This document summarizes the minutes of a meeting to review progress on investigations into the payment crisis at the National Spot Exchange Limited (NSEL). The Enforcement Directorate of Mumbai Police provided an update, stating that 28 properties have been made absolute and are ready for auction, with hearings ongoing for 159 objections. Repaying 6445 investors with claims between Rs. 2-10 lakhs is pending approval from the High Court Committee. The Chairman suggested expediting the valuation and auction of attached properties, as well as making absolute seized liquid assets worth Rs. 1976 crores, to speed recovery and refunds to investors. Approaching government departments to assess interest in an attached Delhi property was also proposed.

1. Depart��-�-t-o"r Economic Affairs
-Financial Markets Division
CD Section
-----
ETING ON THE
MINUTES OF THE NINETEENTH REVIEW ME
OF THE STS ON
IMPLEMENTATION OF THE RECOMMENDATIONS
RMAffSHIP OF
NSEL ISSUE HELD UNDER THE CHAI
NEW DELHI
SECRETARY(EA) IN ROOM N0.131-A, NORTH BLOCK,
AT 4.30 P.M. ON 16/02/2018.
. . t shri Su bhash
After a brief self-introduction by the participan s,
b t
Chandra Garg, Chairman welcomed all the participants and se
_
t a �u
th
•·
th • t· ting agencies WIreviewing the progress made by each of e mves iga
. .
. regard to their investigations into the NSEL payment cnsis.
2. Shri Ashu tosh Dumbare, Joint Commissioner, EoW, Mumbai
Poli� made a presentation on the progress of enforcement actions �t
their end. The progress· with respect to recovery efrorts, as on date, 1s
as follows:
✓ �operties Seized: Approx Rs.
.
8167.31 Crores, total 755
Properties, 46 Brand and 28 Vehicles
J. Properties made absolute: 35
/ Properties auctioned: 6
/ Amount realised from auctione� properties; 1.73 crore
/ Amount disbursed to the in��-
st�r� : �s. 527.19 Crores
/Tot'al number of investors fully paid : 608
3. He informed that in compliance with the directions contained in
the minutes of the previous Review Meeting, they have categorized the
list of all attached properties as 5 Start 4 Star, 3 Star, 2 Star and 1
Star (depending on the level of resistance), and action to auction the
properties which have already been made absolute is being taken on
prionty and vigorous efforts are also being made, to have as many
properties as possiblt,__made absolute. The proceedings to this extent
in the MPID Court are moving in the right direction at brisk pace. Six
properties now stand disposed of and have fetched Rs. l.73 crores. Animportant order has been obtained from the MPID Court on31/01/2018 which h�.t:Lpa.ve� the way for making absolute 542 moreproperties and it is.e!.(p.ected tbat around Rs 20 crate may be received

2. 'ning· properties is under
t. the re111a1. th Efforts to auc ion
m a mon .
ed shortly.
way and would be complet
. t Bikaner and Delhi, Shri
4. As regards the attached propertl
_
es a
to their auction have
Ashutosh Du.mbare informed that all hm'.11'an
h
ces
been issued and even
d bl' tice for auction as
been cleared an a pu ic no
d t d The base price
a meeting with interested parties has been con uc e .
d R 164
for these properties has been fixed at Rs.26.40 c:ores
:; f
s.
crores respectively. These properties will also be dispo
_
se O soon.
5. He has, further, informed that 85 additional bank accounts of
the beneficiaries have been frozen and a proposal to attach these
accounts as well as 5.15 crore shares has been sent to the competent
authority. It was suggested that disposal of shares and such liquid
assets can fetch around 2000 crore in a short period of time.
Chairman suggested that EoW should expeditiously get the seized
liquid assets made absolute as these would not involve any
auctioning process.
6. The Chairman remarked that so far only 608 investors
whose claims were less than Rs.2 lac have been fully paid back.
EoW should expedite the auctionin& process and arrange to pay
back on priority all those 6445 investors whose claims fall
between 2 lac and 10 lac as these investors constitute a major
chunk of the total number of investors·, Sbri Ash¼tosh Dumbare
stated that an amount of Rs.163 crores would be required in order to
pay off all the p�nding claims falling in the category of 2-10 lac, and
expressed confidence that this would be achieved within next
couple of months.
7. As regards arresting the two accused viz. Shri Daljeet Singh and. .Shri Jaspal Singh of Sirsa, Haryana (M/s.Namdhari Group) who are
still at large, Shri Ashutosh Oum.bare informed that EoW team could
not be sent to Sirsa after December '17 as the team has been busy
with verification of the title of the properties, -which are spread across
17 States. Now more th�f the title verification work is -over.
The team will be sent to Sina �r�gularly in search of these
accused. The Chairman has remarked that EoW should take the
matter to the notice of their. -DGP .:a.iid see to it that a letter is
issued from DGP, Ma��tra �o DGP, Haryana for immediate
. . . �·;, ..
' :

3. 1
d·t t:n�.u
.. , arrest of the accused. Simultaneously EoW should expe
t
e
l ·ined
{forts to get th
·· '
d proc ate ese accused persons ·declare a
s t to
offender� through the court. He also requested. IT Depart
Jll
e
n
s
offer their help in investigation.
8· Furiliennore; Shri Ashutosh Dumbare, JC, EoW raised the issue
of overlapping jurisdiction vis-a-vis the Enforcement Directorate and
informed that out of the properties attached by EoW, overlapping of
attachment orders by ED under PML Act has occurred in the case of
67 properties. Shri Ashutosh Dumbare stated that things are going
very smoothly in the Special MPID court and it will be· easier and
quicker to settle the claims of the investors through MPID court than
through PMLA even though powers under PMLA are wider. Sh
_
ri
Sanjay Lawania, JD, ED informed that a proposal to amend Section 8
of the PML Act in order to allow, inter alia, the Special Court to
consider the claims of the claimant for the purpose of restoration of
seized properties even during trial is currently under consideration of
the ED. Concurring in the opinion of the EoW, the Chairman
remarked that the ultimate objective of the Government is to
ensure that all the investors in this case are paid back the·
money, and asked the Enforcement Directorate to explore the
feasibility of giving precedence to the claim of EoW Mumbai ..
Police, on these 67 commonly attached properties for further
necessary action.
9. At this point of deliberations, Shri Amit Pradhan, CGM, SEBI
mentioned that there·is �eady an established ruling of the ·Supreme
Court in a PACL collective investment scheme matter wherein the
Hon'ble Court has ,, lj�ta that recovery of the investment lost by
investors and its repayipent shall outweigh all other concerns of the·
.., Government in t!1,es-ds of cases. The Chairman opined that. the
same should hold good in the case of the crime proceeds· of Rs.54 .
: crores seized by"'tlie Income Tax Department from the defaulter·
accused fiij_n. -yiz.M./s.Mohan ·India Pvt. Ltd. At this point, Shri
1
S.K.Singh,. e'IT (Investigation), CBDT informed that the Special MPID
«:-. , ½:'. �
court . has already ordered recovery of Rs.54 crores from IT
Deparbftent. ··However, the IT Department has filed an appeal �
Bombay High Court against th& MPID court's order and t�e CaAe'"lS
scheduled to be heard on O1/03/ 18. Around Rs 470 Crore-is due to
h Ch . n advised the. ,
the IT Department. In vie� of the above, t e airma
:. .

4. h strength of the
�"- on t e
1 to p.i;:,� eeJdng return
uest/proposa
d to above, s
to the
EoW to send their req
t's ruling referre
d IT Departlllent
Hon'ble supreme cour
d by the ED an
..n Account to the
d seiZe L E5cro- - g· h
of the crime procee s
ount or NSE
stors through ig
Competent authority's ace
ded genuine inve
.1,-gty share the
wring the defrau accoruµ..
extent of repa,,--
·tt e SEBI JJlaY
d IT DepartJJlent
int d Comm1 e · VI ED an
Court appo e
rt ruling with Eo .
i authorities for
details of the apex cou
Uy with tbe r
may take up the matter interna
facilitating this coordinated action.
. 0 informed that as part of
10 Shri "Sanjay Raj, Addi. Director, SF!
. from the affected
·
h alled for c1rurns
d·
their investigation, the� _ave. c
. . the newspapers and sen ing
investors by way of pubhshing mvites m
So far around
t t the known addresses.
emails and letters by pos o
d . vestors) accounting
7000 investors (out of the stated 13000 du
�;O �his raises concerns
for around 2000 cror� have been traced by_S ·. . . . progress.
on the genuineness of claimants and the mvestigation is m
t
. har
e
The Chairman requested EoW and High Court Committee O s
t
with SFIO numbers/list of affected investors, alongwith amoun -
wise break-up. It was suggested that repayments /disgorge ents
shall_ be done only to genuine clients through a
monitored mechanism.
11. There was also a discussion on the changes being m
unique client codes (UCC) by these brokers which raise
about the genuineness of the u:ivestors. Generally, 15 minu
given at the end of the trading session to correct the pun
However, they have observed that client code changes w
carried out even at 2 AM in the morning. SFIO suggested
their forensic audit is completed it would be easy t
liability on brokers / NSEL for these undue UCC c,--�,
assured to expedite the same.
12. Shri Amit Pradhan, CGM, SEBI informed that th
appointed auditors to conduct audit of the accounts of
commodity derivative brokers whose names figured in the
Report forwarded by the EoW. On the basis of the Aud.it
enquiry proceedings have been initiated against the 5 brok
currently the proceedings are at the stage of personal hearing
the competent authority. The Chairman enquired to know w.

5. .,....' .
',; 11a.s
_
n�t initiated action against other brokers and that DEA has been
rece1v1ng a lot of complaints against SEBI for this reason. Shri Ami
t
Pradhan, CGM explained that with regard to the other tainted broker
s
,
no re�ere�ce/adverse remarks have been received from any of the
Investi�ative/Enforcement agencies, including clean chit given_ to tbem
if any._ S�BI has initiated action against all the five brokers, without
exception, whose names appeared in the Interim Report of EoW. If the
nrunes of any other brokers happen to figure in the Final
Report/Charge Sheet which is yet to be submitted by the EoW and if
referred to SEBI, then SEBI will definitely initiate action against them
also.· He has further assured the Chairman that the proceedings
currently going on against the five brokers will be speeded up.
c'hairman advised other "agencies to share information with SEBI
on other defawting:'"16;-:;r:::;:o�k-:::e::::r
==
s
::-.------------
t3. The· meeting ·ended with a vote of thanks to the Chair. The list of
>articipant� i� attached.

7. Government of India
Ministry of Finance
Department of Economic Affairs
Financial Markets Division
Commodities' Derivatives Section
**"'
,.
MINUTES OF THE TWENTIETH REVIEW MEETING ON TfiE
IMPLEMENTATION OF THE RECOMMENDATIONS OF THE ST� ON NSltL
ISSUE HELD UNDER THE CHAIRMANSHIP OF SECRETARY(EA) IN ROOM
NO.131-A, NORTH BLOCK, NEW DELHI AT 1.00 P.M. ON 07.06.2018.
The Chairman welcomed the participants s.nd :set about to review the
progress made by each of the law enforcement agency with regard to !·heir
investigations into the National Spot Exchan_gc: J�iIJ.Iited (NSEL) payment crisis.�· - - - · · ·· - · ·· - •· - • - •· · . . ·- · · -- ·
The list of participa.nts is attached.
2. Shri Ashutosh Dumbare, Joint Commissioner, EOW, Mumbai Police,
made a prt'.sentation on the progress of enforccmt:nt actions takt:n under lhe
Maharashtra Protection ofintcrest of Depositors (MPID) Act, 1999.
3. EOW informed that after the successful auction of six properties,
there are 28 properties which have been made absolute and are ready to
be auctioned. The valuation of 28 properties has been completed and
r-�t.1�_; :.;ui;�cc for tne auction ot seven properties has been published. The
valuation of the remaining properties is in progress. The hearings of 159
objections are being taken on priority basis. The Chairman suggested
that a request may l>e ·sent to the Government of_ Maharashtra and
the Competent Authority appointed under MPID Act, 1999 to take
appropriate action to expedite the valuation and auction of these
attach.ed properties to realise the best values from them so as to
enable payments to the investors.
4. As regards the attached properties at Bikaner and Delhi, which
were assured to be auctioned in the last meeting, it was informed that
Government of Rajasthan staked claim for the property at Bikaner for
violation of the Rajasthan Ceiling on Agricultural Lands Act by the
previous owner who ha:s subsequently sold the property to others.
Therefore, the auction of Bikaner property has not been done. For the
Delhi property, a bid of Rs. 5 Crores was received which was not
accepted as it _wa·s·very 'low compared to the reserve price of Rs. 164
Crores. The Chairman suggested that the cla.im by the Government

8. of Rajasthan should not stall the proceedings under the MPID Act,
1999 as these properties were already made absolute and was
acquired in good faith by the subsequent owners, and therefore EOW
should proceed with the auction of the same even though buyers
may not come forth that willingly. Further, :required suitable
remedial action may also be taken. The Chairman suggested that
since the property at Civil Lines, Wew Delhi, is at a prime location in
Delhi, the Ministry of Housing and Urban Affairs or any Government
Department like Delhi Development Authority, or IES Division of
DEA, or government undertakings such as NBCC may be approached
by competent authority for seeking theh· interest. EoW was advised
to share the detaits of the said property to DEA and if felt required,
competent authority may seek a meeting in DEA with the said
potential bidders.
5. EOW informed that companies whose liquid assets such as shares,
bonds, mutual funds etc. have been frozen, have filed various objections
in Special MPID Court and hence the same could not be made absolute
as was discussed last time. The process of hearing of objections is being
taken on priority basis. Chairman suggested that EoW should
cxpeciitiousiy get 1:he seizeci iiqu1a asse1:s ma<ie ai:>soiute as these
would not involve any auctioning process and a major chunk of
investors can be compensated with the amount involved of around
Rs 1976 crores. Chairman suggested that competent authority may
focus on such liquid 'assets to speed up the recovery and refund
process.
6. Repayment of Rs. 163 crorc to 6445 investors, who has claims
_qetwe �n 2.10 lakh, was expected to be achieved in couple of months.
E;OW informed that the list of investors has been prepared and the same
was �;ubmitted to the High Court Committee for approval thro.gh the
competent authority. The Competent Authority has filed a Miscellaneous
Application (M.A.) in the Special MPID Court regarding the distribution of
money to the investors. The hearing of the said M.A. shall be taken on
priority basis. Thereafter, as per the directions/order of Special MPID
Court, a proper plan of payment shall be prepared and payments shall be
made to the investors. In this regard, Chairman advised to formally
Page 2 of7

9. take up the matter with Government of Maharashtra and Competent
Authority to initiate. repayment process within two months, with
the money available in the escrow /competent �uthority's ·account.
7. As regards arrest of the two accused viz. Shri Daljeet Singh and
Shri Jaspal Singh of Sirsa, Haryana (M/s.Namdhari Group) residing at
Sirsa, Haryana, searches have been ma.de by the EOW, Mumbai team in
the month of March, 2018 but they were not found. As advised, the
proclamations have been executed against the accused persons in th�
month of March, 2018 at their native place a·nd accordingly a report has
been submitted to the Special MPID Court. An application for the process
of seizure of their properties under section 83 of Criminal Procedure
Code (Cr.P.C.) is being filed. The Chairman enquired if the property so
attached can be sold and if the assets realised can be distributed.
The representative from EOW cla:rified that the properties attached
under Cr.P.C cannot be disposed of till the trial is completed under
the Cr.P.C. However, this will put pressure on them forcing them to
surrender and court hearings can re13ume with that.
8. As regards the issue of overlapping jurisdiction of EOW vis-a-vis
the Enforcement Dirc:ctorMr., 1·h,::- C!°'?i.!:"�2.� !� t!'!� l�:;t ..-•.:.:�i;:-;g b.ci.J
remarked that the ultimate objective of the Government is to ensure that
all the duped investors· are paid back their money, and had asked the
Enforcement Directorate to explore the feasibility of giving precedence to
the claim of EoW Mumbai Police, on these 67 commonly attached
properties. ln this regard, Shri Shri Vineet Aggarvval, Special Director,
ED informed that Section 8 of the Prevention of Money Laundering Act,
2002 (PMLA) has been amended vide Finance Act, 201.8. Accordingly, the
Special Court tmder PMLA, may, if it th,inks fit, can consider the claim of
the claimant(s) for the purposes of restoration of such properties during
the trial of the case in such manner as may be prescribed. The
representative of ED has informed that the draft rules prescribing the
procedure of restoration of properties during the trial has been forwarded
to the Department of Revenue for consideration and notification in the
official gazette. It was suggested by DEA that ED, while issuing the
Rules under the amended provisions of Finance Act 2018, may
make a provision to route the repayment to investors through the
P.ige 3 of 7

10. mechanism already set up for such purposes such as Competent
Authority Account unde:r MPID Act. Chairman advised FM Division
to take up the matter with Department of Revenue.
9. Shri S.K.Singh, CIT (Investigation), CBDT informed that in the case
of the crime proceeds of Rs.54 crores seized by the Incom.e Tax
Department from the defaulter accused firm viz.M/s.Mohan India Pvt.
Ltd, Special M?ID CO'tlrt had ordered recovery of Rs.54 crores from IT
Department. However, the IT Department has filed an appeal in Bombay
High Court against the MPID court's order and the c1:1se is scheduled to
be heard on 7th July, 2018. An amount of around Rs.470 Crore is due to
the IT Department. The Chairman suggested that a proposal may be
sent to the Income ·Tax Department (ITD) to make appropriate
amendments to the Income Tax Act, 1956 on the lines of
amendments to PMLA so as to ensure precedence to the claims of
defiauded investors, from the assets seized by the ITO generally,
and particularly in the NSEL case, the amount realised may be
transferred to the account of Competent Authority established
under MPID Act, 1999.
i 0. /s regards the genuineness of claimants and the investigation in
progress, the Chairman in the last review meeting had requested EoW
and High Court Committee to share with SFJO numbers/list of affected
investors along with the amount-wise break-up. EOW has informed that
a list containing defauWng brokers has already been posted to SFIO
which it shall receive shortly and SFIO may then take appropriate
action on that.
1 l. The representative of EOW informed that the investigation
regarding accused brokers is in progress. The final Digital Forensic Audit
Report regarding brokers is being awaited and in all likelihood the same
will be received before end of June 2018. After completion of the
Digital Forensic Audit� action against brokers will be expedited and
final report shall be shared with SEBI for necessary action.
12. The representatives of SEBI informed that enquiry proceedings
initiated against the five commodity brokers (whose names appeared in
Page 4 of 7

11. the Interim Report of EoW) are currently at the stage of personal hearing
before the competent authority (Whok time Member) under the SEBI Act,
1992. The said commodity brokers were stalling adjudication process by
avoiding filing replies to the show cause notices (SCNs) issued to them by
seeking inspection of various documents on the basis of which SCNS had
been issued to the them. The whole time member, SEBI, has passed ar1
order dated 6th June, 2018 against the said brokers directing them t<j
submit their replies on merit within a period of four weeks from the date
of the said order and to appear for personal hearing on merits on 12th
July, 2018. The Chairman advised other agencies also to share any
information on other defaulting brokers with SEBI so that there is
no allegation of discrimination against 5 brokers. ED informed that
they have forwarded a few such complaints to SES!.
13. The representatives of FIU-India informed tha the order of the
Hon'ble PML Appellate Tribunal reducing the quantum of penalty
imposed on NSEL for the violation of various provisions of Prevention of
Money Laundering Act, 2002, has been challenged before the Hon'b]e
Delhi High Court. The matter was heard by the Hon'ble Delhi High Court
on 29.01.2018 and four weeks' time was granted to NSEL to file its reply.·
YIV-Ifo:lic;1. i� ye� �v ic�civ"<'; i4ii.,Y Cv.u,te1·-a..ffi..-L:;,vlt i!lcu uy t.l-1c i;SC�. Th�
next date of hearing ofithe matter is 26t11 July, 2018.
14. It was informed that in the course of material collected for a CO.lrt
case, it came to the notice of DEA tha.t brokers of NSEL were deducting
STT from their dients, though such transactions were not liable to STT.
CBDT has confirmed that no remittance has come from brokers on
account of STT. Chairman advised that CBDT may decide on the
suitable course of action against brokers for such unauthorised
deductions in the name of statutory levies. Further, on the issue of
whether the co:mpetent authority shall be liable to make good such
unauthorised deductions, it was opined by S(EA) that if investors
come up with solid proofs for such unlawful deductions, the same
shall be considered liable for repayment by the HC committee.
15. It was pointed out that the last press release was issued in July
2016. Chairman advised that it is desirable that the action being take::n is
Page S of 7
/

12. put out in public domain and we may consider issuing a suitable press
release when repayment is initiated to the investors two months
down the line.
16. The meeting ended with a vote of thanks to the Chair.
Page 6 of 7

13. 20th Review Meeting on NSEL issue held at 1:00 P.M. on 7th June
2018.
LIST OF PARTICIPANTS
I. Ministry of Finance, Dept., of Economic Affairs:
I. Shri Subhash Chandra Garg, Secretary (EA)
2. Shri P. Selvakumar, Joint Secretary (ABC & FM)
3. Ms. Rose Mary K Abraham, Joint Director (SM&.CD)
II. Ministry of Finance, Dept., of Revenue:
1. Shri S.K. Singh, CIT (Inv.), C.BDT
m. Enforcement Directorate (EI>):
I. Shri Vineet Aggarwal, Special Director (Western).
IV. Financial Intelligence Unit, India (FIU-Ind):
I. Ms. Priya Sahu, Additional Director
2. Shri Shailesh Thakur, Additional Director
V. Serious Fraud Investigation Office (SFIO):
I. Shri Amardeep S. Bhatia, Director.
YI. Securities and Exchange Board of India (SEBI):
I. Shri Sandccp P. Deare, Manager
2. Shri Anjarul Shaikh, General Manager.
3. Shri O. Rajesh Kumar, General Manager
VII. Economic Offences Wing, Mumbai Police (EoW):
I. Shri AshutoshDumbare, Joint Commissioner.
2. Shri Ramchandra R Lotlikar, Police Inspector
VIII. Central Bureau of'Jnvestigation:
I. Shri Sudhanshu Dhar Mishra, SP
P;ige7of7

16. : 2 :
it was made after the final arguments in the case had been concluded,
and that too when the Applicant, Shri Saraf and his learned Counsel
were not present. Chairman observed that court's rejection is on
technical grounds and ·hence before the next payout, an application
for preferential payment to investors of Rs. 2-10 lakh group be
made to the court. Further, now that Competent Authority has
obtained the names/bank account/email details of the clients,
further payouts shall be made directly only and not to be routed
through brokers. Shri Suryakrishnamurty, assured the Chairman that
further payments as and when made would be made directly to ·
accounts of the affected investors after ascertaining the genuineness of
their claims, rather than through their brokers. The Chairman
cautioned that the exact number of affected investors should be
firmed up at the 12735 as reported after the audits and there
should not be any ambiguity therein. Further, it was instructed
that no repayments shall be made to IBMA, which is a related
entity of NSEL, at this juncture.
4. Shri Vinoy K Choube, Joint Commissioner, EoW, Mumbai Police
made a presentation on the progress of the investigation and
enforcement actions undertaken by them. The progress reported by
EoW with regard to their investigation and recovery efforts is as follows
as on 13/11/2018.
t. • 1
r1.
ii.
iii.
Forensic Audit is completed.
Digital Forensic Audit is also completed and report is being
prepared.
Valuation of 41 new properties has been completed and these
properties have been made absolute by MPID court. Valuation of
other properties is in progress.
� iv.
,,
E-auction of properties is in progress. 29 properties were put up
for auction. 6 properties worth Rs. l.73 Crores have already been
sold. On 29.10.2018 auction of 5 properties worth Rs.40 Crore of
M/s Mohan India Ltd. was successfully completed. Thus, till date
11 out of 29 properties have been sold in e-auction.
t i
' '
v. Since the last Review Meeting, a total 4 new properties and assets
of NSEL, M/s 63 Moons Technologies Ltd, IBMA and Defaulter
companies worth Rs.60 crores have been identified, attached and
notified.
Contd..3.

17. : 3:
vi. Notice of Motion No. 1678/18 in Civil Suit No. 173/14 (Modern
India Suit) was filed in Bombay High Court for transferring money
from NSEL Escrow account to that of the Competent Authority.
Next hearing is scheduled to take place on 28/11/2018 and that
EoW is hopeful of a positive verdict. ..·,,1J
vu. Red Corner Notice has been issued against wanted accus.e6.
Anubhav Agarwal of M/s. Ark Imports. Wanted accused Jaspiji
Singh and Daljit Singh (Namdhari Foods) of Sirsa, Haryana h�y�
been declared as a proclaimed offenders. One team has been sedt
to Sirsa recently also in search of the absconding accused.
viii. A separate FIR has been registered by EOW u/s.
20(d),(e),2l(b),(d), (f),(e) of FCR Act-1952 against 300 brokers for
illegal trading on NSEL platform, on the basis of the complaint of
SEBI.
5. Shri Choube, further, added that M/s 63 Moons Technologies Ltd
had, however, challenged the attachments in Civil WP No.1181/2018.
On 24/10/18 Hon'ble Bombay HC stayed the attachment notifications
and ordered release of ODIN software receivables and accrued benefits
on the grounds that this attachment would strangulate the business
operations of the entity. However, attachments on immovable property
and investments, together worth Rs.1700 Crore, would remain with
EoW. Chairman advised to file a petition for making some of these
investments absolute to realize money at the earliest. He also
urged the EoW to concentrate more on movable assets of the
offenders as it would be easier and less cumbersome to convert
them into cash and bring them to the Competent Authority's
account as compared to immovable properties.
6. At this point of deliberations, Joint Director, DEA pointed out that
value of attachment as shown by EoW had declined from around
Rs.8700 crore one year ago to now around Rs.7600 crore and asked
why such a decline had happened. It was clarified that in addition to
changes in market value some of the attached properties gets released
leading to a decline in the value of attachment. It was observed by ED
that generally properties are fetching below the estimates and going by
that·rate, probably one can expect realization of around Rs.4500
crore out of
Contd..4.

18. : 4:
Rs.7600 crore. The Chairman suggested that EoW should keep a
vigilant eye on and if required undertake a random check of
statements of the frozen bank accounts of the accused so as to
thwart any furtive attempts to divert or transfer amounts to other
accounts. It was submitted that liquid assets are mostly that of FTIL
group and defaulters' assets mostly lie as immovable property. EoW
was requested to furnish to DEA a status report on all the NSEL
defaulter firms as to how many of them have gone out of the
business (their businesses have got closed) and how many of them
are still actively engaged in the same business.
7. Joint Director, DEA also mentioned that of late DEA had received
a few complaints alleging that some of the officials of EoW were not
pursuing the matters in the courts of law as seriously as was required.
Shri Vinoy K Choube, Joint Commissioner, Mumbai Police replied that
those issues were sorted out and as per the suggestion given by a group
of affected investors, EoW has engaged a new Senior Counsel Shri.
Rafique Dada for fighting the case.
8. Shri K.Suryakrishnamurty, Competent Authority raised the
problems being encountered by them in disposal of the attached
properties located at Bikaner and Delhi. The Chairman concurred with
the Competent Authority's view that it was neither prudent nor tenable
to pursue the auction of the property located at Bikaner as the same
had already been reclaimed by the Government of Rajasthan long before
its attachment by the EoW. Similarly, it was discussed and concluded
that the offer given by NBCC in respect of the property located at Civil
Lines, Delhi was not worthy of acceptance as it would not serve our
purpose of pooling money as quickly as possible to square up with the
affected investors. The Chairman opined that since the EoW was in
possession of the original title deeds and NBCC route may not be
3<ielding desirable results, they could now consider going ahead
lflth the process to auction the property.
9. Thereafter, the issue of overlapping jurisdiction of ED and CBDT
vis-a-vis Mumbai Police with regard to attachment of properties was
discussed. Shri Krishnamurthy, Competent Authority, remarked that
despite the order of the MPID Court, ED did not hand over the
original
Contd..5.

19. : 5:
title deeds of 15 of the attached properties as a result of which they
were not able to proceed with the auction of these properties. Then,
Chairman wanted to know what exactly the sphere of investigation of
ED and CBDT was with regard to NSEL issue. Shri Satyabrata Kumar,
Joint Director, ED and Shri S.K.Singh, Commissioner (Inv.), CBDT
explained their respective position that the investigation under PMLA• ·.I·
was concerned with the money laundering done with the proceeds, b,f
the crime and the investigation under IT Act 1961 was concerned wi_ti1
seizure of undisclosed income. Referring to the decision taken duri.tjk
the last review meeting held on 07/06/2018, the Chairman enquir�.t:l
from ED and CBDT as to whether requisite enabli,rlg
provisions/amendments had been made in the PML Act and IT Act· t�
pave way for prioritization of the interest of victim investors. Shfi
Satyabrata Kumar from ED replied that they had added a second
proviso to Sec.8(8) of PMLA which read as "Provided further that the
Special Court may if it thinks fit, consider the claim of claimant for the
purposes of restoration of such properties in such manner as may be
prescribed". This proposed amendment is yet to be notified by the
Department of Revenue. Chairman advised to expedite the
notification of the same.
10. Shri S.K.Singh from CBDT stated that the MPID court had
ordered recovery of the crime proceeds of Rs.54 crore seized by the
Income Tax Department from the defaulter firm M/s Mohan India Pvt.
Ltd. However, they appealed to the Bombay HC against the order and
also sought a stay on the order of the MPID court. The Hon'ble HC
heard the case on 11/10/2018 and adjourned it to 19/11/2018 with
the oral observation that since a writ petition of ED, arising from the
same order of MPID court, tagged with the appeal of the Income Tax
department, had already been admitted and a stay was granted, the
stay granted in the WP of ED might be followed in respect of the appeal
of the Income Tax Department also. It was stated that the amount
seized by the Income Tax department could be dealt with only as per
Sec.132 B of the Income Tax Act 1961. There is no provision in the act
to the effect that recovery of investment lost by investors and its
repayment ·should outweigh all other concerns. The Chairman
responded that the amount seized by the IT department from the
defaulter firm was, strictly speaking, not the income as such of the
firm, but they are crime proceeds. That was the reason why the
Department of Revenue and Income Tax
Contd..6.

20. : 6 :
department had been requested in the earlier review meeting to suitably
amend the provisions of their act in such a way that it would permit
release of seized amounts to victims of financial fraud if approached
through the special court dealing with the fraud. The Chairman
suggested that the FM division, DEA should take up the matter
with the Department of Revenue at appropriate level and prevail
upon them to withdraw the appeal filed by the Income Tax
Department and the Writ Petition filed by the ED In the Hon'ble
Bombay HC and to comply with the orders of the MPID court in the
interest of the affected investors of the NSEL.
11. Further, the officers representing the Ministry of Corporate
Affairs, CBI, SFIO, FIU and SEBI explained the progress/status of their
respective investigations/litigations connected to NSEL issue. MCA
informed that the SLP filed by FTIL challenging Bombay HC's order
upholding the Government's orders of amalgamation of NSEL and FTIL
was listed for hearing on 13/11/2018. CBI informed that the
permission to prosecute the then CMD of MMTC Ltd., is awaited from
DoPT for the past one year. Chairman advised CBI to follow up on
the matter. SFIO informed that they had initiated the process of
prosecution proceedings before the appropriate court. FIU informed
that the WP filed by them in the Hon'ble Delhi HC challenging the order
of PML Tribunal which had reduced the penalty imposed on NSEL from
1.66 crores to Rs.24.90 lakhs would come up for hearing on
14/01/2019. SEBI informed that besides the proceedings already
going on against five brokers, they had initiated action against 295
brokers who had been trading on NSEL platform.
12. The meeting ended with a vote of thanks to the Chair. The list of
� participants is attached.
. '
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