PNB fraud: ED opposes Robin Modi’s petition challenging confiscation of property
Enforcement Directorate (ED) on Monday opposed the petition filed by Rohin Modi (19), the son of diamantaire Nirav Modi, a prime accused in the Rs.13,500-crore Punjab National Bank (PNB) fraud case and arrested in London by the Scotland Yard authorities in March 2019, challenging confiscation of properties purportedly belonging to a trust started in his own name.
Additional solicitor-general (ASG) Anil Singh, who represented ED, supported the special court order issued on June 8, passed under Section 12 of the Fugitive Economic Offenders (FEO) Act, 2018, ordering the confiscation of movable and immovable properties worth Rs. 1,396 crore, belonging to Nirav and his firms.
Singh said no notice or opportunity of being heard was required to be given to Rohin, as his parents, Nirav and Ami, both the trustees, were represented before the special court and were heard before passing of the order under challenge.
Singh added that no relief could be granted to Rohin, as Nirav has defrauded PNB to the tune of Rs. 6,498 crore, laundered most of the money outside the country, and himself fled to the United Kingdom (UK).
Rohin moved HC, through advocate Lakshyaved Odhekar, challenging the special court order primarily on the ground that no notice was issued either to Rohin Trust or him individually, before ordering the confiscation of the trust properties, which include a penthouse in Samudra Mahal building at Worli and about 40 costly artworks that belonged to the trust.
These properties have been ordered to be confiscated along with other movable and immovable properties purportedly belonging to Nirav and his firms.
Rohin’s counsel, advocate Abhimanyu Bhandari, pointed out that section 4 of the FEO Act, 2018, mandates that the ED shall submit a list of all the persons, other than the FEO, interested in or who may have an interest in the properties sought to be confiscated.
He said ED knew that Rohin Trust owned the paintings and the penthouse, but neither the trust nor the name of Rohin was mentioned in the list of interested persons submitted by ED, and no notice was given to them, despite the mandatory legal norm.
Bhandari also pointed out that section 10 of the FEO Act, 2018, provides for an opportunity of hearing to such interested persons, but no such opportunity was given to Rohin before passing the order.
He urged HC to grant Rohin an opportunity of hearing to point out to the special court that the penthouse cannot be ordered to be confiscated to the central government, terming it “proceeds of crime”, as the premises were purchased in 2006 --- about five years before PNB even started giving loans to Nirav and his firms.
Bhandari pleaded with the court to direct ED to maintain the status quo with respect to the penthouse.
Singh responded to the contention about the penthouse by pointing out that the trust was started with a paid-capital of only Rs. 1,000 and it could not have purchased the apartment for Rs. 24 crore.
He argued that the property was purchased by Nirav, as Ami and Rohin have a beneficial interest in the Rohin Trust of 90℅ and 10℅, respectively,
Bhandari contended that Ami, too, was required to be given notice and an opportunity of being heard.
A two-member HC division bench, comprising Justices Sadhana Jadhav and NJ Jamadar, however, adjourned the matter for the next hearing on Thursday (August 13) after finding that the file before it did not contain reasoned order of the special court.