Bombay HC refuses to interfere in auction of Nirav Modi’s artworks
The Bombay high court (HC) on Monday refused to interfere in the auction of paintings and artworks belonging to Camelot Enterprises Private Limited, a firm owned by diamantaire Nirav Modi.
The division bench of justice Akil Kureshi and justice Sarang Kotwal rejected a petition filed by Camelot, which had challenged the validity of eight assessment orders on the basis of which the Income Tax (I-T) department initiated recovery proceedings and put up 68 of the 173 artworks belonging to Camelot for auction on March 26. The I-T department’s move was meant to recover tax dues of ₹95.91 crore. The artworks fetched ₹54.48 crore at the auction.
Advocate Fereshte Sethna, who represented Camelot, submitted that the eight assessment orders were passed by the I-T department without giving a valid notice to the company or its directors.
She said instead of serving notice to the authorised signatory of the company and its director, Hemant Bhatt, who is in judicial custody, the I-T department served the notice to his son and Ramesh Ashar, another director who had resigned from the board when the assessment procedure begun.
Therefore, the orders were “non-existent in the eyes of law, and the recovery proceedings which culminated in the auction of the artworks were liable to be struck down”, Sethna argued. She said the I-T recovery officer did not fully ensure that the artworks belonged Camelot.
Besides, only 19 of the 68 artworks put up for auction belonged to the company, she said.
Additional solicitor general Anil Singh responded to the petition and said the department followed proper legal procedure to serve notices for assessment and recovery. He submitted that the keeper of the warehouse, where the artworks were kept, had told them that those belonged to Camelot. Moreover, Camelot forwarded the artworks to the department, he said. Although public notices were issued about the auction, and the artworks were displayed online for a long time, no one came forward to claim the same, Singh said.
The judges observed that although the firm claimed ownership of only 19 artworks and gave details of the same to the recovery officer on March 23, it failed to point out who owned the rest of the paintings.
The judges also noted that Camelot forwarded these artworks to the Fine Arts Warehousing and Logistics, Wadala, where they were kept at the firm’s expense. The bench rejected the petition as it involved “mixed questions of facts and law”, which it felt, should be better left to the appellate I-T authorities. It directed the appellate authorities to take a decision on the appeals on their own merits, if the firm approaches them, before April 20.