A Special PMLA Court in Mumbai has released certain properties owned by Nirav Modi and attached by Enforcement Directorate in favour of Punjab National Bank.
The properties, previously hypothecated with the bank against the credit facilities extended to Modi, are in the name of Firestar International Ltd., a firm controlled by Modi.
Modi and his firms are under the ED scanner for having defrauded PNB by obtaining numerous Letters of Undertaking in an unauthorised manner. The investigation agency had attached several of his properties under the Prevention of Money Laundering Act.
PNB applied for release of these properties, which according to it are worth Rs 108.3 crore.
It contended that its claim be considered by the court as it has legitimate interest in these properties, and has suffered the loss despite having taken reasonable precautions. Some of the assets attached by ED are amenable to market fluctuations and any delay in liquidating them may reduce their value, the bank argued.
ED didn’t contest PNB’s application saying no prejudice will be caused to it as upon confiscation of these assets on conclusion of the trial, they are anyway liable to be restored to banks under PMLA rules.
But the ED insisted on an undertaking by PNB that either the property or the equivalent amount will be returned with interest in case the court at any point in time deems it fit.
The PMLA court sought this undertaking from PNB. And released Modi’s mortgaged, hypothecated and guarantor properties in favour of the consortium of banks led by PNB.
Since Firestar International is currently under insolvency before the Mumbai bench of National Company Law Tribunal, the PMLA court directed the release to be made to the liquidator.
On Aug. 10, NCLT Mumbai had directed liquidation of the firm and appointed Santanu Ray as the liquidator.