NSEL payments: HC orders creation of three-member monitoring panel

The three-member panel will negotiate with borrowers, FTIL and EOW on liquidation of borrowers' assets

The high court here on Wednesday ordered the setting up of a three-member committee headed by a retired judge of the Supreme Court or any high court to monitor a quick resolution of the Rs 5,600-crore payment crisis at National Spot Exchange Ltd (NSEL).

Judge S J Kathawalla said all parties, including NSEL’s promoter, Financial Technologies (FTIL), the borrowers and investors had agreed to this. “And, I do not have any problem in that,” he said. The other two members would preferably be a chartered accountant and a senior advocate. The judge’s direction was on a suit filed by Modern India, one of the NSEL investors. The exchange had a mass default last August on paying back investors. The latter had since gone to various forums for redressal, including the HC. With Wednesday’s decision, cases filed by all parties would be heard by the committee. No parallel case will be heard once the committee is formed, the judge said.

Various suggestions were made in court on names for the panel. The decision on these and on the terms of reference will be decided on Friday. All parties agreed to vest all powers to the committee, including that of negotiating with borrowers, FTIL and the city police’s economic offences wing, which has attached NSEL borrowers’ properties worth Rs 4,000 crore.

FTIL counsel Janak Dwarkadas said the borrowers had admitted to Rs 3,000 crore of payment liability. Hence, the committee should have power to liquidate the borrowers’ assets, with the court’s permission.

With this, therefore, cases filed by all parties including FTIL, borrowers,investors and any others would be heard by the committee. No parallel case will be heard once the committee is formed, the judge said.