SC stays NCLAT order appointing 3 govt nominees on 63 moons board – The Hindu BusinessLine

Clipped from: https://www.thehindubusinessline.com/todays-paper/tp-news/sc-stays-nclat-order-appointing-3-govt-nominees-on-63-moons-board/article65212674.ece

NEW DELHI, 09/04/2013: Supreme Court of India in New Delhi on April 10,  2013. 
Photo: S. Subramanium

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 directors of 63 moons tobe reappointed in other companies

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.

In March 2020, a NCLAT Bench headed by Chairperson Justice SJ Mukhopadhaya, upheld the directions of the Chennai bench of the National Company Law Tribunal (NCLT) to appoint three government nominees on the board of 63 Moons to take care of the interest of all stakeholders as well as protect the company’s investments in its subsidiaries. It, however, dismissed the plea of the company’s three directors, Jignesh Shah, Manjay Shah and Dewang Neralla, who challenged their disqualification. NCLAT had held that the three directors along with six others were “not fit and proper persons” to be the directors of any company under Section 388B of the Companies Act.

The case

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 Rs. 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.

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