Companies

NSEL case: HC rejects ARK Group’s plea for protection from action by Economic Offences Wing

K R Srivats New Delhi | Updated on October 03, 2019 Published on October 03, 2019

The High Court of Punjab and Haryana has dismissed the petition by ARK Group company, Genex Polyfab, seeking protection of the company and its directors from prosecution by the Economic Offences Wing (EOW), Mumbai, under the MPID (Maharashtra Protection of Investors’ Deposits) Act.

The total default liability of the ARK Group in the Rs 5,600-crore National Spot Exchange Ltd (NSEL) payment default case, is estimated at around Rs 790 crore. The EOW had traced this amount to the group companies.

Genex Polyfab had filed three writ petitions in the Punjab and Haryana High Court in 2016, challenging the applicability of the MPID Act and had obtained a stay against any action by the EOW.

NSEL had single-handedly filed its affidavit-in-reply, opposing the writ petitions. The stay has now been vacated by the High Court, clearing the path for action by the EOW under the MPID Act.

The matters were listed for withdrawal on August 29 this year. The Punjab and Haryana High Court dismissed the petition as withdrawn without any liberty or any further interim orders in favour of Genex Group.

Since the onset of the payment default crisis, NSEL has been actively pursuing recovery from the 24 defaulters and has succeeded in getting the MPID Court order, directing the Competent Authority to begin the process of auctioning five properties belonging to NSEL defaulters -- Mohan India Pvt Ltd, Swastik Overseas Corporation, NCS Sugar Pvt Ltd, Metkore Alloys & Industries Ltd and ARK Imports Pvt Ltd -- collectively amounting to over Rs 354 crore.

Notably, there are nine other defaulters’ properties in the pipeline for auction, which the MPID Court is in the process of directing the Competent Authority to liquidate and recover the default money, it is learnt.

Published on October 03, 2019
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