A Special Court in Mumbai has allowed the restoration of Nirav Modi’s assets worth Rs 440 crore to the Punjab National Bank (PNB), which was seized by the Enforcement Directorate (ED).
Nirav Modi and his uncle Mehul Choksi are accused of fraudulently availing credit facilities from the public sector bank PNB to the tune of Rs 14,000 crore.
During its probe, the ED attached several properties owned by Nirav Modi. Several of the properties were confiscated after he was declared a “fugitive economic offender” in December, 2019.
The order was passed by V. C. Barde, Special Judge for Prevention of Money Laundering Act (PML Act) on August 13.
PNB had filed several applications in July 2021, seeking the return of properties that were mortgaged to the bank for providing credit facilities to Nirav Modi’s two companies – Firestar Diamond International Private Limited (FDIPL) and Firestar International (FIL). PNB had filed the application as the individual plaintiff and the principal bank of PNB consortium and as the authorised representative of UBI consortium.
PNB, along with a consortium of banks, has approached the Court in the prosecution, under Section 8(8) and Section 8(7) of PML Act for release of the property attached by E.D.
Section 8(7) of PML Act deals with passing appropriate orders of confiscation or release of property in respect of which the Adjudicating Authority has confirmed attachment under Section 8(3).
Section 8(7) runs as under: “(7) Where the trial under this Act cannot be conducted by reason of the death of the accused or the accused being declared a proclaimed offender or for any other reason or having commenced but could not be concluded, the Special Court shall, on an application moved by the Director or a person claiming to be entitled to possession of a property in respect of which an order has been passed under sub-section (3) of section 8, pass appropriate orders regarding confiscation or release of the property, as the case may be, involved in the offence of money-laundering after having regard to the material before it.”
Section 8(8) of P.M.L. Act deals with direction to the Central Government to restore any confiscated property to the legitimate Claimant, which runs as under:
“(8) Where a property stands confiscated to the Central Government under sub-section (5), the Special Court, in such manner as may be prescribed, may also direct the Central Government to restore such confiscated property or part thereof a claimant with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of the offence of money laundering: Provided that the Special Court shall not consider such claim unless it is satisfied that the claimant has acted in good faith and has suffered the loss despite having taken all reasonable precautions and is not involved in the offence of money laundering: Provided further that the Special Court may, if it thinks fit, consider the claim of the claimant for the purposes of restoration of such properties during the trial of the case in such manner as may be prescribed.”
A Special Judge of the Money Laundering Court said that damage caused to the claimants’ (banks) has been accepted by the Debt Recovery Tribunal (DRT), which has ruled in his favour.