The Debts Recovery Tribunal (DRT) on Saturday passed an order directing diamond merchant Nirav Deepak Modi, Nirav Modi Firms and Nirav Modi companies to repay debts to the tune of Rs 7,300 crores to the Punjab National Bank (PNB).
The order was passed by Deepak Thakkar, the Presiding Officer, DRT in Pune, who also hold the additional charge of DRT-I, Mumbai and DRT, Aurangabad. The order was passed in connection with two out of the three cases filed by PNB at DRT-I, Mumbai against Nirav Modi, Nirav Modi Firms and Nirav Modi companies. One more case filed by PNB against Modi and his firms in connection with debt of about Rs 1700 crore is pending before the DRT-I, Mumbai.
Modi is currently lodged at Wandsworth prison in south-west London in United Kingdon since his arrest on March 19 this year by the Scotland Yard police in connection with the nearly USD 2 billion PNB fraud and money laundering case. His extradition proceedings are going in the UK Westminister Court.
Nirav Modi along with his uncle Mehul Choksi is alleged to have siphoned off Rs 13,500 crore from the coffers of PNB through fraudulent issuance of letters of undertaking and letters of credit.
In January 2018, the PNB had detected massive fraudulent activities allegedly perpetrated by Nirav Modi, Nirav Modi Firms and Companies. Complaints have been filed by PNB at the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) in this regard. Ministry of Corporate Affairs has directed investigation by “Serious Fraud Investigation Office” into the affair of the “Nirav Modi Group”.
Investigations by CBI and ED have found that Modi diverted a large part of these funds to family members and for personal purposes. ED has already attached properties worth over Rs 1873 crore belonging to Modi while assets worth Rs 489.75 crore have been seized. The attachments include assets worth Rs 961.49 crore located in Hong Kong, Switzerland, UK, USA, Singapore and UAE.
In the two cases before DRT, lawyers Aditya Malhotra, Adrish Majumdar of “Shardul Amarchand Mangaldas – Advocates” represented PNB, while no lawyer appeared in defence of Nirav Modi and his firms and companies during the hearings in Mumbai and Pune.
PNB versus Stellar Diamonds and 15 others
The case of PNB versus Stellar Diamonds and 15 others including Nirav Modi and his family members their partnership firms was registered on September 9, 2018 and came up for hearing before DRT’s presiding Deepak Thakkar in Pune on July 16, 2019.
In this case filed under sections of the Recovery of Debts due to Bank and Financial Institutions Act, 993, PNB had sought an order for recovery of debt to the amount of about Rs 7029.06 crores, allegedly obtained by fraudulent means.
Passing an order in this case, Thakkar stated that firm “M/s Stellar Diamonds”, its partners, trustees and beneficiaries including Nirav Deepak Modi, Ami Nirav Modi, Neeshal Deepak Modi, Deepak Keshavlal Modi, Nehal Deepak Modi, Rohin Nirav Modi, Ananya Nirav Modi, Apasha Nirav Modi, all residents of Grosvenor House, Peddar Road, Mumbai and Purvi Mayank Mehta of Atlas Apartment, Mehta Road, Mumbai, are directed to pay PNB either jointly and severally the aggregate sum of Rs 2309,04,08,900.40 with interest 14.30 percent per annum from June 30, 2018 till payment.
The order also stated that firm “M/s Solar Exports”, its partners, trustees and beneficiaries including Nirav Deepak Modi, Ami Nirav Modi, Neeshal Deepak Modi, Deepak Keshavlal Modi, Nehal Deepak Modi, Rohin Nirav Modi, Ananya Nirav Modi, Apasha Nirav Modi, all residents of Grosvenor House, Peddar Road, Mumbai and Purvi Mayank Mehta of Atlast Apartment, Mehta Road, Mumbai, are directed to pay PNB either jointly and severally the aggregate sum of Rs 2328,77,10,253.79 with interest 14.30 percent per annum from June 30, 2018 till payment.
The order also stated that firm “M/s Diamond R US”, its partners, trustees and beneficiaries including Nirav Deepak Modi, ANM Enterprises Private Limited Company, NDM Enterprises Private Limited Company in Mumbai, are directed to pay PNB either jointly and severally the aggregate sum of Rs 2391,15,68,796.46 with interest 14.30 per cent per annum from June 30, 2018 till payment. Mehul Choksey had retired from the partnership of this firm on May 10, 2000.
The order further stated, M/s Stellar Diamonds, M/s Solar Exports, M/s Diamond R US, all Mumbai based companies, their partners and beneficiaries, Firestar International Limited and Firestar Diamond International Private Limited (both companies belonging to Nirav Modi group), are directed to pay PNB either jointly and severally the aggregate sum of Rs 7029,06,87,950.65 with interest 14.30 percent per annum from June 30, 2018 till payment.
Two PNB officials nailed
The order also nailed PNB officials for their alleged involvement in the fraud. “The present lawsuit narrates the modus operandi of Nirav Modi and others made fraudulent and unauthorised transactions with the applicant (PNB)….. and connivance with the applicant’s employees Gokul Nath Shetty, Deputy Manager and Manoj Hanumant Kharat, Single Window Operator. Nirav Modi enjoyed the credit facilities by unlawful means, conspiracy and deceit,” it is stated.
“Nirav Modi managed the delinquent employees and obtained (from PNB) 150 letters of undertaking (LOUs) in favour of Nirav Modi Firms without any sanction or approval of requisite authority. The fraud was systematically perpetrated in breach and open defiance of the SWIFT system and Core Banking System…….The NOSTRO account of the applicant (PNB) was misused and misutilised to settle the buyer’s credit by making payment of the previously issued aunthorised LOUs…No entry was made in the Trade finance Module of the Core Banking System and therefore the fraud went undetected. The fraudulent transaction was circulated between Nirav Modi Firms and Nirav Modi Companies,” as stated in the order.
In the order, the presiding officer also stated details from a press release on G20 Summit in Osaka, Japan held on June 28 and 29, 2019 wherein the Indian government had strongly urged the global community to fight the menace of fugitive economic offenders running away. “The issue addressed at G20 summit by the Indian government was pointing of finger at Nirav Modi and his uncle Mehul Choksi,” the order stated.
PNB versus Firestar Diamond International Private Limited and others
The second case of PNB versus Firestar Diamond International Private Limited and others was registered on November 19, 2019. It came up for hearing before presiding officer Thakkar at DRT, Pune on April 24, 2019. Oriental Bank of Commerce, Gurgaon, Bank of India, Bandra (East), Bank of Baroda, Alkapuri, Baroda, Bank of Maharashtra, Lokmangal, Shivajinagar, Pune, UCO Bank, Kolkatta, Corporation Bank, Pandeshwar, Mangalore, United Bank of India, Kolkatta, are also among the applicants along with PNB in this case.
Passing an order in this case today, Thakkar stated that Firestar Diamond International Private Limited, Nirav Modi, Firestar International Limited and Radashir Jewellery Company Private Limited are directed to applicants (PNB and other banks) either jointly or severally a sum of Rs 232.15 crores with pendent lite and future interest 16.20 percent per annum from July 27,2018 till payment. Modi and his firms had obtained loans from PNB and other banks by mortgaging properties. As per the order, Firestar Diamond International Private Limited is “granted liberty to redeem the mortgage properties within the period of three months from the date hereof, failing which the applicants shall become entitled to put the mortgaged properties for sale…”