NCLT approves ₹1,950 crore one-time settlement for NSEL investors

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The Mumbai Bench of the National Company Law Tribunal (NCLT) has approved a one-time settlement (OTS) scheme worth ₹1,950 crore proposed by National Spot Exchange Limited (NSEL) to resolve the decade-old payment crisis that affected over 5,600 investors.

 

The tribunal said the plan, backed by a majority of creditors, is “fair, reasonable, and not against public policy.”

 

The order is a step towards closure of the 2013 NSEL default case, a commodity market crisis involving a default of ₹5,402.71 crore by 24 trading members.

 

Under the scheme, NSEL and its parent 63 Moons Technologies will distribute ₹1,950 crore among specified creditors, who are investors with claims above ₹10 lakh, on a pro-rata basis.

 

Records show that 3,088 creditors representing ₹2,951.85 crore (about 64 per cent by value) voted in favour of the proposal.

The payout will be made through an escrow account managed by Universal Trusteeship Services Ltd, under the supervision of Justice S.C. Gupte (Retd.).

 

Creditors will withdraw all civil suits against NSEL and 63 Moons after the settlement is completed. Claims below ₹10 lakh have already been settled, and partial payments were made earlier to those with claims of ₹10–20 lakh.

 

A Bench of judicial member Sushil Mahadeorao Kochey and technical member Prabhat Kumar found the scheme compliant with law and “not contrary to public policy.”

 

However, it clarified that the sanction “shall not override or affect any existing attachment orders” under the Prevention of Money Laundering Act (PMLA) or the Maharashtra Protection of Interests of Depositors (MPID) Act. And, criminal proceedings will continue before competent courts.

 

NSEL has been directed to file the certified copy of the order and the sanctioned scheme with the Registrar of Companies and the Superintendent of Stamps within the statutory period.

 

Several intervenors, including the Enforcement Directorate (ED), the Economic Offences Wing (EOW), and investor groups such as LJ Tanna Enterprises, Pico Capital, and Geojit Credits, opposed the plan.

 

The ED argued that the scheme sought to “cleanse liabilities and attached assets” and could undermine ongoing criminal cases. The tribunal rejected this contention, noting that the scheme does not interfere with attachments or prosecutions and any use of attached assets would need separate judicial approval.

 

Pico Capital and others called the ₹1,950-crore offer inadequate. The tribunal said it could not reappraise a settlement that had secured overwhelming approval from creditors.

 

Referring to the Supreme Court’s ruling in Miheer H. Mafatlal v. Mafatlal Industries Ltd (1997), the Bench said its role was limited to assessing procedural compliance and fairness, not the commercial merits of the plan.

 

The approval paves the way for a long-pending financial resolution in the NSEL default case. However, parallel investigations and prosecutions under the PMLA, MPID, and other laws will continue.

 

“The Scheme appears fair and reasonable and is not contrary to law or public policy,” the order concluded.