M/S 63 MOONS TECHNOLOGIES LIMITED v. UNION OF INDIA AND ORS.
Independence of Criminal Prosecution from Civil Settlements - NCLT Approved Schemes Cannot Mandate Quashing of Criminal Proceedings for Serious Economic Offences.
Court: Bombay High Court
Citation: 2026:BHC-AS:14523-DB
Decision Date: 09-03-2026
List of Laws
Prevention of Money Laundering Act, 2002 (PMLA); Companies Act, 2013 (pertaining to NCLT Schemes of Arrangement); Criminal Procedure; Insolvency and Bankruptcy Code (Jurisdictional overlap)
- Facts: The case involves a long-standing dispute following a financial crisis at the National Spot Exchange Limited (NSEL). The Appellant, 63 Moons Technologies Limited, challenged an order by the PMLA Appellate Tribunal which directed them to furnish an indemnity bond of approximately Rs. 1095 Crores and an undertaking to release attached movable properties. Simultaneously, the Enforcement Directorate (ED) challenged the same order, objecting to the lifting of the attachment. During the pendency of these appeals, the National Company Law Tribunal (NCLT) approved a "Scheme of Arrangement" for settling dues with investors and appointed a Monitoring Authority. However, the scheme contained a clause (24.6) suggesting that upon settlement, parties would jointly apply for the quashing or dismissal of criminal proceedings against the accused.
- Procedural Posture: These are consolidated matters comprising Criminal Appeals, Interim Applications, and a Writ Petition filed in the Bombay High Court. The primary appeal was directed against the September 2019 order of the Appellate Tribunal for SAFEMA, FEMA, PMLA, etc.
- Issue: Can a settlement scheme approved by a Civil Court (NCLT) for the distribution of funds to victims be used to dilute, quash, or terminate independent criminal prosecutions for serious financial offences?
- Holding: No. The Court held that criminal proceedings must proceed independently to their logical conclusion and cannot be compromised by civil settlement schemes.
- Reasoning: The Court reasoned that while the NCLT-approved scheme for investor compensation is valid for civil recovery, a Civil Court cannot determine or dilute the consequences of criminal prosecution. The High Court specifically disagreed with the clause in the scheme that allowed for the quashing of criminal cases through the settlement mechanism, viewing it as an indirect attempt by the accused to secure exoneration. The Court emphasized that the "plight of thousands of investors" who were victims of crime necessitates that the criminal trial proceed "expeditiously" and "independently" of the lifting of asset attachments or the disbursement of settlement amounts.
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