Modern India Limited & Ors. v. Financial Technologies (I) Ltd. & Ors.

4 of 69 Report 39 & 43.doc namely LOIL Overseas Foods Ltd., Punjab Greenfield Resources, LOIL Health Foods Ltd. and LOIL Continental Foods Ltd. claiming a sum of Rs.85,11,36,568.65 alongwith interest;

(ii) Third Party Notice No.14 of 2014 against LOIL Health

(iii) Third Party Notice No.13 of 2014 against LOIL

Continental Foods Ltd. claiming a sum of Rs.3,47,71,18,539.10 alongwith interest. The Third Party Noticees namely Applicants denied and disputed their liability by filing Affidavit in reply to the Notices. The LOIL Group (short for the three Noticees collectively viz. LOIL Overseas Foods Ltd., LOIL Health Foods Ltd. and LOIL Continental Foods Ltd.) were represented by Advocates before this Hon’ble Court and were heard when the order dated 02.09.2014 was passed by this Court appointing the Hon’ble HCC.

3.2. Pursuant to the above order of reference, LOIL Group filed Appeal No.283 of 2018 against the order dated 02.09.2014. It needs to be stated that this Appeal was disposed of by the Division Bench of this Court on 16.07.2018 (Coram: Naresh H. Patil and G.S. Kulkarni, JJ.) 5 of 69 Report 39 & 43.doc by observing that directions passed by the learned Single Judge while accepting Report No.14 of 2015 by its order dated 30.01.2018 were passed in light of the order dated 02.09.2014 which was in tandem with the powers and functions of the HCC.

3.3. On 22.10.2014, the HCC issued notices to the LOIL Group and called upon them to appear before the Committee and make their submissions. On 03.12.2014, NSEL filed a detailed note alongwith annexures showing the liability/amounts receivable from the LOIL Group before the HCC. HCC directed the LOIL Group to respond to the compilation of documents and the detailed note of liability submitted by NSEL. On 27.03.2015, NSEL filed three further compilation of documents pertaining to copies of ledger accounts of LOIL Group maintained by NSEL before the HCC. After taking them on record, by order dated 13.04.2015, HCC directed the LOIL Group to produce their books of account and comply with the earlier direction of HCC to respond to the note and compilation of documents filed by the NSEL showing its liability.

3.4. On 07.09.2014, the HCC submitted a Report being Report No.14 of 2015 before this Court requesting that notices be issued by this Court to the LOIL Group and Punjab Greenfield Resources Ltd. directing them to appear before the HCC and produce the documents as directed by HCC and comply with its directions. On 06.10.2015, this 6 of 69 Court passed an order in Report No.14 of 2015 directing the LOIL Group and Punjab Greenfield Resources Ltd. to appear before the HCC and produce the relevant documents.

3.5. On 10.10.2015, the LOIL Group appeared before the HCC without prejudice to their rights and contentions in the pending Appeal No.283 of 2018 challenging the appointment of HCC and filed 4 statements of facts and relevant dates and events raising an objection to the direction issued by HCC to produce their books of accounts and relevant documents. In effect, LOIL Group refused to produce their books of accounts and relevant documents before the HCC.

3.6. On 15.12.2015, LOIL Group filed written submissions before the HCC and moved an Application reiterating various objections to the jurisdiction and power of HCC to conduct the enquiry. On 29.01.2016, NSEL filed their written submissions before the HCC in reply to the Application moved by the LOIL Group challenging the jurisdiction and powers of the HCC. On 16.01.2017, HCC after considering the written submissions of the LOIL Group and NSEL, rejected the Application moved by LOIL Group challenging its jurisdiction and power.

3.7. On 24.10.2017, HCC issued a notice to the LOIL Group and Punjab Greenfield Resources Ltd. to appear before the HCC on 20.11.2017 and make their submissions. Between November 2017 and 7 of 69 February 2018, Advocate representing the LOIL Group appeared before the HCC and sought repeated adjournments.

3.8. In the meanwhile on 20.12.2017, the Appeal (being Appeal

(L) No.806 of 2014) which was filed by the LOIL Group was admitted by the Division Bench of this Court but prayer for interim relief was rejected. On 30.01.2018, this Court accepted Report No.14 of 2015 filed by HCC and directed the LOIL Group to comply with the directions contained in paragraph No.19 of the said Report and submit its statement of accounts/ledger account before the HCC.

3.9. On 01.02.2018, HCC called upon NSEL and the LOIL Group to file their respective statements of receipts and payments of all amounts paid by NSEL to the LOIL Group and their clients. On 15.02.2018, HCC called upon the LOIL Group to appear before the Committee on 01.03.2018 and comply with the directions issued by HCC and made it clear that upon failure to comply, the HCC would proceed to submit its Report to this Court on the basis of the available material produced by NSEL and the terms of reference. The LOIL Group did not adhere to this direction either and did not appear before the HCC.

3.10. Hence on 26.04.2018, Report No.39 was filed by the HCC before this Court.

3.11. Pursuant to the filing of the above report, on 22.06.2018 8 of 69 NSEL filed an Affidavit before the HCC requesting reconsideration of dis-allowances of the amounts on account of VAT obligations and warehouse receipt transfer charges and penalty for fund shortages to the tune of Rs.[5] Crores in the case of LOIL Continental Foods Ltd. as per the finding returned in paragraph No.49.[7] of the Report No.39. This Affidavit was filed pursuant to specific liberty granted by this Court to NSEL by order dated 13.06.2018 passed in Report No.39 of 2018 giving liberty to the parties to make the Application before the HCC. On 10.07.2018, LOIL Group filed its Reply dated 05.07.2018 to the Affidavit filed by NSEL.

3.12. On 11.07.2018, the LOIL Group filed Appeal No.283 of 2018 against the order dated 02.09.2014 appointing the HCC and the order dated 30.01.2018 passed by HCC accepting Report No.14 of 2015 and directing LOIL Group to comply with the directions in the said Report and submit their statement of accounts and ledger accounts before the HCC. By order dated 16.07.2018, the aforesaid Appeal filed by LOIL Group was disposed of by observing that the order dated 30.01.2018 has to be seen in the light of the order dated 02.09.2014 which was in tandems with the powers and functions of the HCC and did not grant any relief to the Noticees.

3.13. On 30.07.2018, HCC filed Report No.43 of 2018 after coming to a conclusion that since no amount was payable by LOIL 9 of 69 Continental Foods Ltd. to NSEL, no credit was required to be given to LOIL Continental Foods Ltd. for the amount of Rs.[5] crores as pointed out by NSEL. Accordingly, the HCC revised the already ascertained amount of Rs.315,01,58,696.30 due and payable by LOIL Continental Foods Ltd. to NSEL by adding the said amount of Rs.[5] Crores and freshly ascertaining the liability of Rs.320,01,58,696.30 of LOIL Continental Foods Ltd. The liability towards warehouse receipt transfer charges were not pressed by NSEL whereas amount towards penalty for fund shortage was disallowed by the HCC, which was accepted by NSEL.

3.14. Thus, the aforesaid two Reports are before me. Both the aforesaid Reports are comprehensive and detailed. In so far as Report No.43 is concerned, the same would be consequential to the outcome of Report No.39. I propose to deal with both the Reports.

4. Report No.39 is running into 46 pages and has 19 Exhibits i.e. Exhibit “A” to Exhibit “S” which are appended at page Nos.47 to 115 of the Report. Though the Exhibits which are appended are comprehensive, HCC has filed record of proceedings before the Committee relating to the LOIL Group and their clients in 10 volumes as under as stated in paragraph No.13 of the Report:- Volume No. Particulars Page No. / Exhibit No. Volume-I Order Sheets Pages 1 to 62 as per Index 10 of 69 Exhibit “B-1” Volume-II Notices and correspondence Pages 1 to 186 Exhibit “B-2” Volume-III Statements and Affidavits filed with the Committee in Pages 1 to 380 Exhibit “B-3” Volume-IV Statements and Affidavits filed with the Committee in Pages 381 to 428 Exhibit “B-4” Volume-V Statements and Affidavits filed with the Committee in Pages 678 to 987 Exhibit “B-5” Volume-VI Statements and Affidavits filed with the Committee in Pages 988 to 1297 Exhibit “B-6” Volume-VII Statements and Affidavits filed with the Committee in Pages 1298 to 1606 Exhibit “B-7” Volume-VIII Statements and Affidavits filed with the Committee in Pages 1607-1669 Exhibit “B-8” Volume-IX Statements and Affidavits filed with the Committee in 2016-17 Pages 1 to 77 Exhibit “B-9” Volume-X Statements and Affidavits filed with the Committee in Pages 1 to 698 Exhibit “B-10”

5. From the above, it is seen that substantial documents have been referred to, relied upon and considered by the HCC, all pertaining to the transactions of the LOIL group with NSEL, as maintained by NSEL in its books of account.

6. It is seen that in the meeting held on 03.12.2014, NSEL filed a detailed note of computation of the liability of LOIL Group alongwith 11 of 69 Report 39 & 43.doc annexures running into 268 pages showing as to how amounts were receivable by NSEL from the LOIL Group. Briefly stated, the amounts receivable at the foot of the accounts for the 3 entities of the LOIL Group are as under:- CM Name LOIL Overseas Foods Ltd. Rs. (Crores) LOIL Health Rs. (Crores) LOIL Continental Rs. (Crores) Total Rs. (Crores) Total Original Receivables 31.07.13

86.19 294.48 356.21 736.88 Total Fund Recd.

1.08 7.00 8.50 16.58 Balance amount receivable 21.11.14

85.11 287.48 347.71 720.30

7. Perusal of the Note and its annexures show that, pursuant to transactions between the parties, it is not a case where the LOIL Group has had no transactions with NSEL. Transactions between the parties clearly reveal that out of the total original receivables of 736.88 Crores, the amount of Rs.16.58 Crores has been received from the 3 entities/ Noticees of the LOIL Group by NSEL in the interregnum and the balance amount outstanding as on 21.11.2014 is Rs.720.34 Crores.

7.1. It is seen that on 27.03.2015, NSEL filed three separate compilations of documents relating to the three Noticees alongwith 12 of 69 Report 39 & 43.doc supporting copies of ledger accounts of all 3 Noticees, the Initial Margin Ledger, the member daily obligation ledger and Member’s Delivery Obligation ledger for the period from 01.04.2012 to 30.09.2013 alongwith the Trade Summary of the transactions for the period from 01.04.2012 to 30.09.2013 clearly showing the amounts outstanding as per NSEL’s accounts. Once this was done, the burden/onus shifted on the LOIL Group to refute the same with their statement of accounts and ledger accounts. HCC therefore issued a fresh notice to the LOIL Group on 27.03.2015 directing them to produce their books of accounts before the Committee and respond to the transactional documents submitted by the NSEL. Since there was no response whatsoever by the LOIL Group to HCC’s processes, HCC was compelled to file Report No.14 of 2015 dated 07.09.2015 in this Court for notices to be issued by this Court to the LOIL Group and direct them to appear before the HCC and produce their relevant documents as called upon by the Committee. By order dated 06.09.2015, the LOIL Group was directed by this Court to produce the documents and appear before the Committee and make their submissions and the Committee was directed to pass appropriate orders.

8. The Committee in paragraph No.19 of the Report has observed that in the meeting held on 10.10.2015 the Advocate representing the LOIL Group appeared before the Committee and filed 13 of 69 4 statements of facts and relevant dates and events while objecting to the directions issued by the HCC to the LOIL Group to produce its books of accounts and relevant documents. In effect, there was complete defiance of the order dated 06.09.2015 of this Court.

9. In the Report, HCC has noted in paragraph Nos.20, 21 and 22 about objections raised by the LOIL Group on behalf of all the three Noticees/Companies. The objections raised were to the effect that though NSEL claimed the amounts receivable from the LOIL Group, according to them they did not receive any such amount on account of any trading or otherwise from NSEL since the membership of all three entities/Noticees expired in March 2013 (31.03.2013) and thereafter they did not trade on the platform of NSEL. This defence of denial atleast confirmed the fact that prior to 31.03.2013, the LOIL Group did trade with NSEL on its platform. LOIL Group also raised a counter defense that it was to receive huge amounts from NSEL and its agents and that NSEL was unauthorizedly retaining huge amounts lying with it towards margin money. This defence, once again was without any details, insufficient and established the fact that the parties transacted on the NSEL platform. Nothing prevented the LOIL Group from placing on record its relevant documents to support its claim. The LOIL Group refrained from placing on record any documentary evidence in support of its alleged counter defence. 14 of 69

10. It is seen that the Application raising various objections to the jurisdiction of HCC to issue notices and to make Report to this Court to facilitate settlement between the parties was considered by the HCC exhaustively and by order dated 16.01.2017 at Exhibit “G” page No. 94, Application of the LOIL Group was comprehensively rejected. Points for determination framed by HCC are enumerated in paragraph No.20 and read thus: “(i) Whether in absence of consent of LOIL Group to the Hon’ble High Court Order dated 2nd September 2014, the Committee has power to issue notices to take accounts between NSEL and its members viz. LOIL Group?

(ii) Whether the issuance of various notices by the Committee to LOIL and directions contained therein are coercive in nature and not warranted by the order of the Hon’ble High Court dated 2nd September 2014?

(iii) Whether the notices issued by the Committee to LOIL and directions contained therein are in violation of the order of injunction passed in Suit No.765/2014 and in violation of the Doctrine of Comity and doctrine of Res-sub-judice?

(iv) Whether the directions contained in the various notices issued by the Committee to LOIL Group to produce Account Books and relevant documents are violative of Article 20(3) of the Constitution of India in view of the pendency of criminal investigation against LOIL Group?

(v) Whether the proceeding before Committee against LOIL

Group suffer from non compliance with the procedure prescribed under Rules 103 to 106 of the Bombay High Court (O.S.) Rules?”

11. The aforesaid points for determination are comprehensively considered in fact and in law by the HCC and by a reasoned speaking order determined in paragraph Nos.21 to 37 by HCC while rejecting the Application of LOIL Group. Thereafter by notice dated 24.10.2015, 15 of 69 HCC once again called upon the LOIL Group once again to appear before the Committee and make their submissions on the transactions between NSEL and LOIL Group and their clients. Incidentally Advocate for the LOIL Group appeared before the Committee on 08.12.2017, 05.01.2018 and 08.02.2018 sought repeated adjournments of the proceedings before the Committee. Thereafter, the Committee issued two fresh directions on 01.02.2018 and 15.02.2018 to the LOIL Group to appear before the Committee with a caveat that in the event if they do not appear and/or submit their say/relevant documents and statement of accounts, the Committee will proceed with submission of its Report before this Court in terms of the order of Reference dated 02.09.2014 for which the Committee was established.

12. LOIL Group did not appear before the Committee. In such circumstances, the HCC considered the documentary evidence filed by NSEL which included ledger accounts of transactions between NSEL and the LOIL Group for the period from 01.04.2012 to 30.09.2013, statement of accounts aggregating to the amounts paid by NSEL to the LOIL Group entities between 31.08.2012 and 31.07.2013 in the case of LOIL Overseas Foods Ltd. and for the period from 01.11.2012 to 31.07.2013 in the case of LOIL Continental Foods Ltd. and for the period from 30.11.2012 to 29.07.2013 in the case of LOIL Health Foods Ltd., the account head-wise details relating to each of the 3 16 of 69 Report 39 & 43.doc entities/Noticees including the transaction charges, warehouse receipt transfer charges, VAT and other charges, delivery shortage adjustment, member’s delivery obligation, penalty for fund shortage, service tax refund, and other charges and only thereafter determined the liability of the LOIL Group Companies to NSEL separately after a comprehensive analysis which is clearly evident from the findings returned by the Committee from paragraph Nos.31 onwards in Report No.39.

13. It is seen that the Committee has undertaken a laborious exercise of ascertaining the liabilities of each of the LOIL Group Companies/entities independently and individually on the basis of substantive documentary evidence produced by NSEL. Accordingly, the Committee after considering the entire documentary evidence placed before itself has concluded that amount of Rs.315,0158,696.30 as on 26.11.2014 is due and payable by LOIL Continental Foods Ltd. to NSEL, amount of Rs.265,86,86,913.50 as on 30.09.2013 is due and payable by LOIL Health Foods Ltd. to NSEL and amount of Rs.77,23,64,575.70 as on 31.08.2015 is due and payable by LOIL Overseas Foods Ltd. to NSEL.

14. I have perused both the Reports and the exhibits thereto and heard the learned Advocates appearing for the respective parties at length. Submissions made by the learned Advocates have received due 17 of 69 Report 39 & 43.doc consideration of this Court.

15. Mr. Kamat, learned Senior Advocate appearing on behalf of the Plaintiffs has at the outset drawn my attention to the observations and findings of the HCC in Report No.39 which begin at paragraph No.31 onwards to contend that the exercise undertaken by the Committee was after a thorough scrutiny of the ledger accounts/statement of accounts submitted by NSEL in respect of its transactions with the 3 entities of the LOIL Group separately. He would submit that on the basis of the ledger accounts and statement of accounts, HCC has determined that between 17.07.2013 and 26.08.2013, amount of Rs.28,20,00,000.00 was received from LOIL Overseas Foods Ltd. and likewise amounts of Rs.80,75,00,000.00 and Rs.46,35,00,000 were received by NSEL from LOIL Health Foods Ltd. and LOIL Continental Foods Ltd.

15.1. He would submit that as against this the LOIL Group Companies have not produced any material on record, despite repeatedly calling upon them and directing them to produce the same to indicate whether they did had received any stocks in respect of the settled trades against the aforesaid transactions. He would submit that it is unfathomable to think that despite depositing such large amounts with NSEL, the LOIL Group of Companies have refrained from disclosing their transactions and relationship. He would submit that 18 of 69 Report 39 & 43.doc response of the LOIL Group which is noted in paragraph No.31 of the Report, clearly shows that transactional relationship existed between the parties and parties had numerous transactions, inter se, between them. Incidentally, the same has been accepted by the LOIL Group also. Hence it was incumbent upon the LOIL Group to submit the relevant documents and its statement of accounts and comply with the directions issued by the HCC.

15.2. He would draw my attention to establish the fact that in the HCC meeting held on 01.03.2018, NSEL submitted copies of Application for membership with undertaking signed by each of the 3 LOIL Group Company whereby the said Company agreed to abide by and comply with and bound by the bye-laws and rules of NSEL. This is not refuted by the LOIL Group.

15.3. Next, he would submit that NSEL filed ledger extract of the accounts of each of the LOIL Group of Companies on Affidavit alongwith an extract of the Audit Report dated 02.04.2014 prepared by M/s. Sharp and Tannan Chartered Accountants computing and showing their outstanding liability which could not be merely refuted by expressing a denial. He would submit that to refute such liability, it was incumbent upon the LOIL Group to furnish its statement of accounts which it failed to despite repeated directions/orders by the Committee and two specific orders by this Court. 19 of 69

15.4. He would submit that in the above background, it was shocking that Affidavit dated 28.02.2018 of one Mr. Ashok Chopra, authorized representative of the LOIL Group was filed by their common Advocate merely denying the documentary evidence produced by NSEL and stating that it was not producing any documents at that stage and that documents submitted by NSEL are false and fabricated.

15.5. He would submit that in the wake of the above stand adopted by the LOIL Group towards it outstanding liability, the HCC was compelled to issue appropriate directions and call upon the LOIL Group to file their written submissions since the LOIL Group exhibited its defiance and non-cooperation by filing the aforementioned Affidavit. He would submit that incidentally the LOIL Group filed their written submissions by once again taking the following objections viz., that the Committee (HCC) did not have any adjudicatory power; that inspection of the original documents relied upon by NSEL was not granted to the Advocate for the LOIL Group; that no finding can be returned on the basis of disputed facts as the existence and contents of the documents produced by NSEL are disputed by the LOIL Group and in any event such documents are required to be proved by leading positive evidence and that Bye-law 3.[5] of the NSEL Bye-laws is void and unenforceable and no presumption can be drawn on the basis of the said bye-law. He would submit that such a stand adopted by the 20 of 69 LOIL Group proved that it did have transactions with NSEL.

15.6. He would submit that the aforesaid objections are completely misplaced in view of the fact that the power of the HCC i.e. Committee was clearly spelt out and described in the order dated 02.09.2014. He would submit that NSEL filed certificate dated 16.03.2018 under Section 65-B of the Indian Evidence Act, 1872 relating to the extract of the ledger accounts maintained by NSEL in respect of the 3 LOIL Group of Companies. He would submit that inspection of all records relating to the LOIL Group of Companies including all documents filed by NSEL was granted to the Advocate for the LOIL Group on 03.04.2018 in the office of the HCC in the presence of the Advocate for NSEL. He would draw my attention to the recording of this particular fact in paragraph No.43 of Report No.39 wherein it is stated so in the order dated 26.04.2018. I have perused the same. He would also draw my attention to the finding returned in paragraph No.44 wherein seeking directions to NSEL to provide inspection of documents was rejected as not bonafide by the Committee by giving cogent reasons therein.

15.7. He would submit that the analysis arrived at by the Committee in paragraph No.46 of the order passed in Report No.39 is such that the documentary evidence produced by NSEL is supported by material and cogent evidence in the form of ledger accounts and statements of accounts and all that the LOIL Group has done is to give 21 of 69 Report 39 & 43.doc a blanket denial of the material evidence produced by NSEL by withholding from the Committee, their own statements of accounts and ledger accounts. In its written submissions, LOIL Group has stated that they have supplied their ledger bills and accounts to the Economic Offences Wing and therefore they cannot/did not produce the same. HCC has observed that this can be no justification for refusal to produce the said details relating to their dealings with NSEL and such refusal to produce would lead to adverse inference against them.

15.8. He would next draw my attention to Bye-law No.3.[5] of the NSEL Bye-laws wherein it is stated that members agreed that records maintained by NSEL shall constitute a valid and binding evidence between the members and NSEL. He would submit that there is no denial of the fact that the three entities of the LOIL Group were not members of NSEL. In fact, they had substantial dealings with NSEL which are accepted by them and stand proven by the entries in the ledger accounts maintained by NSEL as also substantial amounts received by these Entities/Companies from NSEL pursuant to their trading transactions on the NSEL platform.

15.9. He would therefore urge the Court that crystallization of the liabilities of each of the three Entities/Companies of the LOIL Group has been comprehensively done by the HCC and submitted before this Court strictly in adherence to the directions contained in the order 22 of 69 Report 39 & 43.doc dated 02.09.2014 for determining the liability of payments to NSEL from the LOIL Group of Companies/Entities. He would therefore request the Court to accept the Report on the basis of the findings returned therein in favour of NSEL and against the LOIL Group of Companies and also determine the rate of interest as requested by the Committee and accordingly determine the Report.

16. In so far as Report No.43 is concerned, Mr. Kamat would submit that the said Report, inter alia, pertains specifically to LOIL Continental Foods Limited’s liability to NSEL wherein the Committee has on the Application received from NSEL revised the liability of LOIL Continental Foods Limited to Rs.347,71,18,539.00. He would submit that the recommendations made by the Committee in Report No.43 are based upon the documentary evidence and the Affidavit of NSEL enclosing the ledger extract of the said Company reflecting the statement of liability and the amount outstanding as per NSEL’s books of Accounts. He would submit that inadvertently the amount of Rs.[5] Crores was inserted in the table of liability but it was seen that the said amount was already credited to the said Company thereby arriving at the outstanding amount of Rs.347 Crores. He would draw my attention to the fact that this amount of Rs.[5] Crores was credited to LOIL Continental Foods Ltd. on 06.08.2013 and therefore it could not be reflected in the table of accounts which showed the accounts for the period from 01.09.2013 to 26.09.2014. He would therefore submit 23 of 69 Report 39 & 43.doc that this amount of Rs.[5] Crores is also due and payable by LOIL Continental Foods Ltd. to NSEL in addition to its liability determined in Report No.39 and accordingly the total amount due and payable by LOIL Continental Foods Ltd. to NSEL as on 26.09.2014 would therefore be computed at Rs.320,01,58,696.30 in place of the earlier amount of liability determined at Rs.315,01,58,696.30. He would therefore urge the Court to accept the recommendation made by the Committee with respect to modification of the above amount and pass appropriate orders by accepting the Report.

17. Ms. Gadagkar, learned Advocate appearing on behalf of NSEL has in support of the Plaintiffs/Applicants’ case made the following submissions and urged the Court to accept the Reports submitted by HCC:-

17.1. She would submit that HCC has conducted an extensively painstaking and elaborate exercise to determine the liability and every opportunity was given to each of the concerned LOIL Group of Entities, to place their relevant documents. Hence there is complete natural justice compliance, qua both the hearing parties as also the reasoning process carried out by HCC in determining the outstanding liabilities.

17.2. She would submit that the HCC after having scrutinised the relevant documents and statement of accounts/ledger accounts produced by NSEL and recording/observing that the LOIL Group of 24 of 69 Report 39 & 43.doc entities had failed to produce the documents inspite of several opportunities, determined that the amount of Rs.77.23,575.70 (Rupees Seventy-Seven Lakhs Twenty-Three Thousand Five Hundred and Seventy-Five and Seventy Paisa Only) is due and payable by LOIL Overseas Foods Ltd. to NSEL as on 31.08.2015.

17.3. She would submit that HCC after having scrutinised the relevant documents and statement of accounts/ledger accounts produced by NSEL and recording/observing that the LOIL Group of entities had failed to produce the documents inspite of several opportunities, determined that the amount of Rs.265,86,86,913.50 (Rupees Two Hundred and Sixty-Five Crores Eighty-Six Lakhs Eighty- Six Thousand Nine Hundred and Thirteen and Fifty Paise Only) as on 30.09.2015.

17.4. She would submit that HCC after having scrutinized the relevant documents and statement of accounts/ledger accounts produced by NSEL and recording/observing that the LOIL Group of entities had failed to produce the documents inspite of several opportunities, determined that the amount of Rs.315,01,58,696.30 (Rupees Three Hundred and Fifteen Crores One Lakh Fifty-Eight Thousand Six Hundred and Ninety-Six and Thirty Paise Only) as on 26.11.2014.

17.5. Next she would submit that HCC has made Report No. 43 25 of 69 Report 39 & 43.doc vide which if found that over and above the amount of Rs.315,01,58,696.30 (Rupees Three Hundred and Fifteen Crores One Lakh Fifty-Eight Thousand Six Hundred and Ninety-Six and Thirty Paise Only) payable by LOIL Continental Foods Ltd., a further amount of Rs.[5] Crores is also payable to NSEL.

17.6. She would submit that from commencement of the proceedings, LOIL Group despite denying and disputing, has consistently and deliberately not produced its relevant documents to show that the outstanding amounts claimed by NSEL are not payable by them. That record demonstrates that several opportunities were given to the LOIL Group and inspite of the same, they failed and neglected to produce their documents. That this is demonstrative of obstructive and wrongful conduct on the part of the LOIL Group, which would mean that they have nothing to dispute on merits and have only been reliant on dilatory tactics and technicalities to deflect their liability. An adverse inference is therefore liable to be drawn by this Court.

17.7. She would submit that due to continuous non-cooperation by LOIL Group, HCC was constrained to file Report No.14 before this Court, thereby seeking a direction to the LOIL Group to produce their documents before the HCC. That this Report No.14 was extensively heard by this Hon'ble Court and vide Order dated 30th January 2018 26 of 69 (Coram: S.J. Kathawalla, J) this Court directed the LOIL Group of entities to produce their documents before the HCC.

17.8. She would submit that instead of producing the documents, LOIL Group carried the said order in Appeal. By Order dated 16.07.2018 passed by the Division Bench of this Court, the Appellate Court confirmed the Order dated 30.01.2018 and at paragraph No.7 directed the LOIL Group to comply with the directions passed by the Ld. Single Judge in Order dated 30.01.2018. By this Order, LOIL Group was for the second time directed by this Court to produce documents before the HCC which they blatantly failed and neglected to abide by.

17.9. Next she would submit that the LOIL Group has not produced any material before the HCC to indicate that LOIL Group has not received any stocks in respect of the settled trades nor LOIL Group submit any documents neither complied with directions issued by HCC by their letter dated 01.02.2018.

17.10. She would submit that LOIL Group entities did not produce before HCC statement of accounts maintained by them of their transactions on NSEL platform nor did they produce any evidence or document to disprove the correctness of the statement of accounts and entries made in the ledger account maintained by NSEL. Furthermore, LOIL Group did not produced any material to indicate that at any time prior to August 2013, they had raised any objection or dispute relating 27 of 69 Report 39 & 43.doc to any of the entries made by NSEL in the accounts and records related to the LOIL Group and submit any objection to the accounts produced by NSEL.

17.11. She would submit that NSEL produced various documents to prove the outstanding liability of the LOIL Group of entities before the HCC viz.

(i) Ledger accounts; (ii) Statements of Receipts & Payments;

(iii) Bank Statements evidencing receipt and payment of accounts, which the HCC has recorded at paragraph No.31 of the Report (iv) Extracts of audit Report by M/s. Sharp and Tannan Chartered Accountants confirming liability of LOIL Group of entities which the HCC has- recorded at paragraph No.35 of Report No.39; (v) Summary of Daily Obligation Reports - Annexures “K” to “S” to the Report; and

(vi) the Trading Cum-clearing Membership Undertaking dated

18.08.2012 executed by each of the LOIL Group of entities whereby they agreed to abide and comply with and bound by the bye-laws and rules of NSEL.

17.12. She would submit that LOIL Group submitted that the ledger account produced before the HCC was not part of the Third-Party Notice and the same are therefore disputed by them. According to him, this is a wholly unmeritorious contention. In this regard, he submitted that in the TPN, which was taken out by NSEL against the LOIL Group, there is a categorical averment that LOIL Group being a 28 of 69 Report 39 & 43.doc defaulting member is absolutely liable for making payments towards the alleged claims of the Plaintiff and that NSEL is not liable for the same. After filing TPNs against LOIL Group, i.e., TPN No. 6 of 2014 dated 22.04.2014 against LOIL Overseas Foods Ltd., TPN No. 14 of 2014, TPN No. 13 of 2014, the 2014 Order came to be passed. As recorded in the said Order, the parties were required to provide all documents including books of accounts/ledgers before the HCC in terms of the powers and functions conferred upon the HCC, as such there was no question to produce the same along with the TPN itself before this Court.

17.13. She would submit that the HCC also considered the challenge to Bye-Law 3.[5] of NSEL and at paragraph No. 46.[1] of Report No. 39 and at paragraph No.46.[9] of Report No. 39 rightly observed that since the LOIL Group had been trading members of NSEL, they voluntarily agreed to be bound by the Bye-Laws of NSEL and having traded on the NSEL platform and received substantial benefit from such trade, it rightly rejected LOIL Group's challenge to clause 3.[5] as being unconscionable and opposed to public policy and held that the ratio of the judgments cited were not applicable to the proceedings.

17.14. She would submit that in addition to its dishonest, obstructive and wrongful conduct, malafide intention of the LOIL Group of entities in not producing its books of accounts/documents 29 of 69 Report 39 & 43.doc and plainly denying the documents/ledger produced by NSEL is evident to cause delay and evade its accountability and liability. At every stage, proceedings before this Court and the HCC have been sought to be undermined and the LOIL Group has filed 13 Suits before the District Judge, Fatehgarh Saheb, Punjab, inter alia, for rendition of accounts of NSEL. This was being done in the face of present proceedings pending before the HCC and this Court, where it was the LOIL Group of entities who was required to produce their accounts.

17.15. She would conclude her arguments by submitting that the LOIL Group has filed three Interim Applications viz., (i) IA (L.) NO. 26300 of 2022, (ii) IA (L.) No. 26401 of 2022 and (iii) IA (L.) NO. 26563 of 2022, thereby praying that issues be framed as per the provisions of Order XIV of the C.P.C. by completely misconstruing the Order dated 16.07.2018 and hence the same may be dismissed in limine.

18. PER-CONTRA, Mr. Ghogare, learned Advocate appearing for the contesting LOIL Group of Companies namely LOIL Overseas Foods Ltd.’, LOIL Health Foods Ltd. and LOIL Continental Foods Ltd. would at the outset submit that the three Noticees have filed three separate Interim Applications namely Interim Application (L.) No. 6300 of 2022; Interim Application (L.) No.26401 of 2022 and Interim Application (L.) No.26563 of 2022 in Report No.39 seeking to lead 30 of 69 Report 39 & 43.doc oral and documentary evidence with regard to its books of accounts, balance-sheet, tax returns, tax assessments, etc. against the liability which is crystallized in Report No.39 and place the same before this Court for acceptance.

18.1. Mr. Ghogare is very clear in his submission and would urge the Court that for doing so, the LOIL Group desires that it shall not go before Committee but call upon this Court to frame issues in respect of determination of liability of LOIL Group of Companies to determine the same by allowing the LOIL Group to lead appropriate evidence and raise its defences against the Report. He would submit that the LOIL Group has filed 9 Volumes of documents alongwith an exhaustive list of dates and events and these 9 Volumes of documents are placed before me at the time of reply for the first time. He has also drawn my attention to the Affidavit-in-Reply dated 10.07.2018 to Report No.39 and has referred to and relied upon 19 judgments in support of his submissions.

18.2. He would submit that Interim Applications have been filed by LOIL Group of Companies for framing of issues. On a direct question being asked to Mr. Ghogare as to why the said documents which are contained in the 9 Volumes are not produced before Committee, he has no answer to the same. This also shows that these documents were available with the Noticees but they despite repeated 31 of 69 Report 39 & 43.doc directions and orders, not only from the Committee but even this Court failed to produce the same.

18.3. In the above background, he would submit that paragraph No.8 of the order dated 16.07.2018 passed in Appeal (L.) No.301 of 2018, according to him goes to the root of the matter. He would submit that the Division Bench of this Court while determining Appeal (L.) No.301 of 2018 in its order dated 16.07.2018 at paragraph No.8 passed the following order:-

18.4. He would submit that the Division Bench of this Court clearly recorded that appropriate issues in determining liability in accordance with law will have to be considered by this Court while accepting the Report, as acceptance of such Report shall be subject to the objections filed by the contesting parties. He would submit that the Noticees in the present case, whom he is representing are contesting third party proceedings which in effect is like a Suit proceedings and such third party Noticees have a substantive right of defence and would be entitled to lead evidence. Hence he would submit that the existence of the words ‘issues’ in paragraph No.8 quoted above on which emphasis is supplied should be considered by the learned Single Judge as 32 of 69 Report 39 & 43.doc requiring and allowing the contesting parties to raise and frame issues, commence a trial on those issues and only thereafter accept the report or determine the liability of the Noticees. Whether it would amount to this Court requiring to frame issues will be adverted by me in my findings later.

18.5. While drawing my attention to the order dated 02.09.2014 and Report No.39, he would make the following submissions:-

(i) That HCC i.e. Committee was constituted pursuant to order dated 02.09.2014 passed by the learned Single Judge and the said order is aptly clear that settlement has to be explored mutually between the parties and that the said order does not contemplate that the Hon'ble Committee has the power to discharge any adjudicatory function;

(ii) That it is essential to take note of the observations of the Division Bench in its order dated 17.06.2015. The Division Bench order was passed after hearing Appeals filed against the order dated 02.09.2014 and the Division Bench has categorically held that the Committee shall not have any adjudicatory powers;

(iii) That the Committee does not have any adjudicatory powers and it can only explore mutual settlements 33 of 69 Report 39 & 43.doc between parties and has to act within the four corners of the mandate of the order dated 02.09.2018;

(iv) That the Single Judge of this Court by order dated

30.01.2018 was pleased to accept Report No.14 and recommendations of the Committee in paragraph No.19 of the said Report;

(v) That the Third Party Noticees had challenged the said order dated 30.01.2018 by filing Appeal (L.) No.301 of 2018;

(vi) That, on 16.07.2018, after hearing the Third Party

Noticees, the Division Bench of this Court in Appeal (L.) No.301 of 2018 was pleased to hold that the powers of the Committee are restricted to calling for information and arriving at proposals of settlement in conjunction with the parties before the Court for collection and custody of the funds and assets involved to the present Report. He would submit that the observations of the Division bench are binding as the same have attained finality. He would draw my attention to paragraph Nos.[4] to 8 and the same are reproduced verbatim as follows:- “4. The learned Senior Counsel for the appellants 34 of 69 Report 39 & 43.doc submits that the said report dated 26th April 2018 will now be placed before the Single Judge when the matter will be listed day after tomorrow. The learned Senior Counsel for the appellants has serious apprehension in view of the directions and observations made by the Committee in paragraph 46.5, 47.14 and 48.13 of the report which amounts to determination of the liability. As a principle of law, the learned Counsel submits that a commission appointed as per the order of the learned Single Judge, does not have jurisdiction to determine the liability of the party. The appellants apprehend that in case of non-compliance of directions issued in paragraph 23 the appellants may suffer serious adverse consequence, therefore, the learned Counsel seeks protection for the appellants.

5. The learned Counsel for the respondents submits that the apprehension expressed by the appellants is misplaced. At the time when the impugned order is passed, the report dated 26th April 2018 was not a part of the record, nor it was available to the learned Single Judge for consideration of the issue. In view of the reluctance of the appellants to co-operate with the committee, the learned Single Judge passed the order which is perfectly in consonance with the view adopted by the learned Single Judge (S.C. Gupte, J.) for the object and purpose for which the committee of three members was constituted (retired Judge of this Court). The learned Counsel submitted that the appellants are entitled to list their objections and press them before the learned Single Judge in respect of the report submitted by the committee. The learned Counsel does not dispute the proposition that it is for the Court to determine the liability and therefore, the appellants need not have an apprehension of any sort that their objections would not be taken into consideration.

6. We considered the submissions advanced and perused the record placed before us. We reiterate that the committee shall function and discharge its duties in accordance with the orders passed by the Division Bench as reproduced above. We have perused the order dated 2nd September 2014 passed by the learned Single Judge (page 117). In letter and spirit, the essence of the order read with the provisions of Code of Civil Procedure would reflect that the powers of the Committee are restricted to calling for information and arrive at proposals of settlement in conjunction with the parties before the Court for collection and custody of the funds and assets involved. The learned Single Judge permitted the committee to call upon the various defaulting members or other parties and seek information and documents for the purpose of determining the extent of liability, if any, 35 of 69 Report 39 & 43.doc by making a report to the Court for further directions.

7. The directions issued by the learned Single Judge to the appellants to comply with the direction of paragraph 19 shall be therefore read and understood in the light of the reference made by the learned Single Judge (S.C. Gupte, J.), the committee and the order passed by the Division Bench of this Court.

8. Needless to mention that the report submitted by the committee shall be subject to the objections filed by the contesting parties which the learned Single Judge would take into consideration and deal with the appropriate issues in determining the liability in accordance with law.”

(vii) He would submit that the order dated 30.01.2018 has merged in the above referred order dated 16.07.2018 passed by the Hon'ble Division Bench; (viii)From the reading of the above referred orders, he would submit that the powers of the Committee are restricted to calling for information and arriving at proposals of settlement in conjunction with the parties before the Court for collection and custody of the funds and assets involved and that the Committee did not and does not have adjudicatory powers.

18.6. He would submit that the Committee by crystallizing the liability has not followed instructions of this Court and as such Report No.39 is required to be ignored. In view of his above submissions, he would submit that the Committee did not have the power to proceed further in the matter after the LOIL Group did not want to mutually 36 of 69 Report 39 & 43.doc settle with Defendant No.2 – NSEL.

18.7. Next, he would draw my attention to the Commissioner’s Report and submit that the Report by the Committee cannot be the only basis for adjudication and must be considered along with other evidence; That the LOIL Group has the right to test the said report at trial, including by testing the correctness and contents of the Report as per the principles of the Evidence Act and other provisions of law and also by leading its own evidence and that in the present matter reliance cannot be placed on the said Report as it is based on disputed facts and no evidence.

18.8. He would submit that no findings can be given in the present matter as there is no positive evidence either before the Committee or this Court and that it is a well-established principle of law that no finding can be given on the basis of disputed facts. He would argue that the LOIL Group in its Affidavits of admission and denial of documents dated 27.02.2018 and 06.03.2018 has dealt with the all the documents sought to be relied upon by the LOIL Group wherein the LOIL Group has denied all the documents including their existence and contents. He would argue that despite such denial no attempt has been made to prove the existence or contents of those documents in accordance with the law.

18.9. He would next submit that in the present matter, Defendant No.2 - NSEL has only produced a ledger which has been disputed by 37 of 69 Report 39 & 43.doc the LOIL Group and that the said ledger cannot be even called books of accounts. Hence findings based solely on the disputed ledger will be contrary to Section 34 of the Indian Evidence Act,1872 and therefore findings based on such disputed ledger are required to be ignored by this Court.

18.10. He would next argue that till date, the LOIL Group has not received inspection of original copies of the documents sought to be relied upon by Defendant No.2 in the proceedings before the Hon'ble Committee. He would contend that Defendant No.2 - NSEL has suppressed the original copies from LOIL Group and has denied them the opportunity of examining the authenticity of the said documents and that this conduct of Defendant No.2 - NSEL is against the principles of natural justice, fair play and against provisions of C.P.C. and more particularly Order XI thereof. In view of the above, he would pray that the Court ignore all the documents submitted by Defendant No.2 - NSEL and proceed with the present matter in accordance with law by framing issues.

18.11. Next, he has drawn my attention to clause 3.[5] of NSEL’s Bye- Laws on which Defendant No.2 - NSEL has placed much reliance. The said clause is reproduced as follows:- “3.[5] RECORDS FOR EVIDENCE: The records of the Exchange as maintained by a central processing unit or a cluster of processing units or computer processing units or on "NEST" or any other trading system of the Exchange, whether maintained in any register, magnetic storage units, electronic storage 38 of 69 Report 39 & 43.doc units, optical storage units or computer storage units or in any other manner or on any other accepted media, shall constitute the agreed and authenticated record in relation to any transaction entered into or executed through "NEST" or any other trading system of the Exchange. The records as maintained by the Exchange shall, for the purpose of any dispute or claim between the numbers of the Exchange inter-se or between any exchange member and his clients or between the members of the Exchange and the Exchange or the Clearing House regarding trading, clearing or settlement of any or transaction carried out "NEST" or any other trading system of the Exchange and reported to the Exchange, constitute valid and binding evidence between and among the parties."

18.12. He would submit that the said clause 3.[5] is against public policy of India and that Defendant No.2 - NSEL at the relevant time was in a dominant position and in misuse of its powers incorporated the said clause to gain undue advantage. He would submit that the allegations against Defendant No.2 - NSEL with regard to misuse of its powers in Suit No.173 of 2014 are serious and the particulars of fraud played by Defendant No.2 and its management at the relevant time have been set out at paragraph Nos.35 to 37 (page Nos.71 to 90 of the Plaint in the Suit). He would submit that the allegations at paragraph No.37 are to the extent that Defendant No.2 - NSEL was promoted as an instrument of fraud and with a view to create an unregulated market where its activities would be free of oversight of any authority and Defendant No.2 - NSEL has accepted the allegations of fraud and has not filed its written statement.

18.13. He would place reliance on the following judgments in 39 of 69 Report 39 & 43.doc support of his above contentions:-

(i) National Spot Exchange Limited Vs. State of

Maharashtra[1]; (ii) 63, Moons Technologies Limited (formerly known as Financial Technologies India Limited) Vs. Union of India and Others[2]; and

(iii) State of Maharashtra Vs. 63, Moons Technologies

18.14. Next, he would submit that clause 3.[5] of the NSEL’s Bye- Laws is an unconscionable clause in furtherance of the fraud played by Defendant No.2 – NSEL and it seems that with a view to protect itself from any liability this clause was incorporated in the Bye-laws to prevent any innocent entity/person/trader etc. from challenging contents of its documents even if the same are incorrect, not true or are false; that clause 3.[5] has been inserted in the said Bye-Laws by Defendant No.2 - NSEL in misuse of its dominant position. He would place reliance on the observations of the Supreme Court in the case of Central Inland Water Transport Corporation Ltd. Vs. Brojo Nath[4], AIR 1986 SC 1571 at paragraphs 89 to 94 and submit that in view of the law laid down in the above decision, clause 3.[5] of the bye-laws is an unconscionable term and is opposed to public policy of India and that clause 3.[5] has been incorporated to circumvent provisions of various

18.15. He would submit that clause 3.[5] of the Bye-laws is against the provisions of the Indian Evidence Act, 1872; the C.P.C and also the Indian Contract Act, 1872. Further he would submit that clause 3.[5] of the Bye-laws has an effect of substituting the contractual provision in place of statutory provisions, which is not permissible in India; that the said clause is interfering in the judicial function and dispensation of justice.

18.16. He would submit that clause 3.[5] by giving finality to the records maintained by Defendant No.2 - NSEL seeks to defeat the provisions of the Indian Evidence Act and thereby interferes in dispensation of justice by courts; that it in effect takes away the right of any party, entity, etc. to question the contents of the records maintained by Defendant No.2 - NSEL even if the contents of the said record are false or incorrect or fabricated; that the said clause if enforced would ensure that Defendant No.2 - NSEL would get a decree or award in its favour even if the records maintained by Defendant No.2 - NSEL are false or incorrect or fabricated. He would contend that this may lead to a situation where a Court would give its imprimatur to a decree or order or award which is based on documents, the contents of which are false or incorrect or fabricated.

18.17. Next, he would submit that the C.P.C. contains the procedure 41 of 69 Report 39 & 43.doc to be followed by Civil Courts in adjudication/determination of civil disputes between parties and the entire procedure starting from jurisdiction of Courts, manner of instituting suits, place of suing, first step in the suit, documents and witnesses, hearing and disposal, execution of decrees, appeals from original decrees, appeal from appellate decrees, etc. is provided for by the C.P.C. and the important procedural aspects of C.P.C would become ineffective as finality would have to be given to the said records even if they were false or incorrect or fabricated.

18.18. In support of his submission that any contractual term between parties to defeat provisions of law is unenforceable under Section 23, he has referred to and relied on the following judgments:-

(i) Harshad Chiman Lal Modi Vs. DLF Universal Ltd. and

(ii) Murlidhar Aggarwal and another Vs. State of Uttar

(iii) Sri Krishna Khanna Vs. Additional District Magistrate,

18.19. He would submit that clause 3.[5] of the Bye-Laws is in restraint of legal proceedings as it absolutely prevents any entity/party/LOIL Group from enforcing its rights based on averments/ pleadings or evidence contrary to the records of Defendant No.2 –

42 of 69 NSEL, that clause 3.[5] of the said Bye-laws is clearly hit by Section 28 of the Indian Contract Act, is void and unenforceable.

18.20. He would submit that the party coming to Court must prove its case by leading positive evidence and if a party fails to give positive evidence its claim is required to be dismissed; that judicial finding cannot be based only on adverse inference; that no adverse inference can be drawn before trial in the proceedings; that Committee does not have the power to give any finding based on adverse inference.

18.21. He would conclude his arguments by submitting that the Interim Applications are therefore required to be allowed and issues are required to be framed in the present Third-Party Proceedings in accordance with the Original Side Rule 114 read with Order XIV of C.P.C. and that the trial in the present matter is required to be commenced and the LOIL Group of entities be permitted to lead evidence in the present matter.

19. I have heard the detailed submission and arguments advanced by the learned Advocates for the respective parties. Submissions made have received due consideration of the Court.

20. At the outset, it is seen that the Noticees represented by Mr. Ghogare have raised an objection to the functions and powers of the High Court Committee constituted by this Court vide order dated 02.09.2014. A belated challenge is also filed by these Noticees after four years of the passing of the order being Appeal No.283 of 2018 43 of 69 Report 39 & 43.doc before the Division Bench. The order of Division Bench dated 16.07.2018 in this regard is crucial. It rejects the Appeal. The Division Bench in paragraph Nos.6, 7 and 8 passed the following directions:- “6. We considered the submissions advanced and perused the record placed before us. We reiterate that the committee shall function and discharge its duties in accordance with the orders passed by the Division Bench as reproduced above. We have perused the order dated 2nd September 2014 passed by the learned Single Judge (page 117). In letter and spirit, the essence of the order read with the provisions of Code of Civil Procedure would reflect that the powers of the Committee are restricted to calling for information and arrive at proposals of settlement in conjunction with the parties before the Court for collection and custody of the funds and assets involved. The learned Single Judge permitted the committee to call upon the various defaulting members or other parties and seek information and documents for the purpose of determining the extent of liability, if any, by making a report to the Court for further directions.

7. The directions issued by the learned Single Judge to the appellants to comply with the direction of paragraph 19 shall be therefore read and understood in the light of the reference made by the learned Single Judge (S.C. Gupte, J.), the committee and the order passed by the Division Bench of this Court.

8. Needless to mention that the report submitted by the committee shall be subject to the objections filed by the contesting parties which the learned Single Judge would take into consideration and deal with the appropriate issues in determining the liability in accordance with law.”

20.1. Thus, it is seen that after considering the submissions the Division Bench specifically reiterated that the Committee shall function and discharge its duties in accordance with the orders passed by the Division Bench. It further noted that by virtue of the said order dated 02.09.2014, the Committee was permitted to call upon various defaulting members or other parties (in this case the third party 44 of 69 Noticees) and seek information and the documents for the purpose of determining the extent of liability, if any, by making a report to the Court for further directions. It in effect upheld the order dated 02.09.2014 and held that the report submitted by the Committee shall be subject to the objections filed by the contesting party which the learned Single Judge would take into consideration and deal into issues in determining the liability in accordance with law. The fulcrum of the arguments of the Noticees is that the learned Single Judge should now frame appropriate issues to determine the liability and allow the Noticees to lead evidence and embark upon a trial.

21. The Noticees would have been right in contending the above proposition provided they would have cooperated with the Committee and furnished their relevant documents and statement of Accounts to enable the Committee to give its recommendations to this Court after analying the case of both sides. However, the Noticees despite specific directions issued to them did not cooperate with the Committee. The first instance of the Committee directing the Noticees to appear and make their submissions was passed on 22.10.2014. The second direction was passed on 03.12.2014. The third direction was passed 13.04.2015 when the Committee directed the Noticees to produce their Books of Accounts and comply with the directions of the Committee and respond to compilation of documents relating to their transactions alongwith copies of their ledger accounts which were maintained by 45 of 69 NSEL and filed before the Committee. This was the first effective direction given by the Committee to the Noticees in view of the specific functions and powers of the Committee enumerated in paragraph No.14 of order dated 02.09.2014. It is shocking and equally surprising that the Noticees were duly represented by Advocates when the order dated 02.09.2014 was passed. The said order broadly and clearly lays down the jurisdiction, functions and powers of the Committee to determine the amounts payable by the alleged defaulters/third parties (in this case the three Noticees) of NSEL; to ascertain assets of the alleged defaulters/third party (in this case the three Noticees) and amounts received directly are indirectly from NSEL (in this case by the three Noticees) in respect of various trades; to explore and negotiate a mutual settlement with the third parties and their client (in this case the three Noticees); and seek appropriate directions from this Court for sale/monetisation of the assets, both immovable and/or movable of the alleged defaulting members and their clients (in this case the three Noticees) and any other persons. The submissions advanced by the Noticees before me that the Committee does not have any power to call upon the Noticees to respond to the documentary evidence filed by NSEL or call upon the Noticees to file their say cannot be countenanced in view of the specific functions and powers laid down in the order dated 02.09.2014. All that the three Noticees have exhibited thereafter is nothing but non-cooperation and non-disclosure 46 of 69 Report 39 & 43.doc of their documents before the Committee. It is intriguing to note that because of the initial non-cooperation of the three Noticees, the Committee filed Report No.14 of 2015 in this Court. The High Court appointed Committee was virtually helpless and it called upon this Court requesting that notices be issued to the three Noticees and direct them to appear before the Committee and to produce the relevant documents. This report was determined by this Court by order dated 06.10.2015 directing the three Noticees to appear before the Committee and produce the relevant documents. It is seen that on 10.10.2015, the three Noticees appeared before the Committee and objected to produce their Books of Accounts and relevant documents. It is shocking and once again equally surprising that on 15.12.2015, the three Noticees filed written submissions before the Committee raising various objections to the Committee’s jurisdiction and various powers. These written submissions were considered by the Committee and comprehensively rejected by order dated 16.01.2017. It is seen that on 24.10.2017, fresh notices were issued to the three Noticees to appear before the Committee and make their submissions. Thereafter the Advocate for the three Noticees appeared before the Committee and sought repeated adjournments. Fresh directions were thereafter issued by the High Court on 30.01.2018 to comply with the directions passed earlier and to submit statement of Accounts and ledgers before the Committee. Further directions for disclosure was passed on 47 of 69 01.02.2018. Ultimately on 15.02.2018, the Committee called upon the three Noticees to appear before the Committee and comply with directions with a caveat that on failure to do so the Committee will proceed to submit the report to the High Court. From the above timeline it is clearly seen that the Committee has on 8 number of occasions called upon the three Noticees to appear, make submissions, respond to the compilation of documents submitted by NSEL and furnish their Books of Accounts and ledger Accounts on 22.10.2014, 03.12.2014, 13.04.2015, 06.10.2015 (by High Court), 24.10.2017, 30.01.2018 (by the High Court), 01.02.2018 and 15.02.2018. The timeline covering the above period begins from 22.10.2014 and is upto 15.02.2018 which is almost more than three and half years. The noncooperation and non-disclosure blatantly exhibited by the three Noticees is writ large on the face of record and it is apparently clear that the three Noticees not only derelicted in producing their documents and ledger Accounts but were also in clear breach of the orders passed by this Court on 06.10.2015 and 30.01.2018. In terms of the Reference made to the Committee it is clearly seen that determination of the amounts payable by the alleged defaulters/third parties, ascertainment of their assets and amounts received by them in respect of various trades and exploring and negotiating a mutual settlement could only be done by the Committee with cooperation from the third party Noticees in this case. The conduct of the three 48 of 69 Noticees in this case therefore is such that they were not only reluctant to cooperate but willfully disobeyed the orders passed by this Court and the directions given by the Committee leaving no option for the Committee than to scrutinize the ledger Accounts and statement of Accounts submitted by NSEL before the Committee in respect of transactions and dealings with the three Noticees and determine the amounts payable by the three Noticees to NSEL.

22. The stand adopted by the three Noticees in this case on Affidavit dated 28.02.2018 of one Mr. Ashok Chopra being the authorised representative of the three Noticees is that the documents submitted by NSEL were false and fabricated. If this be the case then the documents submitted by NSEL could have been proven false and fabricated only by the three Noticees themselves by producing their ledger Accounts. The three Noticees refused to submit their accounts and documents. In paragraph No.39 of the Report, the Committee records the statement of the Advocate of the three Noticees that they do not want to comply with the directions issued by the Committee at this stage. In view of this, the Committee permitted the three Noticees to file their submission which would be considered by the Committee while crystalising their liability, if any. It is seen that in the written submissions also the three Noticees are completely non-cooperative. All that they would contend is that they disputed the facts and the existence and contents of the documents produced by NSEL before the 49 of 69 Committee. Notwithstanding the fact that NSEL had filed before the Committee Certificate dated 16.03.2018 under Section 65-B of the Indian Evidence Act, 1872 relating to the extract of ledger Accounts maintained by NSEL in respect of the three Noticees specifically. On the only other objection regarding non-grant of inspection of records in paragraph No.43, the Committee returns a finding that the Advocates of the three Noticees were granted inspection on 03.04.2018 in the office of the Committee in the presence of Advocate for NSEL. In paragraph No.45 the Committee clearly records in respect of annexing the ledger accounts of the three Noticees as maintained in the record of NSEL were infact received by the three Noticees including the compilation of documents as analysed and recorded in paragraph No.16 of the Report showing amounts outstanding as per NSEL. However, the three Noticees before me chose not to comply with any of the directions issued by the Committee and made a categorical statement to that effect. In so far the powers of this Court are concerned, the Committee has sought appropriate directions from the Court after making the Report with respect to the liabilities of the three Noticees in the present case.

23. It is clearly seen that the Committee has not only considered the submissions made by the three Noticees which are clearly referred to in paragraph Nos.20 to 22 and has observed that except denying the existence and correctness of the account statements and relevant 50 of 69 Report 39 & 43.doc documents produced by NSEL, the three Noticees have not produced any document or evidence to dispute any of the entries in the Bank statements and ledger accounts produced by NSEL. The bald submission of the three Noticees that the Balance sheet of NSEL on 31.03.2013 shows ‘NIL’ balance against the LOIL Group (the three Noticees) has been considered thoroughly, and after considering the ledger Accounts produced by NSEL, the Committee has returned a finding that on scrutiny of the transactions for sale of commodities by NSEL, it is seen that T+1 and T+2, T+24 and T+25 sale plus purchase transaction of commodity has been settled by delivering and/ or payments except sale transaction entered into after 21.02.2013 in the case of LOIL Overseas Foods Limited; after 07.02.2013 in case of LOIL Health Foods Limited and LOIL Continental Foods Limited. After carrying out the above exercise the Committee has observed that the claim of the three Noticees that they had not traded on the NSEL platform after 31.03.2013 clearly stands disproved by the ledger Accounts produced by NSEL and the statements made by the three Noticees in their statement of facts dated 10.10.2015 itself. It is seen that the Committee has considered the original Affidavit dated 03.10.2015 filed by Mr. Santosh Dhuri of NSEL relating to the three Noticees with copies of ledger Accounts maintained in the record of NSEL. It is seen that at the meeting held on 27.03.2015, NSEL filed three compilation of documents relating to the three Noticees with 51 of 69 Report 39 & 43.doc specific details relating to Initial Margin Ledger, Member’s Daily Obligation Ledger for the period 01.04.2013 to 30.09.2013, Trade Summary for the period of of 01.04.2013 to 30.09.2013 alongwith the detailed note titled ‘Description of Ledger Entries in NSEL’s Books of Accounts’ showing amounts due as per NSEL. Thus from 2015, the three Noticees had sufficient time. Not only they had the benefit of the entire accounts produced by NSEL, they also had the benefit of their own accounts which they could have produced but defence was taken by them subsequently after three years that they have given their ledger Accounts to the EOW. From the above, it is clear that the three Noticees never desired to cooperate as they were entirely aware about their liability since the year 2015 itself. What is seen is the fact that the Committee has undertaken a meticulous exercise for determining the outstanding liability of the three Noticees on the basis of the documentary evidence produced by NSEL. The Committee has considered the submissions made in the statements of Facts with relevant dates and events dated 10.10.2015 submitted by the LOIL Group of entities which is referred to in paragraph Nos.20, 21 and 22 of the Report in which the LOIL Group have denied receipt of any amount on account of trading or otherwise from NSEL Bank Accounts. As mentioned in paragraph No.31 of the Report, NSEL has produced Bank Statements relating to NSEL’s settlement Accounts of LOIL Overseas Foods Limited, LOIL Health Foods Limited, and LOIL 52 of 69 Continental Foods Limited which show details, including cheques/reference number of amounts paid by LOIL Overseas Foods Limited, LOIL Health Foods Limited, and LOIL Continental Foods Limited to NSEL as also amounts paid by NSEL to LOIL Overseas Foods Limited, LOIL Health Foods Limited and LOIL Continental Foods Limited. Except for denying the existence and correctness of the Bank Statements and other documents produced by NSEL, the LOIL Group has not produced any documents or evidence to dispute any of the entries in the bank statements and other documents produced by NSEL. As regards the submission of LOIL Group that balance sheet of NSEL as on 31.03.2013 shows ‘Nil’ balance against LOIL, from the ledger accounts produced by NSEL, it is seen that all T+2/T+1 transactions for sale of commodities by LOIL Group and corresponding T+25/T+34 purchase transactions of the same commodity by LOIL Group have been settled by delivery and/or payments, except sale transactions entered into after 21.02.2013 in case of LOIL Overseas Foods Limited, after 7.02.2013 in case of LOIL Health Foods Limited, and after 07.02.2013 in case of LOIL Continental Foods Limited. The claim that LOIL Group has not traded on the NSEL platform after 31.03.2013 is disapproved by the ledger accounts produced by NSEL as also by the statements made in the statement of facts dated 10.10.2015 submitted by LOIL Group itself which is referred to in paragraph Nos.20, 21 and 22 of the Report. LOIL Group have not 53 of 69 Report 39 & 43.doc produced any documents to substantiate their claims to the effect that NSEL called upon them to issue backdated Invoices or that LOIL Group has to receive huge amounts from NSEL and its agents and/or stocks of equivalent value.

24. The Committee has next considered the copy of Plaint in Civil Suit No.7 of 2013 filed by LOIL Health Foods Limited being the Plaintiffs against Pace Agrofarms Limited namely Defendant No.1 and NSEL as Defendant No.2 in the Court of the Civil Judge Senior Division, Fatehgarh Sahib, Punjab annexed to its statement of facts dated 10.10.2015. Most interestingly the Committee has looked into the Suit Plaint and found that in paragraphs Nos.9, 10, 11 and 20 the Noticees have sought to explain the trading of commodities with NSEL which was carried out and that during the period between 17.07.2023 to 21.07.2023, the said Noticee therein had deposited in the settlement Account No.00990680026564 of NSEL a total sum of Rs.73,75,00,000.00 to meet its settlement obligations with respect to buy positions on the said platform and most importantly on the settlement date title to goods/merchandise, legally and jurally vested with the Plaintiff (Noticee). In the said Suit, the Noticee has sought a declaration to the effect that transactions dated 17.07.2013, 18.07.2013, 19.07.2013, 22.07.2013, 23.07.2013, 24.08.2013, 20.08.2013 and 26.08.2013 whereby it deposited an amount of Rs.80,75,00,000.00 in the aforesaid settlement account for purchase of 54 of 69 Report 39 & 43.doc commodities are valid, legal and complete for a declaratory decree to that effect. The Committee has noted that identical relief and case has been made out by the other two Noticees namely LOIL Overseas Foods Limited and LOIL Continental Foods Limited in separate Civil Suits which have been filed by them in Punjab. In view of the above, the stand adopted by the three Noticees namely the LOIL Group before the Committee of total denial of existence of correctness of the contents of the ledger accounts and documents produced by NSEL stands completely disproved. It is clearly seen that the entries in the ledger Account submitted by NSEL cannot be termed to self generated documents as those entries are based on the data supplied by or on behalf of the trading members and the stand adopted by the three Noticees in its individual suits clearly proves that they were indeed the trading members. The Committee has clearly opined and found that production by NSEL of the ledger Accounts of the three Noticees i.e. LOIL group maintained by them alongwith Certificate under Section 65 B of the Indian Evidence Act, 1872 to be sufficient evidence for determining the amount payable by the three Noticees particularly in the absence of the three Noticees clearly refusing to produced their Books of accounts or any other contemporaneous material available with relating to their dealings on the NSEL platform to refute the case of NSEL. Adequate opportunity is one thing but in the present case the opportunity was available to the three Noticees from 03.10.2015 55 of 69 Report 39 & 43.doc onwards despite which the three Noticees refused to disclose their ledger Accounts. Four years, six orders by the Committee and two orders by the High Court is not considered enough by the three Noticees before me. The three Noticees therefore cannot now maintain that they will produce documents before this Court when this Court has clearly laid down the terms of reference of the Committee to decide and file its Report. Today when the writing is clear on the wall, the three Noticees cannot state that they are now ready to produce the documents before this Court. The fact of the matter is that all that the three Noticees are interested in is to protract and prolong the inevitable, namely ascertainment and determination of their liability to NSEL and nothing more. I do not wish to adversely infer the liability against the three Noticees due to their non-cooperation and as such in terms of directions contained in the order dated 02.09.2014 wish to go through the Report submitted by the Committee minutely and see whether the outstanding amounts are liable to be paid on the basis of appropriate and cogent reasons returned on the basis of the documentary evidence produced by NSEL. I propose to undertake this exercise with respect to all three Noticees before me separately.

25. In the case of LOIL Overseas Foods Limited, it is seen that ledger account maintained by NSEL of transactions executed by this Noticee have been produced before the Committee on 27.03.2015. It is seen that these ledger Accounts have been supported with the 56 of 69 Certificate filed by NSEL before the Committee under Section 65-B of the Indian Evidence Act, 1872. The ledger account clearly shows that the amounts payable as on 18.07.2013 in the Books of Accounts maintained by NSEL as under:- Particulars Debit Credit Balance in Initial Margin Ledger Account 12,28,20,779.46 Balance in Member Daily Obligation Ledger Account 00.00 Balance in Member’s Delivery

00.00 25.1. Thereafter it is seen that between 19.07.2013 and 31.07.2013 amount agreegating to Rs.4,03,00,000.00 has been withdrawn from Initial Margin Ledger Account of this Noticee leaving a credit balance of Rs.8,25,20,779.46 as on 31.07.2013. The member Delivery Obligation Ledger Account produced by NSEL with respect to this Noticee contain entries relating to T+2 trades as also corresponding T+25 or T+10 trades and charges related to the trades and bank pay-in/pay-out in respect thereof. The member Daily Obligation Ledger Account produced by NSEL reflect member’s obligation not directly related to trades such as exchange transaction charges and any bank pay-in/bank pay-out towards the same. In this case the Member’s Delivery Obligation Ledger Account of LOIL Overseas Foods Limited maintained by NSEL when seen clearly shows 57 of 69 Report 39 & 43.doc the balance as on 18.07.2013 as ‘0.00’. Thus, all T+2 and T+25 trades for which due date was prior to 18.07.2013 have been settled without any dispute being raised by LOIL Overseas Foods Limited.

25.2. NSEL has thereafter produced the Member’s Daily Obligation Ledger Account particular of this Noticees for the period 19.07.2013 to 31.07.2013 showing balance payable as on 31.07.2013 of Rs.12,96,15,541.96. NSEL has also produced the Member’s Delivery Obligation Account of this Noticee for the period 01.08.2013 to 30.09.2013 which clearly shows the balance due and payable by this Noticee of Rs.85,19,46,141.07. The most clinching fact is that after 30.09.2013, out of aforesaid balance outstanding amount, NSEL has received from this particular Noticee amount of Rs.8,09,572.42 on 10.10.2013 leaving behind the balance outstanding amount of Rs.85,11,36,568.65. On a question being pointedly asked to Mr. Ghogare with respect to payment of the aforesaid amount made by the Noticee to NSEL, he would have no answer whatsoever to give to the Court. All that he would repeatedly submit is that the accounts produced by NSEL are false and fabricated and this Hon’ble Court should now frame issues and embark upon a trial to prove the liability of this Noticee. It is clearly seen that after considering the above documentary evidence produced by NSEL, including the evidence pertaining to the trade positions, VAT obligations, warehouse transfer charges, credit balance of initial margin account, debit balance in 58 of 69 Member’s daily obligation account and penalty, the Committee has opined that the amount of Rs.77,23,64,575.70 is due and payable by this Noticee namely LOIL Overseas Foods Limited to NSEL as on 31.08.2015. The labourious exercise undertaken by the Committee is exemplified in paragraph Nos.47.[1] to 47.14. It is an exercise which can be understood by a common man also. In the entire exercise, reliance is placed on the documentary evidence produced by NSEL which cannot be disregarded by the Committee. I am therefore inclined to uphold the finding arrived at by the Committee in paragraph No.47.14 that the amount of Rs.77,23,64,575.70 is due and payable by this Noticee namely LOIL Overseas Foods Limited to NSEL as on 31.08.2015. I therefore see no reason not to accept this Report in so far as this Noticee is concerned, and make it an order of the Court. It is clearly seen that the conduct of the Noticee right from day one is as obstructive as possible and even today before me after so many years the same conduct is maintained with the sole intention of protracting determination of its liability without cooperation. The Interim Application filed by this Noticee seeking framing of issue is nothing but another attempt on the part of this Noticee to delay the inevitable. A comprehensive exercise undertaken by the Committee guided by the order dated 02.09.2014 has determined the outstanding liability of the Noticee. The reasons which are enumerated step wise in paragraph Nos.47.[1] to 47.14 are not only cogent reasons but unassailable 59 of 69 Report 39 & 43.doc reasons. Noticee cannot be allowed to take advantage of its repeated default in this fashion. I have already noted that two specific orders of the High Court and six orders of the Committee have been blatantly disregarded and flouted by the Noticee. Committee has followed directions contained in the order dated 02.09.2014 meticulously and I find no reason to have a different opinion. Rather, there is absolutely no material before me to reconsider. The outstanding liability as enumerated in paragraph No.47.14 therefore stands accepted and there will be an order in its terms in favour of NSEL and against LOIL Overseas Foods Limited. Liberty is granted to NSEL to recover costs of the Report from the Noticee at any stage in the proceedings. It is further directed that the amount payable by this Noticee and as determined by the Committee in paragraph No.47.14 will carry interest from 31.08.2015 till payment on realisation at the rate of 12% p.a. since in my opinion this rate of interest is a commercially reasonable rate.

26. In the case of LOIL Health Foods Limited, it is seen that ledger account maintained by NSEL of transactions executed by this Noticee have been produced before the Committee on 27.03.2015. It is seen that these ledger Accounts have been supported with the Certificate filed by NSEL before the Committee under Section 65-B of the Indian Evidence Act, 1872. The ledger account clearly shows that the amounts payable as on 24.07.2013 in the Books of Accounts 60 of 69 Report 39 & 43.doc maintained by NSEL as under:- Balance in Initial Margin 31,56,46,859.96

00.00 Balance in Delivery Obligation 00.00

26.1. Thereafter it is seen that between 29.07.2013 and 31.07.2013 amount agreegating to Rs.7,00,00,000.00 has been withdrawn from the Initial Margin Ledger Account of this Noticee leaving a credit balance of Rs.24,56,46,859.96 as on 31.07.2013. The Member Delivery Obligation Ledger Account produced by NSEL with respect to this Noticee contain entries relating to T+1 trades as also corresponding T+34 or T+10 trades and charges related to the trades and bank pay-in/pay-out in respect thereof. The Member Daily Obligation Ledger Account produced by NSEL reflect member’s obligation not directly related to trades such as exchange transaction charges and any bank pay-in/bank pay-out towards the same. In this case, the Member’s Delivery Obligation Ledger Account of LOIL Health Foods Limited maintained by NSEL when seen clearly shows the balance as on 24.07.2013 as ‘0.00’. Thus, all T+1 and T+34 trades for which due date was prior to 24.07.2013 have been settled without any dispute being raised by LOIL Health Foods Limited. 61 of 69

26.2. NSEL has thereafter produced the Member’s Daily Obligation Ledger Account particular of this Noticees for the period 25.07.2013 to 31.07.2013 showing balance payable as on 31.07.2013 of Rs.47,21,46,335.97. NSEL has also produced the Member’s Delivery Obligation Account of this Noticee for the period 01.08.2013 to 30.09.2013 which clearly shows the balance due and payable by this Noticee of Rs.287,48,22,050.29. The most clinching fact is that after 30.09.2013, out of aforesaid balance outstanding amount, NSEL has received from this particular Noticee, amount of Rs.21,61,35,136.79 on 30.09.2013 leaving behind the balance outstanding amount of Rs.265,86,86,913.50. On a question being pointedly asked to Mr. Ghogare with respect to payment of the aforesaid amount made by the Noticee to NSEL, he would once again have no answer whatsoever to give to the Court. All that he would repeatedly submit is that the accounts produced by NSEL are false and fabricated and this Hon’ble Court should now frame issues and embark upon a trial to prove the liability of this Noticee. It is clearly seen that after considering the above documentary evidence produced by NSEL, including the evidence pertaining to the trade positions, VAT obligations, warehouse transfer charges, credit balance of initial margin account, debit balance in Member’s daily obligation account and penalty, the Committee has opined that the amount of Rs.265,86,86,913.50 is due and payable by this Noticee namely LOIL Health Foods Limited to NSEL as on 62 of 69 30.09.2013. The labourious exercise undertaken by the Committee is exemplified in paragraph Nos.48.[1] to 48.14. It is an exercise which can be understood by a common man also. In the entire exercise, reliance is placed on the documentary evidence produced by NSEL which cannot be disregarded by the Committee. I am therefore inclined to uphold the finding arrived at by the Committee in paragraph No.48.13 that the amount of Rs.265,86,86,913.50 is due and payable by this Noticee namely LOIL Health Foods Limited to NSEL as on 30.09.2013. I therefore see no reason not to accept this Report in so far as this Noticee is concerned, and make it an order of the Court. It is clearly seen that the conduct of the Noticee right from day one is as obstructive as possible and even today before me after so many years the same conduct is maintained with the sole intention of protracting determination of its liability without cooperation. The Interim Application filed by this Noticee seeking framing of issue is nothing but another attempt on the part of this Noticee to delay the inevitable. A comprehensive exercise undertaken by the Committee guided by the order dated 02.09.2014 has determined the outstanding liability of the Noticee. The reasons which are enumerated step wise in paragraph Nos.48.[1] to 48.14 are not only cogent reasons but unassailable reasons. Noticee cannot be allowed to take advantage of its repeated default in this fashion. I have already noted that two specific orders of the High Court and six orders of the Committee have 63 of 69 Report 39 & 43.doc been blatantly disregarded and flouted by the Noticee. Committee has followed directions contained in the order dated 02.09.2014 meticulously and I find no reason to have a different opinion. Rather, there is absolutely no material before me to reconsider. The outstanding liability as enumerated in paragraph No.48.13 therefore stands accepted and there will be an order in its terms in favour of NSEL and against LOIL Health Foods Limited. Liberty is granted to NSEL to recover costs of the Report from the Noticee at any stage in the proceedings. It is further directed that the amount payable by this Noticee and as determined by the Committee in paragraph No.48.13 will carry interest from 30.09.2013 till payment on realisation at the rate of 12% p.a. since in my opinion this rate of interest is a commercially reasonable rate.

27. In the case of LOIL Continental Foods Limited, it is seen that ledger account maintained by NSEL of transactions executed by this Noticee have been produced before the Committee on 27.03.2015. It is seen that these ledger Accounts have been supported with the Certificate filed by NSEL before the Committee under Section 65-B of the Indian Evidence Act, 1872. The ledger account clearly shows that the amounts payable as on 30.07.2013 in the Books of Accounts maintained by NSEL as under:- Balance in Initial Margin 34,90,75,690.58 64 of 69 00.00 Balance in Delivery Obligation

00.00 27.1. It is seen that on 31.07.2013 amount of Rs.1,00,00,000.00 has been withdrawn from Initial Margin Ledger Account of this Noticee leaving a credit balance of Rs.34,90,75,690.58 as on 31.07.2013. The Member Delivery Obligation Ledger Account produced by NSEL with respect to this Noticee contain entries relating to T+2 trades as also corresponding T+25 or T+10 trades and charges related to the trades and bank pay-in/pay-out in respect thereof. The member Daily Obligation Ledger Account produced by NSEL reflect member’s obligation not directly related to trades such as exchange transaction charges and any bank pay-in/bank pay-out towards the same. In this case the Member’s Delivery Obligation Ledger Account of LOIL Continental Foods Limited maintained by NSEL when seen clearly shows the balance as on 18.07.2013 as ‘0.00’. Thus, all T+2 and T+25 trades for which due date was prior to 18.07.2013 have been settled without any dispute being raised by LOIL Continental Foods Limited.

27.2. NSEL has thereafter produced the Member’s Daily Obligation Ledger Account particular of this Noticees showing balance 65 of 69 Report 39 & 43.doc payable as on 31.07.2023 of Rs.94,61,980.63. NSEL has also produced the Member’s Delivery Obligation Account of this Noticee for the period 01.08.2013 to 30.09.2013 which clearly shows the balance due and payable by this Noticee of Rs.347,71,18,539.02. The most clinching fact is that after 30.09.2013, out of aforesaid balance outstanding amount, NSEL has received from this particular Noticee amount of Rs.32,69,59,842.72 on 30.09.2013 leaving behind the balance outstanding amount of Rs.315,01,58,696.30. On a question being pointedly asked to Mr. Ghogare with respect to payment of the aforesaid amount made by the Noticee to NSEL, he would once again have no answer whatsoever to give to the Court. All that he would repeatedly submit is that the accounts produced by NSEL are false and fabricated and this Hon’ble Court should now frame issues and embark upon a trial to prove the liability of this Noticee. It is clearly seen that after considering the above documentary evidence produced by NSEL, including the evidence pertaining to the trade positions, VAT obligations, warehouse transfer charges, credit balance of initial margin account, debit balance in Member’s daily obligation account and penalty, the Committee has opined that the amount of Rs.315,01,58,696.30 is due and payable by this Noticee namely LOIL Continental Foods Limited to NSEL as on 26.11.2014. The labourious exercise undertaken by the Committee is exemplified in paragraph Nos.49.[1] to 49.13. It is an exercise which can be understood by a 66 of 69 Report 39 & 43.doc common man also. In the entire exercise, reliance is placed on the documentary evidence produced by NSEL which cannot be disregarded by the Committee. I am therefore inclined to uphold the finding arrived at by the Committee in paragraph No.49.12 that the amount of Rs.315,01,58,696.30 is due and payable by this Noticee namely LOIL Continental Foods Limited to NSEL as on 26.11.2014. I therefore see no reason not to accept this Report in so far as this Noticee is concerned, and make it an order of the Court. It is clearly seen that the conduct of the Noticee right from day one is as obstructive as possible and even today before me after so many years the same conduct is maintained with the sole intention of protracting determination of its liability without cooperation. The Interim Application filed by this Noticee seeking framing of issue is nothing but another attempt on the part of this Noticee to delay the inevitable. A comprehensive exercise undertaken by the Committee guided by the order dated 02.09.2014 has determined the outstanding liability of the Noticee. The reasons which are enumerated step wise in paragraph Nos.49.[1] to 49.13 are not only cogent reasons but unassailable reasons. Noticee cannot be allowed to take advantage of its repeated default in this fashion. I have already noted that two specific orders of the High Court and six orders of the Committee have been blatantly disregarded and flouted by the Noticee. Committee has followed directions contained in the order dated 02.09.2014 meticulously and I 67 of 69 Report 39 & 43.doc find no reason to have a different opinion. Rather, there is absolutely no material before me to reconsider. The outstanding liability as enumerated in paragraph No.49.13 therefore stands accepted and there will be an order in its terms in favour of NSEL and against LOIL Overseas Foods Limited. Liberty is granted to NSEL to recover costs of the Report from the Noticee at any stage in the proceedings. It is further directed that the amount payable by this Noticee and as determined by the Committee in paragraph No.49.12 will carry interest from 30.09.2013 till payment on realisation at the rate of 12% p.a. since in my opinion this rate of interest is a commercially reasonable rate.

28. In view of the above observations and findings, it is therefore directed that Report No.39 stands accepted in the above terms.

29. In so far as Report No.43 is concerned I am inclined to accept the recommendation made by the Committee that no amount has been paid by LOIL Continental Foods Limited to NSEL after 01.09.2013 and therefore no credit is required to be given to the said Noticee for the amount of Rs.[5] Crores. This is in view of the fact that the aforesaid mount of Rs.[5] Crores was received on 06.08.2013 and not between 01.09.2013 to 26.11.2014 as stated by NSEL. In that view of the matter, the said amount of Rs.[5] Crores will have to be added to the liability of Rs.3,15,01,58,696.30 ascertained and determined by the 68 of 69 Committee in Report No.39 and thus the total amount due and payable by LOIL Continental Foods Limited would be Rs.3,20,01,58,696.30 as on 26.11.2014. alongwith interest at the rate of 12% p.a. as determined while accepting Report No.39. Report No.43 therefore also stands accepted while determining the correct liability of LOIL Continental Foods Limited. of this order.

31. In view of the above, Reports having been accepted by this Court and the reasons stated in the above judgment, the Interim Applications, if any, filed by the Noticee/Applicants do not survive and hence they stand dismissed.

32. Accordingly, Interim Application (L) No.26300 of 2022, Interim Application (L) No.26401 of 2022 and Interim Application (L) No.26563 of 2022 are dismissed.

33. In view of the above observations and findings, Report No.39 and Report No.43 stand allowed, accepted and accordingly disposed. [ MILIND N. JADHAV, J. ] Ajay