Mumbai: In a breather for 63 Moons Technologies (India) Ltd and its director Jignesh Shah, the Bombay High Court on Thursday held it to be a ‘non-financial’ establishment and hence its properties cannot be attached. The firm and its director was named in the multi-crore National Spot Exchange Limited (NSEL) scam.
The order brings a piece of good news for 63 Moons, as all its properties, which were attached by the government authorities, would now stand released.
A bench of Justices Ranjit More and Bharati Dangre said since Shah’s firm, which was earlier known as Financial Technologies (India) Limited (FTIL) is not a financial institution, thus its movable and immovable properties worth Rs8,600 crore cannot be attached or seized.
The bench further said the Maharashtra Protection of Interests of Depositors (MPID) cannot be applied on FTIL or now 63 Moons Ltd.
The bench was seized with a bunch of petitions filed by 63 Moons, seeking quashing of the notifications issued by the Maharashtra government from time to time to attach their properties. The firm argued that the notifications were in arbitrarily issued and we’re against the principles of natural justice.
Senior counsel and former Attorney General Mukul Rohatgi, appearing for 63 Moons, argued his client’s firm was indulged into developing and selling technology products to facilitate trading on exchange such as stock exchanges and commodities exchange. He further apprised the bench of the software ODIN, which facilitates online trading.
Accordingly in 2016, the EOW asked 63 Moons to neither dispose of any of its properties nor create any third party rights in its properties without permission of a special court.
Subsequently, in 2018, the government had issued a notification to attach the firm’s movable properties (the software) and also the revenue or profits incurred through it.
“We have examined the issue in hand and we have no hesitation in concluding that the NSEL is not a Financial Establishment and resultantly, the petitioner firm (63 Moons), who is a promoter of the said establishment cannot be proceeded under the provisions of MPID Act,” the bench led by Justice More ruled.
The bench added, “Resultantly, we are constrained to quash and set aside the action to which the petitioner is subjected to by taking recourse to the provisions of MPID Act.”
Soon after the bench pronounced its judgment, the counsel appearing for the state urged the judges to stay the operation of the order. He apprehended if the order isn’t stayed then Shah and his firm might dispose all the properties.
At this, Rohatgi argued his client Shah has already borne the brunt all these years only because the state authorities assumed NSEL to be a financial establishment. Having heard the submissions, the judges refused to stay the order.
Reacting to the order, Shah said, “One by one, the court of law is demolishing all the illegal actions. From day 1, I and my 63 Moons have maintained utmost faith in the Indian judiciary, and we have fully complied with all investigating agencies and the courts, and will continue to do so. I want to reiterate truth prevails and triumphs!”