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63 Moons Tech spurts after favorable court judgment

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63 Moons Technologies hit an upper circuit of 10% at 115.50 at 13:09 IST after the company won Maharashtra Protection of Interest of Depositors case in Bombay High Court.

On the BSE, 41,053 shares were traded in the counter so far compared with average daily volumes of 31,000 shares in the past two weeks.

The Bombay High Court on 22 August 2019 ruled that the National Spot Exchange (NSEL), is not a financial establishment and hence notifications for attachment of the company's assets including bank accounts and properties under the MPID Act stand quashed. The Competent Authority requested for a stay. However, the High Court declined.

The Bombay High Court has quashed all the notifications issued by the State Government in the year 2016 and 2018 attaching movable and immovable properties of 63 moons under the MPID Act, 1999 by observing that NSEL is not a Financial Establishment since it did not accept any deposits as defined under the MPID Act and resultantly, the petitioner who is a promoter of the said establishment cannot be proceeded under the provisions of MPID Act.

The court held that NSEL was a commodities exchange where commodities were traded between willing buyers and sellers acting through their brokers. The court noted that the State and the investigating agencies have simply assumed and proceeded on the basis that NSEL acted as Financial Establishment without verifying this jurisdictional fact before attaching properties of 63 moons. Further, the court also noted that after going through the documents, it leaves no doubt in our mind that the transaction was between buyer and seller through medium of NSEL; and the court is satisfied that the NSEL has not accepted any deposit and if it has not accepted any deposit, then it would not fall within the definition of 'financial establishment'.

In 2016, the Economic Offences Wing (EOW) of Mumbai police attached assets worth Rs 7,063 crore belonging to Financial Technologies India (FTIL), owned and founded by Jignesh Shah. The developments followed Shah's recent arrest by Enforcement Directorate (ED) in connection with the Rs 6,000 crore scam at National Spot Exchange (NSEL), which is owned by FTIL. The ED said it had collected evidence of money-laundering against Shah, and he was remanded in judicial custody by a Special PMLA (Prevention of Money Laundering Act) court.

On a consolidated basis, 63 Moons Technologies reported a net loss of Rs 11.10 crore in Q1 June 2019 over a net loss of Rs 8.55 crore in Q1 June 2018. Net sales fell 6.5% to Rs 64.26 crore in Q1 June 2019 over Q1 June 2018.

63 moons Technologies (formerly FTIL) is in the business of developing and selling technology products for facilitating trading on exchanges such as stock and commodity exchanges

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, August 23 2019. 13:13 IST