The Government issued a Draft Order under Section 396 of the Companies Act, 1956, for amalgamation of National Spot Exchange Ltd. (NSEL) with Financial Technologies (India) Ltd. (FTIL) on 21-10-2014. In the meanwhile, FTIL filed a Writ Petition before the Hon’ble High Court of Bombay Judicature, against the Union of India/Ministry of Corporate Affairs, challenging the constitutional validity of the provisions of Section 396 of the Companies Act, 1956 and praying for quashing of the said Draft Order. The matter is subjudice at present.

 This information was given by Shri Arun Jaitley, Minister of Corporate Affairs in written reply to a question in the Lok Sabha.

Challenge to amalgamation power seeks quashing of draft order as unconstitutional, with matter presently subjudice. Draft amalgamation of National Spot Exchange Ltd. with Financial Technologies (India) Ltd. was initiated under Section 396 of the Companies Act, 1956. FTIL filed a writ petition challenging the constitutional validity of Section 396 and seeking quashing of the Draft Order; the challenge invokes judicial review and is currently subjudice. The existence of the Draft Order and pendency of the petition were disclosed by the Minister of Corporate Affairs in Parliament.