SLP Dismissed By Apex Court In Jignesh Shah-Led FTIL Asset Case

by Ankita Sehgal Freelance Blogger, Lives in New Delhi

In 2013, NSEL, one of the subsidiaries of Jignesh Shah-led FTIL, faced a payment crisis. It amounted to Rs 5,600 crores and many investors, brokers and key management executives were allegedly involved in it. Since then, it has been shut down and its parent company, FTIL is being held responsible for paying off the amount.

The Bombay High Court had ordered to release funds of FTIL in the NSEL case attached under the Maharashtra Protection of Interest of Depositors (MPID) Act in October last year. Under the MPID act, the Maharashtra government had previously issued notifications to attach the assets of Financial Technologies (India) Limited (FTIL), currently known as 63 Moons Technologies Limited. However, the Bombay High Court identified the decision as "excessive, arbitrary and unreasonable", and passed an interim order. It asked the Maharashtra government to not sack the company’s assets under the MPID Act that include bank accounts and properties. Further, the interim order stayed the attachment of ODIN software, its receivables and a corrigendum issued whereby 63 Moons will have access to accrued returns on investments.

The state government had previously issued a notification on 4th April to freeze all the operating accounts of the company. NSEL had allegedly collected money from depositors by promising them attractive returns but failed to return back the deposits at the time of repayment. Also, the Economic Offences Wing (EOW) of the Maharashtra Police that investigated the money laundering case since 2014 decided that it would best to invoke the stringent MPID law.

After the order was passed, both the Maharashtra government and NSEL Investors Action Group (INA) challenged it in the apex court and the hearing was held towards the end of January. While Senior Advocate Mukul Rohatgi was representing 63 Moons Technologies Limited, senior advocate Shyam Diwan represented NIAG. After hearing the arguments of both the sides, the apex court decided not to interfere in the decision of the Bombay High Court. It dismissed the Special Leave Petitions (SLP) of NSEL Investor Action Group (NIAG) and the Maharashtra government. Further, since it is a very sensitive case and matter of grave importance, the apex court also ordered the Bombay High Court to conclude the final hearing by the end of this month.

Since the time the Supreme Court rejected the petitions against 63 Moons, its shares skyrocketed. They surged by 16.7% intraday to Rs 95.25 per share. At 3.15 pm, the stock traded 11.04% up at Rs 90.55 per share on the BSE.