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63 moons wins MPID case in Bombay High Court, big win for Jignesh Shah

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Mumbai (Maharashtra) | August 23, 2019 3:41:23 PM IST
The Bombay High Court has ruled that the National Spot Exchange Ltd (NSEL) is not a financial establishment and hence notifications for attachment of the company's assets including bank accounts and properties under the Maharashtra Protection of Interest of Depositors (MPID) Act stand quashed.

The competent authority requested for a stay but the court declined.

It has quashed all the notifications issued by the state government in 2016 and 2018 attaching movable and immovable properties of 63 moons under the MPID Act 1999 by observing that NSEL is not a financial establishment since it did not accept any deposits as defined under the MPID Act.

Resultantly, the petitioner who is a promoter of the said establishment cannot be proceeded under the provisions of MPID Act.

The court held that NSEL was a commodities exchange where commodities were traded between willing buyers and sellers acting through their brokers.

The state and investigating agencies have simply assumed and proceeded on the basis that NSEL acted as financial establishment without verifying this jurisdictional fact before attaching properties of 63 moons.

The court has also noted that after going through the documents, it leaves no doubt that the transaction was between two persons, that is buyer and seller through the medium of NSEL. The court is satisfied that the NSEL has not accepted any deposit.

If it has not accepted any deposit, then it would not fall within the definition of 'financial establishment.'

In 2016, the Economic Offences Wing of Mumbai police attached assets worth Rs 7,063 crore belonging to Financial Technologies India Ltd (FTIL) owned and founded by Jignesh Shah.

The developments followed Shah's recent arrest by Enforcement Directorate in connection with the Rs 6,000 crore scam at National Spot Exchange (NSEL) which is owned by FTIL.

The ED said it had collected evidence of money-laundering against Shah, and he was remanded in judicial custody by a special Prevention of Money Laundering Act (PMLA) court. (ANI)

 
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