Recovery from Defaulters
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In the Final Merger order, it has been acknowledged that the monies are to be
recovered from the defaulters. If that is so, then it is difficult to fathom what
purpose would be served by amalgamating NSEL with FTIL instead of pursuing the
defaulters. The answer comes in the Final Order, which states that the merger is
aimed at speedy recovery of dues from the defaulters by utilising FTIL’s resources.
Well, if that is the sole objective then the merger is not the right solution.
Further, although the Final Order has failed to demonstrate how merging NSEL with FTIL
will achieve the recovery of dues since even the resulting merged entity will continue
to pursue recovery suits against the defaulters. Currently, NSEL is anyways pursuing
the same with the full financial support of FTIL for legal expenses.
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| Recovery Process by NSEl |
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| When the merger was being forced on FTIL to ensure recovery from 22 defaulters, the MCA should
have considered that Rs. 542 crore has already been paid off. It is incorrect to state that the
process of recovery of dues by NSEL is very slow. There have been several positive developments in
the last two years, which establish that NSEL’s recovery has been speedy and efficient; for instance: |
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1
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NSEL has been successful in obtaining decrees on admission against five defaulters
from the Hon. Bombay High Court, to the tune of Rs 1,233.02 Cr |
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2* |
NSEL successfully obtained injunctions against the assets of 18 defaulters from the Hon. Bombay High Court in respect of claims of Rs 4,515.93 Cr |
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3* |
A significant part of the entire claim has therefore, been secured and Rs 542.99 Cr is
already paid by NSEL |
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4* |
The Economic Offences Wing has attached assets worth more than Rs 6,000 Cr
belonging to defaulters |
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5
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The Enforcement Directorate also attached the assets of defaulters worth Rs 837.01
Cr on the basis of the money trail |
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6
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In view of the foregoing, more than 100% of the claims of the traders are secured by
way of decree, attachments & injunctions against the defaulters |
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| #Source: Merger order dated February 12, 2016 |
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| Special Team of Secretaries (STS) |
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| The Government of India had appointed a Special Team of Secretaries (STS) on August 26, 2013 to
examine the violation of laws and regulations by NSEL/any associated companies/ any of the
participants and also to suggest measures that could be taken to ensure that there is no systemic
impact of NSEL developments. The Committee submitted its Report on September 23, 2013. Issues
highlighted in the Report are being investigated by the concerned agencies/departments, the
progress of which is regularly monitored through meetings under the Chairmanship of Secretary,
Department of Economic Affairs (DEA) and Ministry of Finance. |
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| Advice from STS |
- On May 12, 2016, the STS, reviewed the action taken and
progress made by various agencies on the
recommendations made by the STS. During the meeting,
the Government of Maharashtra was advised to take
immediate action for:
- Auctioning the properties which do not have any
encumbrance/have approval of the Court
- Actively pursue with the MPID court to obtain early orders
for auctioning of the remaining attached properties
- To appoint a Senior Advocate for this purpose
- To have the progress of the cases reviewed by the Home
Secretary, Government of Maharashtra on fortnightly basis.
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