PNB Scam: Court allows confiscation of Nirav Modi's Assets

On Monday, in first such order passed under the Fugitive Economic Offenders Act (FEOA), a Special Court here allowed attachment & confiscation of assets owned by diamantaire Nirav Modi, a key accused in the multi-crore Punjab National Bank NSE 1.38 % (PNB) scam.

Special Judge V C Barde permitted the Enforcement Directorate (ED) to confiscate those assets owned by Nirav Modi under the Fugitive Economic Offender Act that are not mortgaged or hypothecated to the PNB.

The Court, in its order, said the assets shall be attached by the Enforcement Directorate under the provisions of the FEO Act within a month.

After that, the said properties/assets shall stand confiscated to the Central Govt under section 12(2) & 8 of the FEO Act, it said.

This is the first order of asset confiscation passed under the FEO Act, enacted two years ago, anywhere in the country.

Senior Lawyer Nitesh Jain from Shardul Amarchand Mangaldas law firm, who appeared for PNB, said the court has allowed those assets, that have not been mortgaged, secured or hypothecated to the bank, to be attached & confiscated.

However, the Special Court didn't permit the ED to attach the paintings owned by Modi & seized by the Income Tax department as the High Court of Bombay had earlier directed for the artworks to be auctioned but the money to be deposited & not disbursed.

The Special Court said the ED was at liberty to pursue legal remedies with respect to the paintings seized by the Income Tax department.

Nirav Modi (49), currently lodged in a UK jail, was declared a fugitive economic offender in Dec 2019, by the Court.

He was arrested in London in March 2019 & is presently fighting extradition to India, where he faces charges of fraud & money laundering in connection with the multi-crore PNB scam.

The jeweller was the second person to be declared a fugitive under the FEO Act after beleaguered businessman Vijay Mallya, who is also in the United Kingdom.

The FEO Act is aimed at deterring economic offenders from evading the law by remaining outside the jurisdiction of Indian Courts.

The law seeks to expedite the recovery of losses incurred by banks & other entities by confiscating the properties of the offender.

After he was declared a fugitive economic offender, the Enforcement Directorate had requested the Court to issue an order for confiscation of all properties, belonging directly or indirectly to him, both in India & abroad.

The ED had registered two cases of money laundering against Modi & his uncle Mehul Choksi, also a jeweller & another accused in the scam, on the basis of an FIR lodged against them by the CBI in Jan 2019.

The CBI had alleged that the duo had cheated PNB in connivance with certain bank officials by fraudulently getting Letters of Undertaking (LoUs) issued to their three firms without any collateral & without following prescribed procedure, & caused wrongful loss to the bank.

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