PMLA court orders seizure of Nirav Modi's assets worth Rs 1,400 crore

Modi is presently in custody at Wandsworth prison in the UK awaiting extradition trial scheduled for September.
A special PMLA (Prevention of Money Laundering Act) court on Monday issued an order confiscating assets worth Rs 1,400 crore owned by fugitive diamond jeweller Nirav Modi.  


This is the first ever order on confiscation of an offender’s property, under the newly created Fugitive Economic Offenders (FEO) Act, 2018.


Nirav is in custody at Wandsworth prison in the UK, awaiting an extradition trial scheduled for September.


Monday’s order allows for the confiscation of his fixed properties, hypothecated or mortgaged, or given under corporate or personal guarantee to be liquidated and appropriated to lenders. Anything outside the purview of the same, such as apartments and homes in Dubai, will be realised by the government.


PMLA court judge V C Barde declared Nirav an FEO after hearing arguments of lawyers representing the diamantaire, lenders, and the ED. Nirav had earlier urged the court to set aside the ED’s plea to declare him an FEO.

He was declared a fugitive on December 5, 2019, and is the second businessman after Vijay Mallya to be declared an FEO under provisions of the FEO Act that came into existence in August last year. Under the new Act, all properties can be confiscated by the government, but there is a provision that says interested parties may claim exemption to the law and take precedence to claims.


Nitesh Jain, partner at Shardul Amarchand Mangaldas, who represented Punjab National Bank and the consortium, said: “This is a landmark victory for public sector banks, whose rights and interests have been recognised by the court pursuant to provisions under the Fugitive Act.”


The ED’s counsel agreed on its impact. “In the first order of its kind, the ED has received permission to confiscate properties of fugitive Nirav Modi. Properties worth several crores may be liquidated by the Centre to recover the lost economy of our country,” said Hiten Venegaonkar, the ED’s counsel.


“With this, banks can now appoint an administrator/liquidator to monetise assets to recover their monies,” he added.


 The Rs 1,400-crore confiscation includes Rs 55 crore of cash in banks, domestic property valued at Rs 600 crore, offshore properties and cash of Rs 100 crore, art worth Rs 100 crore, and jewellery and valuables worth Rs 490 crore that were seized during searches. 


It’s also likely the court will soon come up with a second order for the remaining attached assets. So far, the ED has made attachments of over  Rs 2,500 crore. Nirav will have a month to appeal the order.



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