Supreme Court upholds MPID attachment priority in NSEL case

What the Record Shows

The Supreme Court of India held on 15 May 2025 that assets attached by the Maharashtra government under the Maharashtra Protection of Investors and Depositors (in Financial Establishments) Act, 1999 (the MPID Act) take precedence over the claims of secured creditors under the SARFAESI Act and the Recovery of Debts and Bankruptcy Act. The judgment, in Writ Petition (Civil) No. 995 of 2019 (neutral citation 2025 INSC 694), settles a long-running priority contest over the pool of assets tied to the collapse of National Spot Exchange Ltd (NSEL).

The exchange suspended trading in July 2013 after 24 of its trading members failed to meet payment obligations, leaving roughly 13,000 trading clients holding paper claims worth about Rs 5,600 crore. The court recorded that decrees of about Rs 3,365 crore have been passed, that the Enforcement Directorate had provisionally attached about Rs 1,740.59 crore, and that attachments under the MPID Act ran to about Rs 8,548 crore.

The judgment addressed the civil question of who ranks first over attached assets. It did not decide the separate criminal matters. Chargesheets filed by the Economic Offences Wing (EOW) of the Mumbai Police under the MPID Act and the Indian Penal Code, and proceedings by the Enforcement Directorate under the Prevention of Money Laundering Act, 2002, remain pending before the trial courts. No conviction has been recorded against NSEL, its former directors, 63 Moons Technologies Ltd (formerly Financial Technologies India Ltd) or the defaulting members. 63 Moons has consistently denied wrongdoing and describes itself as a victim of the default.

How It Worked

The mechanism, as the official record and the agencies' filings describe it, centred on paired contracts traded on what was presented as a spot commodity exchange. According to the case record, buyers entered a short-duration contract to purchase a commodity and simultaneously a longer-duration contract to sell it back, producing a fixed spread that functioned in practice like an assured return. Warehouse receipts issued on the platform were meant to represent physical stocks of commodities held in accredited warehouses.

The EOW chargesheets allege that when trading was suspended in July 2013, the commodity stocks the receipts purported to represent were largely absent from the warehouses, leaving traders with claims against members who could not pay. Investigators have characterised this as a warehouse and collateral-integrity failure rather than a market-price collapse, because the contracts had promised settlement in goods that, per the chargesheets, were not there.

The procedural history is long. An FIR was registered in 2013 and the case was transferred to the EOW in September 2013. A representative suit (Suit No. 173 of 2014) led the Bombay High Court to appoint a committee to consolidate recoveries. The Enforcement Directorate opened a money-laundering investigation and issued provisional attachment orders, which require confirmation by the Adjudicating Authority under the PMLA. The Serious Fraud Investigation Office and SEBI examined the corporate and regulatory dimensions. In May 2022 the Supreme Court constituted a single-member committee headed by Justice (Retd.) Pradeep Nandrajog to consolidate and execute the pending decrees and liquidate attached assets.

None of these steps is a finding of guilt against any individual. A chargesheet and a provisional attachment are allegations and investigation-stage measures; the trials that would test them are still to conclude.

Who Lost Money

The record puts the affected population at about 13,000 trading clients with claims of roughly Rs 5,600 crore when the exchange froze in July 2013. Many were treated as investors under the MPID Act, which is why the Maharashtra government's attachments became central to the recovery effort.

Recovery has been slow and partial. The Nandrajog Committee has worked through decrees of about Rs 3,365 crore, but converting decrees and attached property into cash in traders' hands is a separate, drawn-out exercise. A scheme of arrangement under Section 230 of the Companies Act, 2013, approved by the National Company Law Tribunal (NCLT) Mumbai on 28 November 2025, proposes about Rs 1,950 crore for 5,682 traders in proportion to their dues, against closure of certain proceedings and assignment of trader rights to 63 Moons.

That headline figure is far smaller than the original claims, and it covers only a subset of traders. For those outside the scheme, recovery continues to depend on the execution of decrees and the liquidation of attached assets, which is what the Supreme Court's priority ruling now facilitates. As of today, distributions under the scheme remain subject to appellate challenge.

Where It Stands Now

The current position rests on two 2025 developments. First, the Supreme Court's 15 May 2025 judgment confirmed that MPID attachments outrank SARFAESI and RDB secured-creditor claims and remain available to the committee for executing decrees, even where an insolvency moratorium would otherwise apply. That decision strengthens the recovery pool for defrauded traders as alleged, but it decides priority, not culpability.

Second, the NCLT approved the Section 230 settlement scheme on 28 November 2025. That approval is not final and settled: it has been carried to the National Company Law Appellate Tribunal, where challenges to the scheme were being heard in early 2026 (including a plea recorded on 30 March 2026). Until those appeals conclude, the settlement's terms are not beyond dispute.

The criminal cases are the key open front. The EOW, ED and SFIO matters against NSEL, its former management, 63 Moons and the defaulting members remain undecided, and no court has convicted anyone. A chargesheet contains allegations, not findings of guilt; the accused are presumed innocent until proven guilty, and due process continues.

What It Means

The NSEL matter is, at its core, a story about a regulatory gap. The exchange operated a spot platform under an exemption notification issued in 2007, outside the warehouse-accreditation and settlement-supervision regime that applies to a recognised commodity derivatives exchange. Products that behaved like assured-return investments were traded without the collateral checks that such assurances imply.

For an ordinary saver, the practical lesson is about verification rather than fear. A promised fixed return on a commodity or deposit product is only as sound as the assets and the regulation behind it. Before committing money, it is worth confirming what regulator supervises the platform and under what statute, and whether the instrument is what it is marketed to be. Our investment archive tracks how these cases resolve, and a simple lumpsum returns calculator can show how an advertised fixed rate compares with mainstream regulated options, so a headline yield can be weighed rather than assumed.

The wider point is procedural: recovery in large default cases runs through decrees, attachments and settlement schemes over many years, and headline loss figures rarely translate into full repayment.

FAQ

Does a chargesheet mean the people named are guilty?

No. A chargesheet, an FIR and a provisional attachment contain allegations, not findings of guilt. NSEL, its former directors, 63 Moons Technologies and the defaulting members are accused in pending proceedings, and no court has convicted them. They are presumed innocent until proven guilty, and due process continues.

What did the Supreme Court actually decide on 15 May 2025?

The court held that assets attached under Maharashtra's MPID Act rank ahead of secured creditors' claims under the SARFAESI Act and the RDB Act, and remain available to the Supreme Court-appointed committee for executing decrees. It decided the question of priority over assets, not whether any individual committed an offence.

Have traders got their money back?

Only partly, and slowly. Against claims of about Rs 5,600 crore, decrees of roughly Rs 3,365 crore have been passed, and an NCLT-approved scheme proposes about Rs 1,950 crore for 5,682 traders. Distributions depend on executing decrees and liquidating attached assets, and the settlement scheme faces appellate challenge.

What is the NCLT settlement scheme?

It is a scheme of arrangement under Section 230 of the Companies Act, 2013, approved by NCLT Mumbai on 28 November 2025, proposing about Rs 1,950 crore for eligible traders in proportion to their dues, with trader rights assigned to 63 Moons. Its approval has been challenged before the appellate tribunal and is not yet final.

Where can I read the official judgment?

The Supreme Court judgment dated 15 May 2025 in Writ Petition (Civil) No. 995 of 2019 (2025 INSC 694) is available on Indian Kanoon. The NCLT and appellate proceedings on the settlement scheme are separate records.

This report is based on the Supreme Court of India judgment dated 15 May 2025 in Writ Petition (Civil) No. 995 of 2019 (2025 INSC 694) and NCLT and appellate records reviewed on 2 August 2026.