 "Gavel")
The Maharashtra Protection of Interest of Depositors (MPID) court on Monday expressed displeasure over the delay in liquidation of properties attached by various authorities over the Rs 5,600-crore payment crisis at National Spot Exchange Ltd (NSEL).
Hearing the case, Judge D P Surana asked the competent authority — represented by Ajit Sakhare, deputy collector — “Why has the authority not made any progress since the order was passed for liquidation of some attached properties over a month ago?”
In August 2013, NSEL had declared 24 borrowers as defaulters as it suspended operations. On the NSEL’s complaints, the economic offences wing attached the properties of borrowers under the MPID Act. After a property is attached, it is transferred to the competent authority, which must auction it and distribute the funds raised among those who lost money.
The court had passed an order in September allowing the authority to liquidate the properties of Rajesh Mehta of Swastik Overseas Corporation. But no action has been taken yet. The valuation of the properties is yet to be worked out.
Of its payment obligation of Rs 102.98 crore, Swastik Overseas Corporation has paid Rs 12.18 crore. The economic offences wing and the crime investigation department, Mumbai, have attached Mehta’s properties in Gujarat.
NSEL alleged Mehta was not cooperating with inspection of the properties for valuation. The court warned Mehta to cooperate.
The court sought help from NSEL and groups representing NSEL investors to arrive at a valuation based on ready reckoner rates of the state government. The court ordered the competent authority to comply with its order and file a report in one month.
In another case related to the NSEL payment crisis, the court ordered the competent authority to take control of five immovable properties owned by Narayanam Nageswara Rao, managing director of NCS Sugars, a Hyderabad-based company that owes Rs 51 crore to NSEL. Rao’s counsel admitted to having found buyers for properties for which sale consents had been obtained. Of its obligation of Rs 58.85 crore, NCS Sugars has paid Rs 7.85 crore.
Swastik Overseas Corporation had entered into an agreement with NSEL to settle its dues. But NSEL said Swastik Overseas Corporation had failed to honour the conditions agreed in the settlement agreement.
The court ordered the competent authority to liquidate the entire attached properties of NCS Sugars and deposit Rs 50 crore, the amount agreed by NSEL and NCS Sugars, in an escrow account and the excess amount in a bank as a fixed deposit that could be obtained by either party on the court’s orders.
In the case of Gagan Suri, proprietor of Yathuri Associates, the court ordered the authority to proceed with liquidation of his attached properties and report back in one month. Yathuri Associates, along with its group companies, has a payment obligation of Rs 640 crore. The estimated value of the attached properties is Rs 300 crore.
Various other cases of defaulters came up for hearing on Monday and Justice Surana ordered the competent authority to expedite liquidation of attached properties.
