In a setback to investors, a judge who was hearing the Rs 5,600-crore National Spot Exchange Ltd (NSEL) scam was asked to step down by the Bombay High Court.
According to a Mumbai Mirror report, the incident took place on Friday when City Civil and Sessions Court judge Ajay Dinode just before the start of a hearing was asked to meet the Principal Judge of the Sessions Court S B Aggarwal. Dinode left the court premise after the meeting.
The reason behind Dinode’s removal is still unknown but Registrar General of the Bombay High Court P V Ganediwala said it was an administrative call.
Last year in July, Judge Ajay Dinode was nominated to take charge of a fast-track court that was setup for speedy disposal of NSEL cases. Administrative committee of the judges of the Bombay High Court has decided to discontinue Dinode’s services who was on probation for the last two years.
About 13,000 investors are stuck due to the stalled judgement on the scam. The accused are still out on bail, including Financial Technologies (FTIL) founder Jignesh Shah who was granted bail by a special Prevention of Money Laundering Act (PMLA) court in August last year.
To expedite the NSEL proceedings, Maharashtra government had formed a taskforce in 2016. However, removal of Dinode may lead to delay in judgements.
NSEL's payment troubles started after it was ordered by regulator Forward Markets Commission (FMC) in July 2013 to suspend spot trade in most of its contracts due to suspected trading violations.
The exchange could not settle the outstanding trades, leading to investigations by the police and regulators to find out whether the exchange had defrauded traders by not enforcing rules requiring sufficient collateral to be set aside.
Financial Technologies India Ltd (FTIL) blamed NSEL executives and the trading parties for the default. There were 24 members who defaulted payment to about 13,000 investors.
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