MUMBAI: A special court here has allowed “restoration” of properties worth Rs 440 crore of fugitive jeweler Nirav Modi, confiscated by the Enforcement Directorate (ED), to the Punjab National Bank (PNB).
Nirav Modi and his uncle Mehul Choksi are accused of committing a Rs 14,000 crore scam by obtaining credit facilities fraudulently from the PNB, a public sector bank. The order was passed by VC Barde, special judge for Prevention of Money Laundering Act, last week.
The detailed order became available on Thursday.
The PNB in July 2021 had filed multiple applications seeking release of the properties mortgaged with the bank against the credit facilities extended to Nirav Modi’s two firms, Firestar Diamond International Private Ltd (FDIPL) and Firestar International (FIL).
The applications were filed by PNB as an individual claimant and also as lead bank of the PNB consortium and authorized representative of the UBI consortium. The court allowed two pleas seeking the release of properties of FIL worth Rs 108.3 crore and those of FDIPL worth Rs 331.6 crore. “The claimants’ (banks) quantifiable loss has been recognized by the DRT (Debt Recovery Tribunal) who has passed judgments in their favor,” the court noted.
During its probe, the ED attached several properties owned by Nirav Modi though his family members and these companies. Several of the properties were confiscated after he was declared a “fugitive economic offender” in December 2019.
The bank and lenders’ consortium had objected to the confiscation, as the properties had been mortgaged with them when Modi and Choksi availed of Letters of Undertaking (LOUs). The court has now also directed the PNB to give an undertaking to return the properties or their value if directed in future.
Nirav Modi and Choksi along with some bank officials are accused of cheating the Punjab National Bank of Rs 14,000 crore by obtaining LoUs fraudulently. LoUs are issued as a guarantee for the applicant to seek loans from overseas Indian banks.
Nirav Modi is currently lodged in a UK jail and is fighting extradition to India.