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In the class action suit filed by Modern India against National Spot Exchange (NSEL), the high court here on Tuesday constituted a committee headed by retired judge V C Daga to liquidate the assets of 22 NSEL borrowers. The committee will also have a chartered accountant, Yogesh Thar, and senior advocate J S Solomon as members.
The case follows default by NSEL to the tune of Rs 5,574 crore a year ago and 13,000 investors got stuck, Modern India being one of them.
The committee will have to work in coordination with Forward Markets Commission (FMC). The committee can also call for records of settlements between the borrowers and NSEL before this committee was formed.
While the economic offences wing of Mumbai Police has attached the assets of all borrowers, FMC has also asked NSEL to file civil suits against all of them. In the Modern India case, the high court is also active in taking measures to recover money from borrowers; the Daga committee will do the same.
On Tuesday, judge S C Gupta issued an order saying the committee should seek permission from the court to gain access to the assets and when the committee wants to distribute money, it will should prepare a report and send it to FMC with the court's permission.
The committee is also empowered to ascertain the outstanding liability of the borrowers and it can carry out forensic audit on those companies. The court also said before any settlement is made between borrowers and NSEL, it will have to give a notice to the FMC and the court and that the committee’s decision can be challenged in court.
