Bombay High Court Says NSEL Not A Financial Institution, Quashes Attachment Of Assets

In a major relief for Jignesh Shah-led 63 Moons Technologies, the Bombay High Court quashed the attachment of assets of the company on the grounds that the National Spot Exchange (NSEL) is not a financial establishment. This comes as a big achievement for 63 Moons Technologies, which was previously known as Financial Technologies (India) Limited. 


The state had earlier attached the assets of the company under the Maharashtra Protection of Interest of Depositors in context of the NSEL scam where the company had defaulted on a payment of around Rs 5,600 crore. The move of the state was severely criticised by 63 Moons Technologies which termed it unreasonable, illegal, in excess and arbitrary. 


The state had issued a notification for the attachment of the assets of the company in 2018. On September 19, 2018, the Home Department of Maharashtra had issued another notification which ratified the previous notification. However, the decision was vehemently challenged by the company. In August, 2019, a High Court bench comprising justices Bharati Dangre and Ranjeet More ruled that as the NSEL is not a financial establishment, the Maharashtra Protection of Interest act is not applicable. 


The Economic Offences Wing had also requested to stay the order; but this was declined by the court. Rafique Dada, the senior counsel for the state, has asked for a stay order; but it was opposed by Mukul Rohatgi, the former Attorney General of India. Declining the stay, the High Court stated that the NSEL is not a financial company under the purview of the MPID in Financial Establishments Act, 1999. 


Buoyed by the court ruling, 63 Moons Technologies, the parent company of NSEL, has stated that it is a major victory for the company. Meanwhile, the 63 Moons Technologies has maintained the company is involved with the development and sale of technology products. This facilitates trading on commodities exchange as well as stock exchanges. The company states that it is a leading player in the financial technologies market. ODIN, which is the flagship product of the company, provides the people with a platform for online trading.


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