Ahmedabad, June 14 The Gujarat High Court today issued notice to the Reserve Bank of India on a PIL seeking legal action against the National Spot Exchange Limited (NSEL) for operating a payment system without authorisation.
The NSEL Aggrieved and Recovery Association, a body of investors which has filed the petition, says lack of regulatory action led the NSEL committing a fraud to the tune of Rs 5,600 crore through its trading terminal in which around 13,000 investors lost money.
The division bench of Chief Justice R Subhash Reddy and Justice V M Pancholi today issued notice to RBI, seeking a reply by July 5. The PIL wants RBI to initiate legal proceedings against NSEL.
Investors suffered due to "failure on the part of the RBI to initiate timely legal proceedings against NSEL and its officers for operating a payment system without authorisation from the RBI", it said.
NSEL provided electronic platform for spot trading in various commodities at a national level beginning October 2008, but stopped trading in August 2013, stating that it would meet all obligations towards brokers and clients. But it failed to keep the promise, it said.