MUMBAI: A special CBI court has directed the Enforcement Directorate (ED) to release assets worth ₹60 crore belonging to fugitive diamantaire Nirav Modi to the Punjab National Bank (PNB), which had suffered huge losses in the alleged loan fraud perpetrated by Modi and his associates. Special CBI sessions judge AV Gujarathi on Tuesday ordered the ED to release jewellery, coins, watches and cash owned by Nirav Modi worth ₹40.83 crore and a flat registered in the name of his sister, Poorvi Modi, worth ₹19.50 crore.
The public sector bank had approached the court under the Prevention of Money Laundering Act (PMLA), seeking an order to release some of the properties confiscated by the ED. The PMLA allows a party to move court seeking to release a confiscated property if the party has a legitimate interest in the property and has suffered a quantifiable loss.
The plea observed that PNB and the consortium of banks led by Union Bank of India had suffered cumulative loss worth more than ₹8,526 crore on account of the fraud committed by Modi and his associates. Advocate Anuj Loya, representing the bank, submitted that the matter was pending since 2018.
The CBI court observed that it had already issued a proclamation against Nirav Modi, his brother Neeshal Modi and his close associate Subhash Parab in December 2019. The applications against Modi and others under the Fugitive Economic Offenders Act, 2018 were also pending, it noted. The ED submitted that they had no objection to exempt the properties mentioned by the PNB. Poorvi Modi’s advocate too did not object to the plea, observing that she neither had any beneficial interest in the properties nor did the properties belong to her.
The court observed that the properties and valuables were exempted from confiscation and should be released in favor of the PNB. It ordered the properties to be released to the recovery officer at the debt recovery tribunal, Mumbai. The court also directed the PNB “to file an undertaking to return the said amount with interest, in case, the court at any point in time, deemed it fit and appropriate, in the interest of justice to deposit the said amount in the court or to the complainant without any delay.”
Nirav Modi is the prime accused in the ₹13,850-crore fraud at the Punjab National Bank (PNB) and was declared a fugitive economic offender in December 2019. Modi and his uncle, Mehul Choksi, are accused of defrauding the PNB by obtaining fraudulent letters of undertaking (LoUs), enabling them to secure overseas loans without proper collateral.
The scam, uncovered in 2018, involved officials from PNB’s Brady House branch in Mumbai issuing unauthorised LoUs to Modi’s firms, allowing them to receive credit from foreign banks. The total loss to the PNB was estimated at ₹6,498 crore. The fraudulent transactions went unnoticed for several years due to the alleged collusion of certain bank officials. Modi, the mastermind behind the PNB scam, has been fighting extradition from the UK, where authorities arrested him in 2019.