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

The National Company Law Tribunal (NCLT) Mumbai Bench has approved a ₹1,950 crore one-time settlement (OTS) scheme proposed by National Spot Exchange Limited (NSEL) to resolve long-pending claims of over 5,600 investors arising from the 2013 ₹5,400 crore payment default.

A Bench of Judicial Member Sushil Mahadeorao Kochey and Technical Member Prabhat Kumar sanctioned the composite scheme of arrangement under Sections 230–232 of the Companies Act, 2013, holding that it had overwhelming creditor support and did not violate public policy.

NSEL, which operated an electronic commodity trading platform, suspended trading in July 2013 following directions from the Department of Consumer Affairs.

Subsequently, twenty-four members failed to meet their pay-in obligations on paired contracts. Twenty-two were declared defaulters while two made payments. The resulting shortfall amounted to ₹5,402.71 crore.

Investigation and proceedings were initiated by multiple authorities, including the Economic Offences Wing (EOW), Enforcement Directorate (ED), Serious Fraud Investigation Office (SFIO) and other agencies. Criminal and civil actions also commenced before courts and statutory bodies along with proceedings under the Maharashtra Protection of Interest of Depositors Act (MPID) and Prevention of Money Laundering Act (PMLA).

Earlier settlement mechanisms, including an internal settlement guarantee fund and a 30-week structured settlement plan announced in August 2013, resulted in limited recovery. Warehouse inspections later indicated that significant quantities of underlying commodities were unavailable or overstated.

Discussions between NSEL, its holding company 63 Moons Technologies, and the NSEL Investors Forum (NIF) led to an OTS proposal in December 2024. As per NIF’s poll, 3,088 creditors representing claims of ₹2,951.85 crore (64.11% in value) consented. The Boards of NSEL and 63 Moons approved the scheme on February 18, 2025.

Pursuant to NCLT directions, a creditors’ meeting was held through postal ballot and e-voting took place between April 17 and May 17, 2025.

• 91.35% by value voted in favour;

• 92% by number voted in favour;

• Total Specified Creditors: 5,682;

• Total outstanding claims (31 July 2024): ₹4,650 crore

The scheme guarantees payment of a minimum of 41.94% of each creditor’s reconciled claim.

Under the approved settlement scheme, a sum of ₹1,950 crore will be placed in an escrow account managed under the supervision of retired Justice SC Gupte who has been appointed as the monitoring authority. The amount will be distributed to specified creditors in accordance with the terms set out in the Scheme.

Once the settlement is completed, all claims of specified creditors will stand assigned to 63 Moons Technologies in line with the assignment and subrogation framework incorporated into the Scheme. This includes all rights related to civil proceedings, arbitration, and recoveries arising out of the 2013 default.

The scheme further provides that “consenting brokers” are required to contribute the brokerage earned on trades executed through the NSEL platform. These brokerage amounts must be certified by the respective statutory auditors of such brokers.

Specified creditors, after receiving their settlement payments, are required to withdraw all civil proceedings related to the NSEL default and are barred from initiating further civil or criminal proceedings on those claims. This obligation applies only to creditor-initiated actions and does not bind the State or investigative authorities.

Any request for release, lifting or utilisation of properties attached under the MPID Act or PMLA must be made before the competent courts or authorities. The scheme does not mandate automatic release of attached assets.

The NCLT clarified that criminal proceedings initiated by the State or statutory authorities will continue unless quashed or compounded by the respective criminal courts. The scheme itself does not result in withdrawal or termination of such proceeding

Though the Enforcement Directorate, MPID Competent Authority, the Serious Fraud Investigation Office (SFIO) and several individual intervenors raised certain objections to the scheme, the NCLT found that the statutory procedures under Sections 230–232 of the Companies Act had been followed.

It also noted that the scheme had secured the approval of the requisite majority of creditors and that provisions relating to civil compromise, assignment of claims, and withdrawal of creditor-initiated actions were permissible under the Companies Act.

Accordingly, it sanctioned the scheme.