Mumbai: A special court under the Prevention of Money Laundering Act (PMLA) has granted permission to the Punjab National Bank (PNB) to sell or auction assets worth ₹66.33 crore, previously attached by the Enforcement Directorate (ED), in the infamous ₹13,500 crore PNB fraud case involving fugitive diamantaire Nirav Modi and his sister, Purvi Modi.
ED-Attached Properties Cleared for Sale
The order, passed on June 17 by Special PMLA Judge A.V. Gujarathi, allows the release of movable and immovable assets that had been confiscated by the ED as part of its probe into money laundering. These assets include:
- Jewellery, coins, watches, and cash worth ₹40.83 crore seized from Nirav Modi’s upscale Samudra Mahal residence in Mumbai’s Worli.
- A flat worth ₹19.50 crore registered in Purvi Modi’s name in Mumbai.
- Additional unvalued movable assets also found at Nirav Modi’s Worli property.
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The court observed that although Modi continues to be a fugitive and has failed to return to India, the ED did not object to the release of the assets, provided PNB adheres to specific conditions. The bank was instructed to furnish an undertaking, stating it will return the proceeds from the sale if required in the future.
Bank Consortium’s Losses Far Exceed Attached Assets
The consortium of lenders led by PNB has claimed losses of over ₹8,526 crore due to the fraud orchestrated by Nirav Modi, his uncle Mehul Choksi, and their associates. The total value of properties attached under the PMLA stands at approximately ₹2,324.97 crore, falling far short of the financial damage suffered by the banks.
By allowing the release of ₹66.33 crore worth of assets, the court has opened a pathway for partial recovery of losses, a long-pending demand by the defrauded banks. The ED, while not opposing the application, insisted that recovery conditions be clearly defined and enforceable.
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Legal Status of Accused and Global Pursuits
Nirav Modi, the primary accused in the scam, has been in a UK jail since 2019, fighting extradition to India. Meanwhile, his uncle and co-accused Mehul Choksi is embroiled in a legal battle over his citizenship and bail in a Belgian court.
Both are charged with orchestrating a sophisticated fraud involving fake Letters of Undertaking (LoUs) issued by PNB, enabling them to secure massive overseas credit without collateral. The scam triggered national outrage and led to banking reforms and stricter regulatory measures in India.