NSEL one-time settlement: NCLAT sets aside MMTC appeal after prior approvals

The National Company Law Appellate Tribunal has rejected an appeal by MMTC against a settlement between National Spot Exchange Ltd and its traders. The tribunal said the one-time settlement had already been upheld in earlier proceedings. It also noted that the Supreme Court affirmed the same outcome on March 9, 2026.

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The settlement involves National Spot Exchange Ltd, backed by 63 Moons, and traders with claimed dues of nearly Rs 4,300 crore. The Mumbai bench of the National Company Law Tribunal approved a Rs 1,950-crore scheme on November 28, 2025. MMTC, a state-owned trading firm, argued the plan harmed public interest and public policy.

NCLAT settlement scheme appeal by MMTC

During the hearing, NCLAT pointed out that the NCLT order dated November 11, 2025 was already approved earlier. NCLAT also said the Supreme Court later confirmed it in a civil appeal. The tribunal treated MMTC’s challenge as an attempt to revisit an issue already settled.

Additional Solicitor General Vikramjit Banerjee, appearing for MMTC, said an approved scheme can still be recalled. Vikramjit Banerjee argued this is possible if the scheme is later shown as fraudulent. Vikramjit Banerjee cited parts of the NCLT order to support that claim.

NCLAT settlement scheme and fraud claim

Vikramjit Banerjee said the NCLT order recorded incorrect facts about objections. Vikramjit Banerjee argued it wrongly stated the EOW and the MPID competent authority did not object. Vikramjit Banerjee claimed the wrong recording showed fraud. MMTC relied on those passages to seek reversal of the scheme.

NCLAT rejected that argument and focused on creditor support for the OTS. NCLAT said more than 90 per cent of creditors approved the plan. It also noted that from May-November 2025, MMTC did not challenge the resolutions. NCLAT said MMTC voted against the scheme but did not assail it then.

"We need to say the ASG had only pointed out to the paras of the impugned order to show the fraud is committed upon the NCLT but to our considered view, at best it can be treated as an incorrect finding but not fraud,\" NCLAT said. \"We need to note neither the ED nor EOW or MPID came up in appeal before this Court and none of these authorities even challenged the scheme before the NCLT.\"

NCLAT settlement scheme role of EOW and MPID

NCLAT also referred to an earlier NCLT order dated September 17, 2025. It said the order recorded that counsel for EOW and the MPID authority had no objection. The tribunal stressed that none of these authorities filed an appeal. It treated this as support for keeping the settlement intact.

Under the settlement scheme, traders agreed to withdraw all legal cases against NSEL and 63 Moons. The dispute traces back to July 2013, when the Department of Consumer Affairs asked NSEL to close contracts. That step worsened a payments crisis worth over Rs 5,400 crore, which led to years of litigation.

With inputs from PTI