M.S. SONAK, J.

ABOUT THE PETITIONS AND THE PARTIES:

1. The main challenge in all these petitions is to the final amalgamation order dated 12th February 2016 (impugned order) made by the Central Government under Section 396 of the Companies Act, 1956 (Companies Act), amalgamating the National Spot Exchange Limited (NSEL) and 63 Moons Technologies Limited, formerly known as Financial Technologies (India) Limited (FTIL).

2. The lead petition in this batch is Writ Petition No. 2743 of 2014 instituted by FTIL and its 3 shareholders. Jignesh Shah, who, directly or indirectly has stake of almost 46% in FTIL and who is also the Vice Chairman of NSEL and some other promoters/ shareholders of FTIL have instituted Writ Petition Nos. 387 of 2015 and 2985 of 2014. The shareholders' association of FTIL (SHAFT) purporting to represent the retail shareholders of FTIL has instituted Writ Petition No. 1922 of 2016. The Standard Chartered Bank, an unsecured creditor to FTIL has instituted Writ Petition No. 1785 of 2016. The Syndicate Bank, the Union Bank of India and the DBS Bank Ltd., unsecured creditors to FTIL had instituted Writ Petition Nos. 793 of 2017, 790 of 2017 and 35 of 2017. However, these petitions, have since been withdrawn unconditionally on 24th July 2017. NSEL and some employees of FTIL, as respondents/intervenors have supported the petitioners' challenge to the impugned order.

3. The Central Government, the Securities and Exchange Board of India (SEBI) formerly Forward Markets Commission (FMC) and some associations representing the interest of investors, who claim to have lost an amount of Rs.5600 crores by trading on the platform provided by NSEL, have defended the impugned order.

BRIEF INTRODUCTION TO SUBJECT MATTER

4. FTIL is a Public Limited and listed company which holds 99.9998% shareholding in NSEL. Based upon certain representations held out, NSEL, vide notification dated 5th June 2007, secured conditional exemption from the applicability of the Forward Contracts (Regulation) Act, 1952 (FCRA). The exemption was in respect of contracts of one day's duration for sale and purchase of commodities traded on the spot exchange established by NSEL. The conditions, inter alia, placed an absolute bar on short sales and stipulated that all outstanding positions at the end of the day, must result in delivery of commodities.

5. In 2009 or thereabouts, NSEL offered contracts with long term settlement periods including T+18, T+25 and T+36, where, “T” represents the trade day and the numbers 18, 25 and 36 represent the period within which the deliveries of commodities will be completed and the transactions squared off. Further, in 2009 itself, NSEL offered paired contracts, comprising short term buy contract and a long term sell contract, i.e., T+2 and T+25. In some instances assured interest returns were offered. By the year 2013, 99% of the turnover of the spot exchange comprised paired contracts, almost unconnected with genuine spot transactions in commodities. All this was, at least prima facie, in breach of the conditions subject to which NSEL had been granted exemption from the applicability of FCRA.

6. In 2012, the Regulatory Authorities, including FMC issued notices to NSEL to explain its position. Since the explanation was not found to be satisfactory, NSEL on 12th July 2013, was directed to furnish undertakings that no further/fresh contracts would be launched by exchange until further instructions and all existing contracts would be settled on the due dates. NSEL did furnish undertakings on 22nd July 2013, though not in the precise terms in which they were sought. On 31st July 2013, however, NSEL, notified its members that trading in all contracts (except E-series) stood suspended until further notice. As a result, all the trading/activities at the NSEL exchange, came to a grinding halt on 31st July 2013.

7. As on the