SC verdict in Sebi-NCLT legal tussle will set a precedent, say experts

The case is seen by many as a turf war between Sebi and NCLT and the outcome will be crucial in deciding how illegal money collection schemes are dealt with

The Supreme Court’s verdict in the case filed by market regulator Securities and Exchange Board of India (Sebi) against an order by the National Company Law Tribunal (NLCT) in a case pertaining to illegal money collection will set a precedent, say legal experts.  

The most important being whether investors or depositors in a collective investment scheme (CIS) qualify as financial creditors and whether the Insolvency Bankruptcy Code (IBC) can override all other regulations pertaining to recovery proceedings.

“It shall be crucial to note how the Supreme Court interprets the position of depositors and investors,” says Vidisha Krishan, partner, MV Kini.