State Informs Bombay High Court: IIFL Properties will Be Attached in NSEL Scam Case within 4 Weeks

State Informs Bombay High Court: IIFL Properties will Be Attached in NSEL Scam Case within 4 Weeks

The Maharashtra government has notified the Bombay High Court of its intention to attach properties owned by commodities broker IIFL Commodities Limited, formerly known as India Infoline Commodities Ltd. (IICL), within the next four weeks. This move is in connection with the Rs. 5600 crore payment default case involving the National Spot Exchange Limited (NSEL).

A division bench consisting of Justice Revati Mohite Dere and Justice Manjusha Deshpande has summoned Anoop Kumar Singh, the Principal Secretary of the Department of Home, Maharashtra. This step was taken in response to the bench's dissatisfaction with the reply affidavit submitted in a writ petition filed by an investor.

The court was addressing a writ petition filed by investor Vishvanidhi Dalmia, who sought the attachment of properties belonging to IIFL, its promoters, and directors under the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act due to financial losses suffered by investors. Dalmia alleged that IICL enticed investors to invest in the NSEL platform, resulting in significant losses.

Vishvanidhi Dalmia's petition, representing an investor through IICL, revolves around the alleged financial irregularities and fraudulent practices associated with the Rs. 5600 crore NSEL scam. The scam surfaced in 2013 when NSEL failed to repay 13,000 trading clients, resulting in a payment default fraud of Rs. 5,600 crore. Brokers such as IICL have been accused of misselling NSEL contracts by promising assured returns without ensuring delivery. Last year, a special court in Mumbai initiated legal proceedings against the directors and promoters of India Infoline Commodities Ltd. (IICL), Anand Rathi Commodities Ltd. (ARCL), and Geojit Comtrade Ltd. (GCL) in connection with the NSEL scam.

The court also highlighted another instance of non-compliance with its order dated July 26, 2022, which was related to a previous writ petition filed by the same petitioner. Special Public Prosecutor Avinash Ahvad assured the court that appropriate steps would be taken by the authorities in response to the petitioner's representation to the Principal Secretary regarding the attachment of IICL's properties. Additionally, it was stated that the investigating officer would consider the mentioned properties and, after verification, would decide on the petitioner's representation.

On February 9, 2024, Ahvad requested an extension to submit a comprehensive affidavit-in-reply. The court granted a final extension of four weeks for filing and cautioned that failure to comply within this timeframe would lead to appropriate action against the principal secretary.

However, on March 12, 2024, Ahvad submitted a 1.5-page affidavit, which the court deemed insufficient. The affidavit mentioned that the state would issue a notification for the attachment of the necessary property of IIFL within three weeks after receiving a final decision from the court. The court remarked that this affidavit was "vague and far from comprehensive."

Consequently, the court summoned the Principal Secretary, Home Department, to appear before it the same day at 2:30 PM. Singh appeared before the court and assured that the state would issue notifications for the attachment of properties associated with IICL within four weeks, without waiting for the final decision in the ongoing petition.

The court accepted this assurance and decided to adjourn the matter to April 16, 2024, instructing that the notification regarding the attachment of properties be presented before them on the next date of hearing.