Bombay HC warns Chidambaram, two bureaucrats in 63 Moons damages suit

Grants third extension for four weeks to file their written statements

The Bombay High Court on Friday warned former Union finance minister P Chidambaram and two bureaucrats, Ramesh Abhishek and K P Krishnan, that it would initiate ex-parte proceedings against them in the Rs 10,000 crore suit filed by 63 Moons Technologies (formerly Financial Technologies) for damages in the connection with National Spot Exchange (NSEL) payment default.

The warning came in the wake of their failure to a submit written submission for the second time in this case.

Hearing the case, Justice A K Menon granted the three an extension of four weeks to file their reply.

“Enough time has been given to file reply. If you fail to submit the written submission in four weeks, ex-parte proceedings would be initiated,” the court said.

The counsel appearing for Chidambaram argued, “The former finance minister was in jail (for over 100 days in a money laundering case). Hence, the instructions could not be taken from him to file the written submission. Therefore, some more time is required to file the reply.”

The counsel, however, said that no further extension would be sought to file the written submission. Counsels appearing for Abhishek, the former chairman of the Forward Markets Commission (FMC), the erstwhile commodity market regulator, and Krishnan also argued in favour of the extension.

“The court (Bombay HC) granted four weeks' extension to them to file their reply, saying that no further extension would be given,” said Vishwanathan Iyer, appearing for 63 Moons.

In February 2019, 63 Moons had filed a case for damages contending abuse of power by Chidambaram, Abhishek and Krishnan for perpetrating the NSEL payment default crisis, destroying the exchange ecosystem created by the company, causing huge damage to its shareholders, loss of employment, and halting income generation in the economy, in order to favour the competitor.

On October 22, the court had directed Chidambaram, Abhishek and Krishnan to file their written statements within eight weeks. It had also rejected the plea of Chidambaram’s counsel for further liberty saying that eight weeks period is enough to file the written statements.

Today, the three respondents failed to submit their written statements for the second time.

63 Moons believes that it has been targeted with malafide intent in the wake of the payment default crisis at one of its subsidiaries, the NSEL.

Despite the fact that no money trail has been traced to NSEL, 63 Moons and its founder were raided several times by multiple investigative agencies, including the Economic Offences Wing (EOW) of the Mumbai Police, the Enforcement Directorate, the Central Bureau of Investigation and the Serious Fraud Investigation Office (SFIO) in addition to the government of Maharashtra and the Centre.

63 Moons had also filed a case against Abhishek in the Madras High Court seeking a Central Vigilance Commission (CVC) probe into the matter.

The other case pending against him is the corruption probe by Lokpal. An eight-member Lokpal bench headed by former Supreme Court judge Pinaki Chandra Ghosh passed the order asking the CVC to submit the status report in respect of the complaints lodged by the company.

It is also contended that when Abhishek was FMC chairman, he misplaced the minutes of the meeting held on August 4, 2013 with stakeholders of now defunct NSEL exchange, including 24 defaulters, brokers and exchange management.