Bombay HC Rejects NSEL Accused’s Plea To Release Attached Property That Went Unsold In Auctions

Mumbai, May 2: The Bombay High Court has dismissed an appeal by an accused in the alleged 2013 National Spot Exchange Ltd. (NSEL) scam case seeking permission to bid for his property, which was attached and then put for auction under the Maharashtra Protection of Interest of Depositors Act, 1999 (MPID Act).

A bench of Justices Ajey Gadkari and Kamal Khata noted that merely because the property remained unsold despite being put up for auction thrice, the appellant, Ramesh Nagpal, could not be permitted to bid for it.

Appeal against special court order

The HC was hearing an appeal filed by Nagpal challenging the order of the special court refusing to permit him to bid for the property.

On September 30, 2023, MRA Marg police station registered an FIR against directors and trading members of NSEL, brokers and others for alleged criminal conspiracy, breach of trust and forgery. The probe was later transferred to the Economic Offences Wing, which invoked provisions of the MPID Act.

Nagpal, proprietor of Shree Radhey Trading Company and an NSEL member since September 2011, was added as accused number 59. He was arrested on February 26, 2016 and granted bail by the special MPID court on March 30, 2016. During the course of investigation, various properties were attached by the investigation agencies under the provisions of the MPID Act and PMLA.

Property remained unsold

He submitted that, during the hearing of the bail application, he made an oral proposal to deposit Rs 25 lakh, against which the competent authority was to hand over the goods, without admitting any liability.

However, despite him depositing Rs 29 lakh with the competent authority, his property was put up for auction three times with a reserve price of Rs 48 lakh but failed to attract any buyers.

He approached the HC challenging rejection of his application by the special court and sought release of the property and expressed willingness to deposit the differential amount.

However, NSEL opposed the plea, contending that although HDFC Quicker Realty valued the property at Rs 48 lakh, the valuation by Notiyal and Associates was Rs 12,55,56,352.

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HC cites no provision for release

The court noted the valuation report and added that there is no provision in the MPID Act to release property in favour of the owner after an order is passed permitting auction.

“We find no reason to permit the Appellant to bid for the said property merely because the said property remained unsold though put up for auction for three times,” the bench noted while rejecting Nagpal's appeal.

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