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Nirav Modi involved in Rs300-crore south Bombay bungalow dispute, court records show

Modi had rented the ground and first floors in the name of two his group companies, Dream Trading and AMI Merchandising Limited, for four years

mumbai Updated: Feb 24, 2018 11:14 IST
Nirav Modi,Bombay high court,PNB fraud
Nirav Modi at his office in Lower Parel, Mumbai. (HT FILE)

Bombay high court records show that diamond trader and prime suspect in the Rs11,400 crore Punjab National Bank (PNB) fraud, Nirav Modi, is involved in a 12-year legal dispute over a 21,500 sq ft Malabar Hill bungalow valued at more than Rs 300 crore. Hemant Bhatt, a Modi associate and director in the Modi-owned AMI Merchandising Pvt Ltd, was arrested in December 2013 for his alleged role in forging documents pertaining to the property.

Modi and his parents, too, were named in the FIR lodged with Malabar Hill police by Surendra Agarwal, who claims he was sold the property by its erstwhile owner, Najoo Bhiwandiwala, for Rs 70 crore in 2008.

According to available court documents, Bhiwandiwala leased two floors of the bungalow in 2003 to Modi, who wanted a place for his parents – Deepak and Pragya Modi – to stay when they visited India. Modi had rented the ground and first floors in the name of two his group companies, Dream Trading and AMI Merchandising Limited, for four years.

Bhatt, a director at AMI, had signed the lease agreement. According to the Central Bureau of Investigation (CBI), Bhatt was a director in 15 of Modi’s many group firms.

Modi and Bhatt claim that Bhiwandiwala had promised them that she will sell a part of the bungalow to Modi. This was allegedly written in a lease agreement that specified that a ‘option to purchase’ clause. They claim they would have paid Bhiwandiwala Rs 15.90 crore within five years, according to the contract.

When she was alive in 2006 (she was 91 then), Bhiwandiwala denied signing any such contract. In December 2005, when Modi approached Bhiwandiwala to purchase the property she did not respond. Modi filed a suit for execution of the agreement and also deposited Rs 16 crore with the Bombay High Court in 2006.

In December 2007, Bhiwandiwala sold the property to another diamond merchant Surendra Agarwal. In 2008, in response to Modi’s suit, Agarwal approached Malabar Hill police in 2008 to file a case for forgery and cheating against Modi. In the complaint, Agarwal claimed on behalf of Bhiwandiwala that she never signed any lease agreement with Modi that included a purchase option clause. On her behalf, he alleged that Modi and Bhatt had obtained her signature fraudulently on some of the agreements. He added that Modi had removed furniture and fixtures from the premises without her permission.

During the investigation, the police approached the notary official who admitted that he could certify that the signature and stamp on the declaration was his. When the police went to record Bhiwandiwala’s statement, they found she had lost her sense of hearing, and was unable to comprehend their questions. The police did not record her statement.

On August 22, 2008, the police filed a closure report, which Agarwal challenged. The magistrate’s court refused to accept the closure report and ordered a reinvestigation.

The second investigation took four years, and the police filed another closure report on July 20, 2012. This, too, was rejected by the court, and a third investigation was ordered. The police arrested Bhatt on December 4, 2013 – six years after the first complaint. Modi, meanwhile, applied for anticipatory bail at the Sessions court.

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In his arguments, the assistant public prosecutor contested Modi’s anticipatory bail saying he had breached the terms and conditions of the leave and licence agreement. He added that only a draft of the declaration was sent to Bhiwandiwala, and that “no cheque was sent with the letter”. He also said that on the date of the alleged declaration – August 29, 2008 – Modi was not in India, and that the declaration was notarised on February 2, 2009 though it was to be executed in August 2008.

When contacted on Friday, Gulab Shukla, one of the notary advocates whose stamp and signatures were found on the disputed agreement dated September 4, 2002, said, “I am 77 years old. I cannot recollect anything.” Hindustan Times reached out to the other lawyers – Ishwarlal Sonawane, Madhav Phanse and GJ Rajani – but there was no response.

In December 2013, the Sessions court granted Modi anticipatory bail, but also ordered the police to investigate the signatures of the complainant, the notary advocate, and the advocate who signed the agreement. Police records show that this was not done, and another closure report – the third – was filed in 2016. Meanwhile, Bhiwandiwala had passed away.

The magistrate’s court accepted the third closure report, but passed a few strictures against the police saying, “The material collected on record is not sufficient to issue process. There is no alternative than to accept C-summary report and to drop the proceedings.” A C-summary report is filed when the case is determined to be neither true nor false or when the criminal case was filed due to mistake of facts or the offence is of a civil nature.

Modi’s 2006 lawsuit, meanwhile, is still subjudice at Bombay High Court. During the hearing, the high court had appointed a court commission to cross-examine Modi. The cross-examination began on September 19, 2013 and it was completed more than four years later in November 2017. Modi was asked 837 questions in his cross examination, during which he admitted that the cheque he gave to Bhiwandiwala was never credited to her account. Modi’s chartered accountant Ramesh Assar will be examined on February 26 and 27.

First Published: Feb 24, 2018 09:50 IST