Maharashtra Govt To Issue Properties Attachment Notification Against IIFL In ₹5,600 Crore NSEL Scam

Maharashtra Govt To Issue Properties Attachment Notification Against IIFL In ₹5,600 Crore NSEL Scam

Following a rap from the Bombay High Court, the Maharashtra government has assured the court that within four weeks, it will issue notification for attachment of properties of IIFL.

Urvi MahajaniUpdated: Sunday, March 17, 2024, 10:12 PM IST
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Bombay HC | File

Mumbai: Following a rap from the Bombay High Court, the Maharashtra government has assured the court that within four weeks, it will issue notification for attachment of properties of IIFL (erstwhile India Infoline Commodities Limited) in connection with the 2013 National Spot Exchange Limited (NSEL) scam.

After dragging its feet on the issue for more than four months, a division bench of Justices Revati Mohite-Dere and Manjusha Deshpande, on March 12, summoned principal secretary to the home department, Anoop Kumar Singh, to the court. Singh assured the court that “the State by following due process of law, will issue notification for attachment of the concerned properties of IIFL, within four weeks”.

The court was hearing a petition filed by one of the investors, Vishvanidhi Dalmia, seeking attachment of the properties of IIFL, its promoters and directors under the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, within a stipulated time frame. He accused IIFL of luring investors to invest on the NSEL platform, leading to significant financial losses.

Dalmia’s lawyers, senior advocate Rajiv Chavan and advocate Gaurav Parkar, argued that IIFL, which is a financial establishment as per MPID Act, accepted deposits of Rs326 crore from various investors, and the same has been confirmed by the Competent Authority (CA) before the special MPID Court, which is conducting the trial in the case. Considering the circumstances, the government is bound to attach IIFL’s properties, Chavan argued.

On December 15, 2023, the bench led by Justice Ajey Gadkari had directed the principal secretary to file, within six weeks, a comprehensive affidavit “not only dealing with this (Dalmia’s) petition but the steps to be adopted and / or the state may consider to adopt” for attachment of properties.

In February, the state sought more time, which was granted by the court as a last chance. It had warned that if the state failed to file a reply, then it “will be constrained to adopt appropriate steps for non-filing of the affidavit, by the principal secretary”. On March 12, during the morning court session, the special public prosecutor Avinash Avhad filed a one-and-half page affidavit.

The court noted that the affidavit was not a “comprehensive” one, as directed, but was also “bereft of several details and vague”. The affidavit further added that “only after getting a final decision from this court”, the state, by following due process of law, will issue notification for attachment of the required property of IIFL. After that the Competent Authority will take further necessary steps, as per law.

Irked, the judges asked the principal secretary to remain present in the court at 2.30pm. “Normally, we would have not asked the principal secretary, Home Department, Government of Maharashtra to remain present. However, considering the history of the orders passed by this court from time to time and what is expressed by Mr Avhad, learned special public prosecutor, we deem it appropriate to direct the principal secretary, Home Department, Government of Maharashtra, to remain present before us, today at 2.30pm,” the court noted.

The principal secretary accordingly appeared before the court the same afternoon and assured that necessary action, in accordance with law, will be taken for attachment of properties.

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