Mumbai Court summons new accused in NSEL payment default case

A Mumbai Court on May 18 issued summons to directors of India Infoline Commodities Ltd (IICL), Anand Rathi Commodities Ltd (ARCL) and Geojit Comtrade Ltd (GCL) after adding them as accused in the National Spot Exchange Ltd. (NSEL) payment default crisis..A special court under the Maharashtra Protection of Interest of Depositors (MPID) Act issued process to Nirmal Jain (director of IICL), Preeti Gupta, Rupkishore Bhutada and Anand Rathi (director and promoter of ARCL) and Shiney George and Manish Gupta (director and promoter of GCL).The court directed the accused to be present before it on June 20, 2023. With this order, all the accused persons will face trial in the NSEL case..The order was passed on an application filed by NSEL seeking to arraign the six persons as accused in the case. A separate application was also filed by an individual trader whose broker was IICL.After examining the material, the special judge observed that the persons sought to be arraigned in the case at the relevant time, appeared to be in charge and control of business of accused broker companies. “At least against the said persons and their personal wrongdoings on behalf of the companies' in my considered opinion cognizance required to be taken. The aforesaid person appear to be present in the respective board as directors of companies wherein the decision was taken to become members of NSEL,” special judge AS Sayyad held..The Court also questioned the investigation saying selective probe would affect the faith of the victims. “The present matter pertains to economic offence of huge magnitude of Rs 5,600 Crores and several gullible investors are still awaiting the justice. However, such selected investigation and final report raises serious question about the impartial investigation of EOW, betrays the faith of victims. In view of the facts and circumstances as discussed above, the responsible persons for the wrongdoings should not be allowed to escape the process of law” the 63-page order emphasized..The case started in 2014 on a complaint by an investor who claimed that he was cheated of a huge amount. In 2012-13, an investor invested a huge amount with a broker who misrepresented that NSEL is extremely safe risk free and icould fetch 15-18% guaranteed returns per annum.After the default at NSEL platform in June 2013, one investor filed a complaint and an FIR was registered under the MPID Act. After a detailed investigation lasting 9 years, the Economic Offences Wing (EOW) filed 11 chargesheets. On February 27, 2018, in a supplementary chargesheet, IICL and its director Chintan Modi were arrayed as accused on the ground that the company had lured and taken deposits from unsuspecting clients.Similarly, ARCL and GCL and its directors were arrayed as accused on the ground that the said companies lured and took deposits from unsuspecting clients by promising guaranteed rate of the returns and therefore, defaulted in repayment of such deposits. .The newly added accused will now face trial in the 2014 MPID case as and when it begins. .Advocate Rahul Arote appeared for trader. Advocates Arvind Lakhawat, Nimeet Sharma and Jalpa Shah briefed by MZM Legal LLP appeared for NSEL. Special public prosecutor Sunil Gonsalves appeared for EOW. [Read order]