NSEL Scam: HC orders shifting of LOIL Group cases to Mumbai

The high court also slapped a fine on LOIL Group of Rs 1 lakh per petition filed by NSEL to be paid to the latter

The Punjab and Haryana High Court (HC) has directed shifting of all cases pertaining to the National Spot Exchange (NSEL) defaulter LOIL Group to Mumbai courts where cases of other defaulters are being heard.

A single-judge bench of Justice Anil Kshetarpal noted that the defaulter (LOIL Group) had been playing a game of jurisdiction of courts to avoid trial before the Maharashtra Protection of Interest of Depositors (MPID) court and other forums at Mumbai which was adding to the logistics complexities for the investigating agencies. 

This was being seen as an attempt by the defaulter to avoid trial before the MPID court, the court said in its order.

The Chandigarh-based LOIL Group, the second-largest defaulter in the NSEL crisis with an obligation of over Rs 700 crore, had obtained an ex-parte “no-coercive action by the Economic Offences Wing (EOW), Mumbai” from the Khamanon court in Punjab which was challenged by NSEL in the Punjab and Haryana HC. The HC set aside the ex-parte order.

The high court also slapped a fine on LOIL Group of Rs 1 lakh per petition filed by the NSEL to be paid to the latter. The NSEL had challenged the jurisdiction of the Khamanon court and filed as many as 13 revision petitions in the Punjab and Haryana HC. 

LOIL Group has been taken to task by the HC for filing civil suits in the wrong jurisdiction in order to delay the recovery process of NSEL against defaulters.

Setting aside the plea of LOIL Group, the HC ordered that “the courts at Mumbai alone shall have the jurisdiction to try and entertain the disputes and the ex-parte interim order obtained by LOIL Group”.

With this order, EOW, Mumbai, could now initiate action against LOIL Group regarding the attachment of properties and arrest of individuals involved in the case.

In March this year, the Enforcement Directorate (ED) had attached LOIL Group’s assets worth Rs 414 crore in connection with its probe in the NSEL crisis.