NEW DELHI, 09/04/2013: Supreme Court of India in New Delhi on April 10, 2013. Photo: S. Subramanium | Photo Credit: SUBRAMANIUM S
Allows two hitherto disqualified directors of 63 moons to get appointed on other boards
The Supreme Court has stayed the National Company Law Appellate Tribunal (NCLAT) order that allowed the government to appoint three nominees on the board of 63 moons technologies, formerly known as Financial Technologies India Ltd (FTIL). The apex court also allowed 63 moons’ two directors – Dewang Neralla and Manjay Shah – to get reappointed as directors in other companies, except for 63 Moons and the National Spot Exchange Ltd (NSEL). The issue of appointment of Jignesh Shah as director will be looked into after six weeks. A Bench, led by Justice Vineet Saran, on Wednesday stayed the NCLAT order, sources said.
It maybe recalled that the government had moved the NCLT to take over the board of 63 moons technologies under section 397 and 398 of the Companies Act after the ₹5,600-crore NSEL payment default crisis came to light in July 2013. However, in June 2018, the Chennai NCLT Bench dismissed the Centre’s plea to take over the board of 63 moons technologies and allowed the Government to nominate a maximum of three directors. In its submission in the apex court, 63 Moons reiterated that affairs of both the companies – 63 moons and its subsidiary NSEL – were completely different and led by separate and independent board of directors, and none of the common directors were involved in the day-to-day affairs of NSEL. NSEL was hit by a settlement crisis of ₹5,600 crore in July 2013 after 24 defaulters failed to meet payment obligations. Post-NSEL crisis, in February 2016, the Ministry of Corporate Affairs decided to merge NSEL with its parent FTIL under Section 396 of the Companies Act. It was described as the first case of the government ordering merger of two private sector companies under Section 396 of the Companies Act. The merger order was challenged by 63 moons technologies before the Bombay High Court, which dismissed the petition. However, the Supreme Court set aside the Centre’s decision to merge NSEL with 63 moons technologies India, as it was against Section 396 of the Companies Act, which deals with compulsory amalgamation of firms ordered by the central government in public interest.
Published on March 10, 2022