The Bombay High Court on Tuesday, while hearing pleas by Punjab National Bank (PNB) and (ED) seeking claims over attached properties of fugitive diamond merchant Nirav Modi worth over Rs. 500 crores said that huge amounts are involved in the matter, which is ultimately public money while no steps are being taken by the bank.
“Huge amount of money involved, and no steps taken by the bank. After all, this is public money. What happens when a common man has to seek a loan?” the bench remarked. The PNB responded that the bank was not aware of the transactions or that the loans were unauthorized.
A division bench of Justice Revati Mohire-Dere and Justice Gauri Godse heard pleas wherein the investigation agency challenged an order of a special court, which permitted the release of nine attached properties worth Rs 424 crore to the bank in the loan fraud case. While the investigation agency claimed it ought to get the right over the property, the PNB said they were entitled to custody since they were the creditors.
The special court, designated under the Prevention of Money Laundering Act (PMLA), in October 2022 allowed the agency to confiscate 12 properties worth over Rs. 500 crores, except for the nine properties. The PNB was allowed to seize these assets. Weeks later in November 2022 the court modified its order and entitled PNB to a few more assets.
While the PNB claimed that they had right over the 12 properties as they were creditors, the ED said that they have a right over the remaining nine properties as well.
The Enforcement Directorate’s lawyer argued that the creditor was not entitled to the unsecured assets, and the central agency had “the first right over such unsecured or freehold assets”.
However, the PNB had submitted that the bank gave Nirav Modi and his company a huge loan. Due to the non-payment of dues, the bank’s financial condition was adversely affected, it said. According to PNB, the Debt Recovery Tribunal (DRT) awarded certain assets of Nirav Modi’s firm to the bank.
The bench granted both the parties to file their affidavits in reply within two weeks and posted further hearings in three weeks.
(With inputs from agencies)
