NSEL: SC Appoints High-powered Committee To Execute Decrees against Defaulters
The National Spot Exchange Limited (NSEL) said on Wednesday that the Supreme Court (SC) has approved the constitution of a high-powered committee headed by retired judge of the Bombay High Court, Pradeep Nandrajog, for recovery of monies from the defaulters where NSEL has secured money decrees.
The apex court exercised its powers under Article 142 of the Constitution to constitute the committee to execute awards and decrees against the defaulters in the Rs5,600 crore NSEL payment crisis.
Article 142 states that any decree or order passed by the SC to do complete justice is enforceable throughout the territory of India.
Notably, NSEL has single-handedly secured decrees/arbitration awards worth Rs3,534.46 crore against NSEL defaulters. Further, an amount of Rs760.31 crore worth of defaulters' liabilities has already been crystallised by the high-powered committee appointed by the Bombay High Court, which the NSEL is confident of soon being culminated into a decree.
Proceedings for a decree against NK Protein worth Rs964 crore is pending before the Bombay High Court. The forensic auditor appointed by the economic offences wing (EOW), Mumbai Police, and the serious fraud investigation Office (SFIO) has confirmed the liability of NK Proteins to the tune of Rs964 crore. Two of the defaulters have already paid their liabilities amounting to Rs195.75 crore.
The recovery from the NSEL defaulters, after giving credit for the monies paid by them, stands at Rs5,454.52 crore and their attachment of assets are sufficient to cover the claims made by the trading clients if all claims are considered genuine.
The NSEL stated that the claims will, however, be verified by the committee appointed by the SC. The SFIO has said that it has received claims worth Rs2,239.61 crore, out of which Rs935.09 crore appears to be doubtful, thereby confirming the genuine claims to be of Rs1,304.61 crore only.
Immediately after the NSEL payment crisis emerged in August 2013, NSEL had taken a without prejudice loan of Rs179 crore from 63 moons technologies limited, which will also be recovered from the defaulters.
This loan was used by NSEL to repay traders having claims of up to Rs2 lakh in entirety and those with claims between Rs2 lakh and Rs10 lakh by up to 50%, a statement said.
Recently, Maharashtra paid the remaining 50% to those with claims between Rs2 lakh and Rs10 lakh, thereby clearing its dues in entirety.
There are certain vested groups who have been consistently deviating from the recovery efforts and only targeting NSEL. They also attempted to stall the payment being made to those with claims between Rs2 lakh and Rs10 lakh, but the Supreme Court dismissed their plea.
NSEL said the committee will oversee and execute the decrees against the defaulters by the sale of assets that have been attached by the state of Maharashtra under the Maharashtra Protection of Interest of Depositors (MPID) Act and the enforcement directorate across India.
The value of assets attached by Maharashtra under the MPID Act and the Enforcement Directorate of the defaulters is more than sufficient to cover the claim amount, and so is the decree.
The execution of the decrees, which otherwise would have to be carried out in the district/sessions court and that too at the respective locations of the defaulters, will now be executed by the Supreme Court-appointed committee.
This will ensure faster recovery from the NSEL defaulters. Post-recovery, this committee is empowered to conduct an equitable distribution of the sale proceeds after verification of claims.
All investigating agencies have confirmed the liability of the defaulters with the money trail up to the last paise traced to the defaulters, it said, adding that no money trail is established to NSEL, its directors, or promoters.
The order of the SC once again confirms the single-handed effort on the part of NSEL, which has been relentlessly working towards recovery from the defaulters in the interest of genuine trading clients, NSEL noted.
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