Speedy Liquidation Order of NSEL Defaulter Assets by Court

The Maharashtra Protection of Interest of Depositors (MPID) court had observed and stated that there had been delays in liquidation of certain NSEL defaulter properties which were attached by various authorities. Complaints were previously raised, to which the Economic Offences Wing (EOW) had attached properties of the borrowers under the MPID Act.  

The order to liquidate the attached defaulter properties had already been passed before.  Judge D.P. Surana presiding over the matter interrogated the Competent Authority represented by Deputy Collector,AjitSakhare about the progress in the matter. The court had passed an order in allowing Competent Authority to liquidate properties of some Defaulters of NSEL. There still seems to be little or no progress taken in liquidation of the attached defaulter properties by the authority so far.

Attached properties were transferred to the Competent Authority which had to then auction and distribute the funds raised among those who have lost money. However there seems to be no action taken place in the matter.

In the case of defaulter Swastik Overseas Corporation who has a payment obligation of 102.98 crores, the court had passed an order allowing the authority to liquidate properties of Rajesh Mehta. No efforts have been seen in this matter till date. Swastik Overseas has paid just Rs. 12.18cr. EOW & crime investigating department of Mumbai has also attached the company’s property in Gujarat.

 The Court has sought help from NSEL &the group representing NSEL Investors to arrive at valuation based on ready reckoner rates of State Government.  The Court has also ordered the Competent Authority to comply with its order and file a report in one month.

In another case connected to NSEL payment crisis, the court ordered Competent Authority to take control of the five immovable properties owned by NarayanamNageswarRao, Managing Director of NCS Sugars Ltd. This Hyderabad based company has paid only Rs. 7.85 Crores of its total obligations of Rs. 58.5 crores till date.

 Yathuri Associates, yet another defaulter in the NSEL payment crisis along with its group company has a payment obligation of 640 crores. In this case GaganSuri Proprietor of Yathuri Associates also has attached properties. The court ordered the Authority to proceed with liquidation of the attached property & report back in one month. The estimated value of attached property is 300 crores

Various other cases of defaulter properties were also given in the hands of the Competent Authority to expedite the liquidation of attached properties.One can only hope and wait and watch, if these orders by the court will be immediately acted upon, thus bringing relief to the current NSEL crisis situation.