NCLAT Dismisses MMTC Appeal Against NSEL's Settlement Scheme With Traders

The National Company Law Appellate Tribunal (NCLAT) at Delhi on Monday rejected a challenge by state-run trading company MMTC Limited to a settlement scheme approved for National Spot Exchange Ltd., holding that the scheme cannot be reopened once it has been upheld in earlier proceedings and affirmed by the Supreme Court.

The Mumbai bench of the National Company Law Tribunal had, on November 28, 2025 approved the settlement scheme between NSEL, along with its promoter 63 Moons, and its creditors, providing for a capped payout of Rs 31,950 crore.

A bench of Judicial Member Yogesh Khanna and Technical Member Ajai Das Mehrotra said that even if certain findings in the original order were incorrect, they would not amount to fraud so as to justify recalling the scheme.

“Further qua fraud we need to say the Ld. ASG had only pointed out to the above paras of the impugned order to show the fraud is committed upon the Ld. NCLT but to our considered view, at best it can be treated as an incorrect finding but not fraud. Even qua incorrect finding we need to note neither the ED nor EOW or MPID came up in appeal before this Court and none of these authorities even challenged the scheme before the Ld. NCLT.”, the tribunal observed. 

The tribunal also made it clear that once the Supreme Court has examined the matter and dismissed the appeal on merits, the earlier order of the appellate tribunal merges with the Supreme Court's ruling.

The case arose from MMTC Limited's challenge to a scheme of arrangement approved by the Mumbai bench of the National Company Law Tribunal in November 2025. The scheme sought to settle claims arising out of the 2013 payment default at NSEL through a capped payout of Rs 31,950 crore.

MMTC had voted against the proposal but did not file any objections before the NCLT when the scheme was under consideration. The scheme was approved by more than 90 percent of the creditors and was subsequently upheld by the appellate tribunal in January 2026 and by the Supreme Court in March 2026.

Appearing for MMTC, the Additional Solicitor General argued that the NCLT order wrongly recorded the position of investigative agencies such as the Enforcement Directorate, the Economic Offences Wing, and the authority under the MPID law.

According to it, this misrecording showed that the order was obtained by fraud. It was also argued that even a scheme affirmed up to the Supreme Court can be recalled if it is shown to be vitiated by fraud.

The tribunal rejected this line of argument. It noted that none of the agencies cited by MMTC had themselves challenged the scheme either before the NCLT or in appeal and that no objections had been filed by MMTC during the NCLT proceedings.

In these circumstances, the alleged error in recording the agencies' position could not be elevated to fraud. The tribunal reiterated that once the Supreme Court has dismissed the appeal on merits, “Now if the Civil Appeal is dismissed on merits, the order dated 15.01.2026 passed by this Tribunal merges with the order dated 09.03.2026 of the Hon'ble Supreme Court and hence on merit it cannot be assailed before us.”

The appeal was accordingly dismissed.