NCLT Approval To Settlement Scheme Does Not Dilute Criminal Charges: Bombay High Court Clarifies In NSEL Scam

The Bombay High Court earlier this month made it clear to Jignesh Shah and his owned 63 Moons Technologies Limited, accused in the multicore National Spot Exchange Limited (NSEL) Scam, that just because the National Companies Law Tribunal (NCLT) approved its One Time Settlement (OTS) for 5,682 traders, will not exonerate them from the pending criminal cases.

A division bench of Justice Ajay Gadkari and Justice Kamal Khata in their 8-page order dated March 9 but uploaded on March 26, stated that the criminal cases being investigated by the Enforcement Directorate (ED) and other agencies against the Shah and his companies, would continue to stand.

"We reiterate that although the NCLT has clarified the legal position in unequivocal terms, the lifting of attachment over the assets in question and the consequent disbursement of amounts to the investors/victims shall in no manner be construed as dilution of criminal charges against the accused persons in the present crime. The criminal prosecution shall proceed independently and will be taken to its logical end as expeditiously as possible by all prosecuting agencies," the bench made it clear.

The bench was seized with an appeal filed by 63 Moons Technologies Ltd company and another writ filed by Shah, both challenging an order of an Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) on September 17, 2019 by which it ordered the petitioners to furnish an indemnity bond of Rs 1095 crores along with an undertaking that, if upon the conclusion of the trial and final adjudication it is found that the attached movable property constitutes proceeds of crime, they would deposit the said amount with the ED.

A separate appeal was filed by the ED challenging the order to the extent where it permitted to release the attachment of properties.

However, during the course of hearing, Additional Solicitor General (ASG) Anil Singh, as the bench recorded, "in his usual fairness" informed the bench that the NCLT had on November 28, 2025 passed an order, approving the OTS offered by Shah. He informed the judges that the NCLT too has ordered lifting of attachment (releasing) of the properties subject to the accused paying the requisite amounts to around 5,682 traders.

The ASG however, highlighted the fact that in the OTS Scheme, the accused have clearly stated, that once they repay the amounts to the investors, they would seek discharge from the criminal cases.

The judges, while acknowledging the 'plight of investors' the ultimate victims of the scam, however, made it clear that just because the OTS has been approved, the accused cannot seek exoneration, even indirectly.

"Prima facie, it appears that through the mechanism of settlement, the accused persons are attempting, albeit indirectly, to secure exoneration from the alleged offences by which several unsuspecting investors appear to have been duped. We are unable to countenance such a course. The offences alleged are serious in nature and must be taken to their logical conclusion before a competent Criminal Court. In our view, a Civil Court (NCLT) cannot determine or dilute the consequences of criminal prosecution by incorporating or accepting any covenant in a scheme or agreement executed between the parties by consent," the judges opined.

With these observations, the bench disposed of the proceedings while clarifying that the lifting of attachment and settlement would not dilute the criminal charges and that the prosecution against the accused persons would continue independently.

Notably, the NSEL Scam was a major financial crisis in 2013 where the National Spot Exchange Limited (NSEL) allowed trading contracts that were not backed by actual commodities, leading to a payment default of over ₹5,500 crore. Thousands of investors lost money when borrowers failed to repay. Investigations later alleged fraud, collusion, and regulatory violations involving brokers, companies, and exchange officials.

Appearance:

Senior Advocate Vikram Nankani along with Advocates Rahul Sarda, Vrushabh Vig, Vikrant Nalavade and Priyam Sharma instructed by M/s. Crawford Bayley & Co. appeared for 63 Moons Technologies Ltd.

Advocates Arvind Lakhawat and Abhijeet Marathe appeared for Jignesh Shah.

Senior Advocate Chetan Kapadia along with Advocate Siddharth Puthoor instructed by Mehta & Padmasey represented the NSEL Investors Forum.

Additional Public Prosecutor Prajakta Shinde represented the State.

Additional Solicitor General Anil Singh assisted by Advocates Chaitanya Pendse, Aditya Thakkar, Rajdatt Nagre, Krishnakant Deshmukh, Aadarsh Vyas and Rama Gupta represented the ED.

Case Title: M/s 63 Moons Technologies Limited vs Union of India (Criminal Appeal 1351 of 2019)

Citation: 2026 LiveLaw (Bom) 147

Click Here To Read/Download Judgment