The Supreme Court issued a notice to 63 Moons Technologies Ltd. on Friday on a contempt-of-court plea raised by the NSEL Investors Action Group.
The investor group informed the court that Rs 1,700 crore were transferred out of the assets that were attached for the recovery of investor dues totalling Rs 5,600 crore.
"The court has taken their (63 Moons) statement on record, which states that status quo with respect to the properties will be maintained. How can these transfers take place after that?" the investor group, represented by senior advocate Gopal Sankaranarayanan, asked.
The transfers have taken place with impunity, while the top court's interim orders in the case were prevailing, Sankaranarayanan argued.
If we will ever see the money, we don't know, but 63 Moons has to be made answerable for this.NSEL Investors Action Group
The investor group backed its argument by citing an affidavit submitted by the competent authority in the case which said that 63 Moons made large withdrawals from its bank accounts, closed some accounts, invested certain amounts in fixed deposits, and withdrew some amounts from the attached fixed deposits.
While issuing notice, the top court clarified that pendency of proceedings before the top court, pursuant to the issuance of notice, shall not preclude either the competent authority, the special court or the Bombay High Court from exercising their respective jurisdictions.
In an exchange filing, 63 Moons said the investor group did not serve the company with any notice regarding the proceedings initiated before the top court, adding that it was completely unaware of it. 63 Moons said it would clarify all the allegations before the apex court.
In 2022, the top court upheld the Maharashtra government's decision to attach properties of 63 Moons in connection with a Rs 5,600-crore scam that duped nearly 13,000 investors back in 2013.
63 Moons, formerly known as Financial Technologies India Ltd., was founded and funded by Jignesh Shah back in 1988. 63 Moons was the parent company of the now defunct National Spot Exchange Ltd., which suspended trading activities in 2013 following the multi-crore scam.
The scam prompted the Maharashtra government to attach properties belonging to NSEL's parent company, 63 Moons, as it held a 99.99% stake in it. The step was taken so as to recover the lost investor money.
However, the Bombay High Court in 2019 set aside the state government's order of attachment as it held that NSEL did not retain the commodities or the money. NSEL only performed the role of a facilitator, in a manner similar to the BSE, the high court had said.
The top court was not moved by the high court's line of reasoning and, therefore, set aside its order that vacated the attachment of properties by the state government. The apex court said that NSEL represented that on receiving money and commodities, the members would receive "assured returns" and a "service".
Though NSEL has been receiving deposits, it has failed to provide services as promised against the deposits and has failed to return the deposits on demand, the top court said while upholding the state government's order of attachment.
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