NSEL case: Bombay HC quashes EOW's move to attach 63moons' properties

Frees ODIN software and interest income accrued on investment

The Bombay High Court on Wednesday quashed the Maharashtra government's move to attach properties worth Rs 3.2 billion of 63moons Technologies (formerly Financial Technologies India) in the Rs 56 billion payment default at its defunct subsidiary National Spot Exchange Ltd (NSEL).

The court stayed various notifications issued in April 2018 attaching 63moons' properties and bank accounts. In particular, the court has also stayed the attachment of ODIN software and its receivables. The court has also stayed a corrigendum issued whereby accrued returns on investments will now become available for 63moons. The court specifically stayed portions of the September 2018 notification, as a result of which 63moons will continue to receive periodically accrued benefits on investments.

"It's a major relief for thousands of employees of 63moons Technologies. Money will start flowing in now to meet day-to-day and future expenses," said Abad Panda, the counsel appearing for the company.

In April this year, the government of Maharashtra issued a notification attaching immovable properties in the Rs 56 billion payment default that took place at 63moons subsidiary NSEL in 2013. Around 13,000 investors claimed to have lost their hard-earned money, of which money trails were found with 23 defaulters.

Arguing on behalf of 63moons in the case, Panda pointed out that none of the defaulters' bank accounts were attached by the Economic Offences Wing (EOW), despite the entire money trail being established by the agency to these entities. They successfully argued that despite around Rs 80 billion worth of assets being attached by the EOW in the case, freezing and attaching of 63moons' salary accounts and ODIN intellectual property was tantamount to undue harassment, targeting and strangling of the company. 

"This order has tied our hands and feet, making us unable to fight for justice. Day-to-day legal expenses need to be borne by the company from the operational accounts. Without which we would not be able to protect the rights of our nearly 1,000 employees and 59,000 shareholders. Freezing the operational accounts would not help EOW recover the money from the 24 defaulters at our subsidiary, NSEL," S Rajendran, managing director of 63moons, had said earlier.

In September 2016, the EOW had attached Rs 18 billion worth of financial investments by 63moons. Income interest from these assets was deposited in three bank accounts. The EOW had recommended attaching these three accounts and the ODIN software's IPR and its receivables. This was then notified by the Maharashtra government. ODIN is a financial services trading software with around 80 per cent of market share in equity, currency and commodities.