Court allows PNB to sell Nirav Modi’s properties worth 440 crore

Updated on Aug 20, 2021 12:04 AM IST

Special Prevention of Money Laundering Act (PMLA) court has ordered to release part of the properties belonging to the fugitive Diamond trader worth ₹440 crore, which were mortgaged by Modi’s firms with the nationalised bank

Fugitive diamond trader Nirav Modi. (FILE)
Fugitive diamond trader Nirav Modi. (FILE)
By, Mumbai

Punjab National Bank (PNB), which faced the brunt because of the alleged fraud committed by Nirav Modi, will be able to recover at least part of its dues, as the special Prevention of Money Laundering Act (PMLA) court has ordered to release part of the properties belonging to the fugitive Diamond trader worth 440 crore, which were mortgaged by Modi’s firms with the nationalised bank.

The special PMLA court last week allowed two applications filed by PNB seeking to release properties mortgaged by the bank against the credit facilities extended to Modi’s two firms —Firestar Diamond International Private Ltd (FDIPL) and Firestar International Ltd (FIL).

As per the detailed order released on Thursday, the bank had sought release of properties of FIL worth 108.3 crore and properties of FDIPL worth 331.6 crore. While releasing these properties, the court said, “The claimant’s (bank’s) quantifiable loss has been recognised by Debts Recovery Tribunals (DRT) who has passed judgments in their favour.”

As per the orders released on Thursday, the total outstanding debt payable by FIL to PNB consortium is in excess of 1,264.62 with costs and interest at 16.45% per annum from July 24, 2018. The total outstanding debt payable by FDIPL to United Bank of India (UBI) consortium is in excess of 232.15 with costs and interest from July 27, 2018.

During the probe, the Enforcement Directorate (ED) had attached several properties owned by Modi though his family members and also through these companies. The court noted that several of these properties have been ordered to confiscate after Modi was declared a fugitive economic offender.

During the proceedings for confiscation of Modi’s assets, several properties were exempted from confiscation after the interested parties had raised objections. The banks and its consortium, too, had objected to confiscation of properties mortgaged with them against which Modi and his firms availed several credit facilities in the form of Letter of Understandings (LOUs).

The bank hence approached the court earlier this year for release of these mortgaged properties, a majority of which are shares and debentures that were not exempted from confiscation but were attached by ED.

ED, which was party to the hearing, had contended that it would take an undertaking from the applicants to return the said amount with interest in case the court at any point in time deems it fit.

“No prejudice shall be caused in restoring the assets to the applicant, as upon confiscation of these assets on conclusion of the trial, the same are anyway liable to be restored to the applicants,” ED had contended.

After considering all the aspects, the court has allowed the pleas of PNB and has directed the bank to give undertaking saying it would return the properties or its equivalent value when directed by the court. Further, ED is directed to make a list of the properties which would be released to the bank.

SHARE THIS ARTICLE ON
  • ABOUT THE AUTHOR

    Charul Shah is senior reporter covering the legal beat for Hindustan Times. She has spent over a decade in the industry covering criminal investigations and judiciary from Mumbai, Ahmedabad and Bengaluru.

SHARE
Story Saved
×
Saved Articles
Following
My Reads
My Offers
Sign out
New Delhi 0C
Thursday, December 01, 2022
Start 15 Days Free Trial Subscribe Now
Register Free and get Exciting Deals