....The persons whose monies are lost, including the First Informant, are apparently, not the genuine traders for whom NSEL was supposed to provide a platform. The very fact that these persons are, as also the Investigating Agency is, freely using the terms as the 'investors', 'borrowers', indicates that, that the transactions in question were not genuine transactions of sale or purchase was well known to the so-called buyers also, who now choose to describe themselves as 'investors'. It is clear that from their point of view, it was only an investment yielding high returns for their money. These investors are not middle class or lower class people, but are themselves businessmen. The transactions in question were being entered through brokers who had knowledge of the commercial market. Going by the broad probabilities of the case, it cannot be accepted that the persons who are now crying foul, were not aware of the fact that their transactions were not genuine. They were looking at these transactions clearly as an investment of their monies yielding safe returns....

...In the first place, though this is termed as a 'scam of Rs.5600 crores by NSEL', it is not that monies have been received by NSEL, but they have gone from one bogus trader (investing) to another bogus trader (borrower)...

...It is almost conceded that there has been no material to show any direct connection or link between the defaulting borrowers and the applicant...

...Though the case has been projected as a 'scam of Rs.5600 crores', it needs to be kept in mind that these amounts have not been received by NSEL. As already observed, it is difficult to accept that the brokers and/or their clients for whom they were working were 'deceived' by the NSEL inasmuch as in all probability, the brokers and the investors were well aware that they were not entering into a genuine sale and purchase contract. When there is a clear and obvious possibility that these persons knew about the transactions, the 'deception' if any, caused to them cannot be said to have been caused by the nature of the transactions and, at the most, they can be said to have been misled by a propoganda that 'investing' money in those transactions, was safe. The money invested has not come to NSEL, but has gone to the borrowers. i.e. bogus sellers. It is the borrowers who have been benefited by the transactions and the money of 'investors' has gone to them. The names of 25 different companies who are the defaulters have been mentioned in the FIR itself. Thus, though projected a 'scam of Rs.5600 crores', the illgotten amount has not gone to the applicant, or for that matter, to NSEL. In fact, it is not the case of anyone...

...Sufficient time has already been given to the Investigating Agency and in spite of this, no link or connection between the proceeds of crime and the applicant, has been revealed so far...

...necessary to carry out audit of the investors, their trading members and that of NSEL who shall make available all relevant records in relation to the transaction done by them on the platform of NSEL”

The Hon. High Court Committee also observed that “...investigate such cases coming to their notice and must carry out audit of the account books, bank, accounts, income tax returns of the investors as well as all the relevant documents, account books, etc. of their brokers including that of NSEL in relation to the trading members and their clients.

The Committee makes it clear that in the event of failure on the part of Mr. Gagan Suri to remain present Committee shall have no option but to send the relevant documents along with his affidavit to the Income Tax Department with a request to investigate the matter. We hope the undertaking given by the Advocates would be complied with by Mr. Gagan Suri.

By way of last chance, at the request of the learned Advocate appearing for Yathuri Associates, time to comply with the earlier directions contained in the Order Sheet No. 65 dated 29th June, 2016 is granted. In case failure to comply with the directions issued by the next date of hearing, the Committee will be left with no other options but to bring to the notice of the Hon’ble High Court, the non-compliance of its directions with a request to initiate action against Yathuri Associate.