India's long-running National Spot Exchange (NSEL) payment crisis is finally drawing to a close after nearly twelve and a half years. The National Company Law Tribunal (NCLT) in Mumbai has approved a landmark ₹1,950-crore settlement scheme, bringing closure to one of the country's most significant financial market disruptions.
The Final Settlement Agreement
On Friday, NCLT Mumbai gave its official approval to the settlement arrangement between NSEL, its promoter company 63 Moons Technologies, and the traders who had outstanding dues totaling approximately ₹4,300 crore. This marks the last and final round of settlement in the protracted NSEL case, according to court documents.
This settlement specifically addresses traders with dues exceeding ₹10 lakh, who will receive approximately 42% of their outstanding amounts that have been pending for over twelve years. Some industry sources indicate that the final settlement percentage might potentially increase to 55% of their dues.
Previous Settlement Rounds
The resolution process had already addressed smaller claimants in earlier phases. Approximately 600 traders with individual dues below ₹2 lakh received 100% payment of their outstanding amounts. Following that successful settlement, another group of 6,450 traders with dues ranging between ₹2 lakh and ₹10 lakh also obtained full settlement of their amounts.
The current agreement represents the culmination of a settlement proposal that originated in the second half of 2013, as numerous court cases and litigation proceedings continued. When the tribunal put the proposal to vote, it received overwhelming support with nearly 93% of traders by number and over 91% by value approving the arrangement.
Legal Implications and Future Actions
As part of the settlement conditions, traders have agreed to withdraw all legal cases against both NSEL and 63 Moons. The traders will also transfer all their legal rights in this matter to NSEL and its promoter company.
Industry sources revealed that once the settlement process concludes and 63 Moons acquires the legal rights from traders, the company plans to initiate legal proceedings against 22 defaulters who had failed to pay their dues to NSEL.
The NSEL crisis originally erupted in July 2013 when the Department of Consumer Affairs directed NSEL to close out all contracts. This directive triggered a massive payment crisis valued at over ₹5,400 crore at that time, creating significant turmoil in Indian securities markets and affecting thousands of traders and investors across the country.
