The High Court of Bombay, last week, struck down a National Company Law Tribunal (NCLT) order in Jan 2019 de-freezing a company’s bank account attached in connection with the National Spot Exchange Limited (NSEL) case. It said the NCLT has no jurisdiction to examine the validity of actions taken under the Maharashtra Protection of Interest of Depositors (In Financial Establishments), or MPID Act.
A bench of Justices SC Gupte & Madhav Jamdar “...it is only the Designated Court constituted under the MPID Act that will have exclusive jurisdiction.."
The NCLT had de-freezed the bank account of Dunar Foods Ltd. The Mumbai police’s Economic Offences Wing had attached the account in connection with the NSEL case.
The State Bank of India had initiated proceedings against the company under the Insolvency & Bankruptcy Code, 2016, for a defaulting on a debt of Rs758.73 crore.
Deputy collector, a competent authority under the MPID Act, moved the HC challenging the NCLT order, saying the tribunal has no jurisdiction to order the de-freezing.
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