NSEL nor any Section 388B is upheld against any other directors of NSEL including other directors of FTIL who were also on NSEL Board. This complete contradiction is one of the many unexplained & unsubstantiated inconsistencies in the Order”.

The NSEL payment crisis, which is a force majeure engineered accident, actually happened because of a well-crafted political conspiracy during UPA 2 era. It is nothing but continued targeting of Mr. Jignesh Shah which started in the earlier UPA Govt. by a powerful minister and his network of loyal bureaucrats, who failed in their duty and misled the Govt. for many such industry negative actions.

We are scrutinizing all legal options and we are very sure that finally truth shall prevail & fairness will be done, which is already noticeable in numerous of our legal cases counting this dismissal of MCA’s prayer against the present Board of 63 moons under Sec. 397 of Companies Act, 1956.

HC reserves order on bail plea of Jignesh Shah

jignesh shahThe Bombay High Court Monday reserved its order on the bail plea of Jignesh Shah, promoter of Financial Technologies (Indian) Ltd which holds 99.99 per cent of scam-tainted National Spot Exchange Ltd (NSEL). He was arrested in connection with the Rs 5,600 crore payment crisis at NSEL.

Economic Offences Wing (EOW) Avinash Avhad told Justice A M Thipsay the agency is still investigating the case and yet to file chargesheet against Shah.

“What is the subsequent development that suddenly prompted you (EOW) to arrest and show his (Shah) involvement?” asked Justice Thipsay.

Senior Counsel Ram Jethmalani, who represented Shah said, “It is the broker’s scam. They always put one person in front so that they can get out.”The court asked Avhad what EOW had done to arrest brokers after Jethmalani said brokers had enticed investors to put in their money in NSEL.

At this, around 60-70 investors present in the courtroom shouted saying it was Shah too who promised them assured returns. Justice Thipsay warned all of them and said, “I will take all of you in custody.” While posting the order’s pronouncement on Tuesday, the court warned the investors again to maintain decorum after the order is passed.

The High Court on May 9 granted bail to Anjani Sinha, former managing director and chief executive officer of NSEL and prime accused in the case. Shah was arrested on May 7 in connection with the scam. Sinha had earlier claimed that Shah was trying to shirk responsibility and put the entire blame on him.

The scam came to light on July 31 after the NSEL suspended trading in all but its e-series contracts. The suspension was reportedly carried out after the Ministry of Consumer Affairs instructed the exchange not to offer futures contracts.

(Source: PTI)

MCX promoter Jignesh Shah files fresh bail plea in HC

vvvMCX promoter Jignesh Shah, held in the Rs 5,000 crore NSEL scam, has filed a petition in the Bombay High Court challenging an order of a special court refusing to grant him bail.

The designated judge of Maharashtra Prevention of Investors Deposits Act Court D P Surana, had on June 24 rejected Shah’s bail on the ground that investigation is still on and that if Shah was released on bail, it is likely that he may tamper with evidence or hamper probe.

Being aggrieved, Shah moved the High Court last week in a petition filed through lawyer Aniket Nikam. It is expected to come up for hearing in due course. Shah challenged the grounds on which his bail has been rejected.

He contended that after his arrest in this case on May 7, he had helped the investigating agency by supplying all documents and disclosing all information within his knowledge. So, there was no question of tampering with evidence or hampering probe as had been held by the trial court.

Moreover, Shah argued that he was not involved in the alleged scam as he was a non-executive director of National Stock Exchange Ltd (NSEL) and was not involved in its day-to-day operations.

Shah had come under the scanner of Economic Offences Wing and other agencies last year when NSEL, part of the Financial Technologies (India) Limited founded by Shah, faced a payment crisis as nearly 18,000 of its investors allegedly lost millions of rupees.

Lawyer Aniket Nikam said, “Petition has been filed in the High Court to seek bail for Jignesh Shah.” Nikam has appeared in many high profile cases such as Adarsh housing scam and Jalgaon housing scam. PTI

(Source: PTI)

Forward Contract Bill deferred by cabinet

The Union Cabinet on Thursday deferred consideration of the much-awaited Forward Contract Regulation Act (Amendment) Bill.The Forward Contract Bill aims to give more powers to Forward Market Commission, the commodity markets regulator.

 The Cabinet meeting chaired by Prime Minister Manmohan Singh deferred consideration of the Forward Contract  Bill over which there is no consensus in the government.

 The Forward Contract Bill  is essential for the development of commodities futures market as it aims to strengthen the FMC by providing it financial autonomy, facilitate the entry of institutional investors and introduce new products for trading such as options and indices.

 The Parliamentary Standing Committee had demand greater autonomy for FMC that also regulates the three spot online commodity exchanges — Financial Technologies-promoted National Spot Exchange Ltd (NSEL), the National Commodity & Derivatives Exchange-promoted NSpot and Ahmedabad-based National Multi Commodity Exchange (NMCE).

 It had also suggested allowing financial institutions and banks, mutual funds, and insurance companies to participate in forward market so as to ensure better price discovery and lower volatility.