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FMC asks NSEL to file recovery suits against defaulters

At a recent meeting with NSEL management and Monitoring and Auction Committee, FMC reviewed the recovery of dues from defaulters and asked NSEL to fasten the process and file the suits for realization of money.

twitter-logo PTI   New Delhi     Last Updated: July 14, 2014  | 16:34 IST
FMC asks NSEL to file recovery suits against defaulters
(Photo for representation only. Source: Reuters)

The Forward Markets Commission (FMC) has asked the National Spot Exchange (NSEL) to strengthen its recovery team and file suits in this regard against all defaulting members.

Of the 24 defaulters, only two members have paid fully while the rest 22 members are still defaulting on payments.

At a recent meeting with NSEL management and Monitoring and Auction Committee, FMC reviewed the recovery of dues from defaulters and asked NSEL to fasten the process and file the suits for realization of money.

The regulator said: "NSEL assured that they would take steps such as strengthening the recovery team at NSEL, filing of FIR and recovery suits against all defaulting members."

The commodity spot exchange, a subsidiary of the Jignesh Shah-led Financial Technologies India (FTIL), has recovered about Rs 356.39 crore of dues from defaulting members of the total outstanding amount of Rs 5,689 crore.

The spot exchange also said it will initiate proceedings under section 138 of Negotiable Instruments Act against defaulters and pursue the matters relating to realization of funds from cooperative firm NAFED and VAT related issues, the regulator said in a statement.

NSEL has been grappling with a payment crisis since suspending trade in July last year following a government order. Multiple agencies are probing its activities and assets of defaulters have also been attached.

The exchange has also sought the intervention of state governments to recover the dues from defaulters.

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