HC approves settlement between NSEL, traders, refuses to end criminal cases

The case goes back to October 2013, when NSEL and others were accused of cheating around 13,000 investors of about ₹5,600 crore. The fraud centred around a trading platform where brokers mis-sold products and falsified KYC documents to dupe investors

MUMBAI: The Bombay High Court has approved a settlement between National Spot Exchange Ltd (NSEL) and its traders who lost money in the 2013 NSEL fraud. The 5,682 traders will receive ₹1,950 crore and the payout will be made in proportion to their dues as of July 31, 2024.

HC approves settlement between NSEL, traders, refuses to end criminal cases

The case goes back to October 2013, when NSEL and others were accused of cheating around 13,000 investors of about ₹5,600 crore. The fraud centred around a trading platform where brokers mis-sold products and falsified KYC documents to dupe investors. The ED later began a money laundering probe, filed charge-sheets against 148 accused persons, and attached assets worth over ₹3,400 crore in the case.

The division bench of justices AS Gadkari and Kamal Khata ordered the central and the state authorities to take steps to implement the settlement including releasing the properties attached by investigating agencies during their probes. However, the court rejected a clause in the agreement that sought to close criminal cases related to the 2013 fraud.

The order came on a plea filed last year by NSEL’s parent company, 63 Moons Technologies, in its pending appeal challenging a September 17, 2019 order of the Appellate Tribunal dealing with cases related to economic offences under the SAFEMA (Smugglers and Foreign Exchange Manipulators Act, 1976), FEMA (Foreign Exchange Management Act, 1999), NDPS (Narcotic Drugs and Psychotropic Substances Act, 1985), PMLA (Prevention of Money Laundering Act, 2002), and PBPT Act (Prohibition of Benami Property Transactions Act, 1988).

The Appellate Tribunal had earlier lifted the attachment on certain properties after the company furnished a bond of ₹1,095.27 crore. It also said that if, at the end of the trial, the properties were found to be proceeds of crime, it would deposit the amount with the Enforcement Directorate (ED).

In the plea, the company stated that it had approached the National Company Law Tribunal (NCLT), after arriving at a settlement with the traders and the Mumbai bench of the NCLT had on November 28, 2025, approved the arrangement. NSEL had earlier paid a sum of ₹179 crore to 7,053 smaller traders who had investments of less than ₹10 lakh each.

The company also informed the court that former Bombay High Court judge SC Gupte has been appointed by the NCLT to monitor the distribution of the settlement amount to the traders.

Before the NCLT, the ED had opposed the settlement, arguing that ₹1,950 crore was too low compared to the ₹3,433 crore worth of assets it had attached in the case. However, before the high court, the agency said it had “no serious objection” to implementing the NCLT-approved scheme.

While approving the settlement, the high court noted “the plight of the thousands of investors, who are the ultimate victims of the alleged crime”. However, the court rejected a part of the settlement that tried to force traders to withdraw criminal complaints against NSEL and its officials.

The judges said it appeared that through the mechanism of settlement, the accused were attempting to secure exoneration from the alleged offences by which several unsuspecting investors appear to have been duped. “The offences alleged are serious in nature and must be taken to their logical conclusion,” the bench said.

It clarified that the lifting of attachment and the consequent disbursement of amounts to the traders, shall in no manner be construed as dilution of criminal charges. “The criminal prosecution shall proceed independently and be taken to its logical end as expeditiously as possible by all prosecuting agencies,” the court added.