NCLT Approves ₹1,950-Crore One-Time Settlement Scheme For NSEL Investors

The move is significant as it will revive investor trust and confidence. The process could face a further roadblock only in case any party decides to oppose, which, at this point, looks unlikely.

The NCLT verdict, delivered by a Bench comprising Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar, is a step towards the closure of the 2013 NSEL default case, a commodity market crisis involving a default of ₹5,402.71 crore by 24 trading members.

"We have perused the submissions made by the petitioner companies and the report submitted by all the applicable regulators. From the material on record, the scheme appears to be fair and reasonable, and is not in violation of any provisions of law and not contrary to public policy,’’ NCLT said in its order.

Need For Timely Intervention 

Sumit Nagpal, senior lawyer, told The Secretariat, "While one can welcome the long-overdue relief to over 5,600 investors, the development also underscores the need for improving the mechanism for resolving financial frauds and the recovery ecosystem in India. Twelve years and five months to recover less than 40% of the principal, that too without any interest component, is an example of the challenges one has to face to get justice in economic-offence litigation and the practical difficulties of liquidating attached assets."

"The investors now have the liquidity and closure; the defaulters and the larger question of accountability remain in limbo. Even after a decade of reforms, we still see that victims have to choose between the indefinite wait for full justice and a heavily discounted settlement scheme, and this case is no exception. As India is looking forward to becoming one of the top economies of the world, the recovery process has to be strengthened. Without the smooth and quick recovery process, global investors will not have much confidence, and India needs to take this on priority," he further said. 

The Backstage

The NSEL, with the support of its parent company, 63 Moons Technologies Ltd., had filed a Scheme of Settlement before the NCLT, Mumbai, for a one-time full and final settlement with 5,682 traders. The Scheme of Settlement was put to a vote by the NCLT, wherein a whopping 92.81% of traders in number and 91.35% in value voted in favour of one-time settlement.

The NSEL stated that the settlement scheme envisages payment of ₹1,950 crore to 5,682 traders, in proportion to their outstanding, as on July 31, 2024, against the closure of legal cases against the group, along with the assignment of all rights of traders in favour of 63 Moons.

Relief To Small Traders

Back in August 2013, NSEL, with the support of 63 Moons, had paid around ₹179 crores, thereby giving relief to 7,053 small traders with outstanding of less than ₹10 lakh. 63 Moons once again stood up for the cause of traders despite no money trail to NSEL, 63 Moons, and its promoters. This decision would bring major relief for the traders whose money was stuck in the NSEL payment crisis that happened in July 2013.

“This would not have been possible without the positive approach of the BJP government in resolving the crisis,” said Neeraj Sharma, MD&CEO, NSEL.

The payout will be made through an escrow account managed by Universal Trusteeship Services Ltd., under the supervision of Justice SC 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.

Sharad Kumar Saraf, Chairman of NSEL Investors’ Forum (NIF), expressed his gratitude for the efforts taken by 63 Moons and NSEL, along with support from the Central and State governments.