HC grants injunction on properties of NSEL defaulter

With dues of Rs 922 cr, Mohan India, along with its subsidiaries, is NSEL's second largest defaulter

The Bombay High Court issued an injunction order, seeking details of the properties of Mohan Group, a defaulter of the beleaguered National Spot Exchange Limited (NSEL).

During the hearing on Tuesday, the court ordered Mohan India to disclose details of  its properties within four weeks. Also, HC directed Primezone Developers, a firm having links with the defaulter, to disclose details of its movable and immovable properties within a month. The order has come as a big relief to NSEL and its investors, said an investor.

With a payment obligation of Rs 922 crore, Mohan India, along with its subsidiaries, is the second largest defaulter to NSEL, which saw Rs 5,600 crore payment crisis in July last year.

Mohan India had continuously failed to meet the commitment under the conciliation agreement it had entered into with NSEL. Later, NSEL filed a case in the Maharashtra Protection of Interest of Depositors (MPID) court to remove the non-coercive action order granted to it. It also filed a suit for recovery against Mohan India in the high court.

“This order is a signal in the right direction,” said Ameet Naik, an NSEL counsel.

NSEL is now looking to file similar recovery suit against other defaulters. "After this order, we will file similar suits against other defaulters, as it indicates that the money has gone to the defaulters," Naik added.

HC also observed that on invocation of injunction, Mohan India will be required to furnish a bank guarantee for the suit amount, which is over Rs 922 crore with the court.

"This would not have been possible without the continuous support of management staff and promoter of NSEL who supported such a suit against the defaulter," said Prakash Chaturvedi, joint MD of NSEL.