The PNB-led consortium of banks which has a loan exposure to the companies of fugitive diamond jeweller, Nirav Modi, is likely to move court seeking release of assets worth Rs 1,000 crore attached by the Enforcement Directorate (ED) in the Rs 13,600-crore bank fraud allegedly perpetrated by Modi and his uncle Mehul Choksi.
The consortium is set to move the court under Section 8 (8) of the Prevention of Money Laundering Act (PMLA) to stake its claim on the mortgaged assets attached by the ED, said sources. The new norms allow the special court to consider the claims for the purposes of restoration of properties during the trial. Earlier, the assets could be restored only after completion of the trial.
The move by the consortium follows the June 8 order of a special court that allowed the ED to confiscate assets worth Rs 1,396 crore of Nirav Modi. It had ordered the consortium to approach the PMLA court to claim the mortgaged and secured properties of Modi, attached by ED.
On July 8, the Directorate confiscated properties worth Rs 329.66 crore of Modi under the Fugitive Economic Offenders Act, 2018 (FEOA). The agency confiscated properties including four flats at the iconic building Samudra Mahal in Worli, Mumbai; a seaside farm house and land in Alibaug; a windmill in Jaisalmer, Rajasthan; a flat in London; residential flats in the UAE and shares and bank deposits. So far, the ED has attached properties worth Rs 2,348 crore belonging to Modi under the PMLA.
This is not the first time when banks have moved the anti-money laundering court for restoration of properties that are already mortgaged with lenders in a case. Earlier, a State Bank of India-led consortium filed for restoration of mortgaged assets of another fugitive economic offender, Vijay Mallya, former chairman of the now-defunct Kingfisher Airlines Ltd.
However, the case is still pending in the court. Since 2019, when the government amended the money laundering laws to allow restoration of properties during the trial, not a single order of restoration has been passed by the courts till date.
Nirav Modi is accused of routing transactions of about Rs 13,600 crore through fraudulent letters of undertaking of Punjab National Bank (PNB). He left India in the first week of January 2018, before the PNB scam came out in public. Modi has been arrested in the United Kingdom and is currently facing extradition proceedings. The UK court is scheduled to hear the case in September.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines