Tribunal reduces FIU’s Rs 1.66-cr penalty on NSEL

The appellate tribunal under the Prevention of Money Laundering Act (PMLA) has reduced the penalty levied by the Financial Intelligence Unit- India (FIU-IND) on the National Spot Exchange (NSEL). However, it said no further interference on the earlier order was required. The exchange has said it would go for an appeal.

“The query you have raised is pertaining to a matter that is legal in nature and hence we would not like to make any statement other than that NSEL is contemplating to file an appeal against the said order as NSEL is not reporting entity as envisaged in PMLA, hence PMLA sections are not applicable to NSEL,” an NSEL spokesperson said.

FIU had earlier levied a total penalty of Rs 1.66 crore on NSEL for various alleged violations under PMLA. Each of the violation was charged with the maximum penalty of Rs 1 lakh, adding up to the sum. NSEL had moved the PMLA appellate tribunal against this order.


In an order on June 27, the tribunal chaired by Justice Manmohan Singh cited the absence of a reasoned order for each such violation and cut the penalty to Rs 15,000 for each offence.

“There is force in the argument of the appellant. If major penalty as provided under the statute is to be imposed, a valid explanation are to be given in the impugned order as to why the major penalty of one lac for each failure is imposed but such explanation/reasons are missing in the present case although the conduct of the appellant was discussed in different context (Sic),” the tribunal said.

“We are of the view that if discretion is exercised to impose the maximum penalty of one lac for account of each failure, a reasoned order was to be passed. Therefore, in the absence of reasoned order and discussion herein above, we reduce the penalty from one lac for each failure to Rs. 15,000/- for each failure (Sic),” the tribunal added.

On the merits NSEL’s argument, the tribunal felt “the appellant has failed to make any case”. It said, “We are of the considered view that the appellant were obligated as a reporting entity within the meaning of Section 12 of PMLA, 2002. All the arguments of the appellant in this respect are rejected.”

As far as the appeal on merit is concerned, no ground is made out for interference of the impugned order, it concluded. “The present appeal is, accordingly, disposed of by modifying the part of the order in relation to imposing the maximum penalty,” the tribunal said.

Tribunal reduces FIU’s Rs 1.66-cr penalty on NSEL

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