‘Not fit and proper’ case against brokers: NSEL gets relief from SC

By: |
February 24, 2021 12:30 AM

However, it imposed cost of Rs 20,000 on the exchange for delay in refiling its appeal before the tribunal. A bench led by Justice RF Nariman while condoning the delay in refiling of the appeal by NSEL asked it to deposit Rs 20,000 with the SC legal aid service committee.

A bench led by Justice RF Nariman while condoning the delay in refiling of the appeal by NSEL asked it to deposit Rs 20,000 with the SC legal aid service committee.

The Supreme Court on Tuesday restored the appeal by the National Spot Exchange Ltd (NSEL), a part of 63 Moons Technologies (formerly known as Financial Technologies India Ltd), before the Securities Appellate Tribunal in a case related to ‘not fit and proper’ entities in the Rs 5,600-crore NSEL payment scam.

However, it imposed cost of Rs 20,000 on the exchange for delay in refiling its appeal before the tribunal. A bench led by Justice RF Nariman while condoning the delay in refiling of the appeal by NSEL asked it to deposit Rs 20,000 with the SC legal aid service committee.

NSEL had moved the apex court seeking a direction to the SAT to hear its appeal in the ‘Not Fit and Proper’ case against leading brokers. While senior counsel P Chidambaram appeared for a top broker, NSEL was represented by senior advocate Mukul Rohtagi.

Sebi in 2019 had declared around five leading NSEL brokers – Anand Rathi Commodities, Motilal Oswal Commodities, India Infoline Commodities, Phillip Commodities and Geofin Comtrade – ‘Not Fit and Proper’ to function on the commodities exchange due to their role in the NSEL settlement crisis of 2013.

While these brokers moved the SAT against Sebi’s order, NSEL also filed its appeal on the grounds that the market regulator had failed to consider all the allegations and materials. However, SAT had rejected the appeal on the technical ground of delay.

Earlier in May 2019, another bench led by Justice Nariman had set aside the Jignesh Shah-promoted 63 Moons Technologies merger with scam-hit NSEL. It said that the proposed merger did not satisfy the criteria of public interest and the amalgamation order contradicted itself by stating that “NSEL is the alter ego of FTIL, and thus, the two companies are practically one entity. In any event, it does not indicate as to how the ‘alter ego’ argument impacts public interest”.

NSEL was in July 2013 barred from launching any fresh contracts after it was found violating FCRA provisions.

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