Lawstreet Journal

NCLT Has No Jurisdiction to Examine Legality of Action Taken Under MPID Act, 1999: Bombay High Court

Lawstreet Journal 23 Nov 2020 10:09pm

Image courtesy: Lawstreet Journal Judiciary NCLT Has No Jurisdiction to Examine Legality of Action Taken Under MPID Act, 1999: Bombay High Court

The NCLT has no jurisdiction to examine the legality or validity of action taken under MPID Act, 1999 as per the Bombay High Court. It said that it is only the designated Court constituted under Section 6 if the said act that will have exclusive jurisdiction to deal with the same.

Division bench consisted of two judges: Justice SC Gupte and Justice Madhav Jamdar. The order dated January 28, 2019 was quashed and set aside the passed by the Member (Judicial), NCLT, Mumbai Bench and they directed to de-freeze the bank account in the name of Dunar Foods Ltd, which was freezed in relation to the National Spot Exchange Limited (NSEL) payment default crisis.

An electronic platform for spot trading in commodities was provided by The NSEL and used to operate from 16 states across the country. This was named as “63 Moons Technologies Pvt Ltd.” and was promoted by FTIL, which holds 99.99% of the share capital of NSEL.

The National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) held the balance 0.01% of the share capital of NSEL.

On September 30, 2013, MRA Marg Police station filed an FIR against 63 Moons Technologies Ltd, NSEL, the Directors and Key Management Persons of FTIL and NSEL, borrowers/trading members of NSEL, some brokers of NSEL and others, under sections 120B, 409, 465, 467, 468, 471, 474m 477(A) of IPC, 1860.

It was alleged in the FIR that NSEL had caused wrongful loss of approximately Rs. 5600 crores to more than 13000 investors. The investigation into… Continue Reading...

Tagged: NCLT   National Company Law Tribunal  
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