NSEL Investors Group v 63 Moon Technologies| Nobody's Case That Money Was Given For Deposit With An Obligation To Return: 63 Moon Technologies Tell Supreme Court

"It is nobody's case that money was given for Deposit with an obligation to return,'' 63 Moons Technologies told the Supreme Court in the SLP preferred by the State of Maharashtra and NSEL Investors Action Group assailing Bombay High Court's order of freeing attachment of assets of 63 Moons Technologies. The High Court bench of Justices Ranjit More and Bharati Dangre in the writ preferred by 63 Moons Technologies Ltd had also observed that National Spot Exchange Limited is not a financial establishment under the Maharashtra Protection of Depositors in Financial Establishments Act, 1999 ("MPID Act, 1999"). In the writ petition before the High Court, 63 Moons had challenged the constitutionality of Sections 4 and 5 of the MPID Act and the action of attachment of properties belonging to NSEL by issuing notifications after invoking provisions of MPID Act. The submissions were made before the bench of Justices DY Chandrachud, Surya Kant and Bela M Trivedi. In the hearing today before a bench of Justices DY Chandrachud, Surya Kant and Bela Trivedi, submissions were made by the Senior Advocate(s) Mukul Rohatgi and AM Singhvi. Nobody's Case That Money Was Given For Deposit With Obligation To Return; If Supreme Court Has Not Examined Single Provision Of MPID Act It Is Incorrect To Say That It Will Close Forever Posterity To Challenge The Provision Of The Act: Senior Advocate Mukul Rohatgi Appearing for 63 Moons Technologies, promoter of NSEL (which is now defunct), Senior Advocate Mukul Rohatgi commenced his submissions by apprising the bench with regards to the functioning of the commodity stock exchange. "So Commodity Exchange is an exchange where people buy commodities its like a Mandi. Now this was running- it's very much in pari materia like stock exchange. Commodity exchange is a platform where there are buyers and sellers of commodities. Transaction where buyer will pay and seller will give the goods. Huge quantity of goods in accredited warehouses. Money goes from the buyer through his broker. Money is not retained by me at all. Goods are in the warehouse showing kilos of dal. That receipt is given to the buyer and that constitutes transfer of title. My job is to facilitate sales like the sale of shares," submitted Senior Counsel. Against this backdrop, Senior Counsel submitted that the issue before the Court was whether NSEL was covered under the provisions of MPID Act and within the definition of Financial Establishment under the Act. Explaining the meaning of the term "Deposit", he further argued that NSEL neither received any deposits nor issued any promise to the customers to get interest on money on making deposits. Rohatgi contended that, "I don't receive any deposits and do not issue any promise that you give me money for 1 year or 2 year and you'll get the interest. Deposit means something which is to be returned. Deposit to the party obliges the party to keep that and return. When money is given to the bank it has complete dominion. In that 1 year the dominion is with the bank and the bank can give the money to someone else. In my case, it is nobody's case that I take any deposit with the promise of return. I get commission out of this business." Referring to K.K. Baskaran Vs. State represented by its Secretary, Tamil Nadu and Ors wherein the Supreme Court while deciding the legislative competence of Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act, 1997 had also said that the State Legislature had competence to enact the MPID Act too, Senior Counsel submitted that if the Top Court had not even examined a single provision of the MPID Act, it would be incorrect to say that it would close forever the posterity to challenge the provisions of MPID Act. "It was not seen by the SC that provisions of 2 acts are very diff. When appeal came from the TN case, the SC reversed it by saying that there is legislative competence. The Supreme Court said legislative competence is there. In the course of the judgment it said that Bombay and Tamil Nadu Act are pari materia. If the Supreme Court has not examined a single provision of my act it is incorrect to say that it will close forever the posterity to challenge the provision of the act. There are traders who engage brokers on both sides. They are not investors in that sense," he averred. In this regard he also contended that the Court in Tamil Nadu's case was only concerned with the issue of legislative competence and there was no way that challenges in future to certain provisions if not examined by any other court are liable to be examined by constitutional court and this cannot be curtains drawn against me. "1 question still remains, alternative remedy or not alternative remedy. Provisions that I wish to challenge, I cannot be foreclosed in challenging it," argued Rohatgi. He further contended that NSEL was a real...

NSEL Investors Group v 63 Moon Technologies| Nobody's Case That Money Was Given For Deposit With An Obligation To Return: 63 Moon Technologies Tell Supreme Court

Shruti Kakkar

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