New Delhi: Properties worth more than Rs 125 crore—that were attached by the Enforcement Directorate (ED) in the Punjab National Bank scam case involving Gitanjali Gems’ Mehul Choksi—will be returned to the victims of money laundering following a court order on restitution of assets in the said case.
The handed over properties include flats in Mumbai and two factories and godowns situated at Santacruz Electronics Export Processing Zone (SEEPZ) Mumbai, ED officials confirmed to ThePrint.
“In pursuance to the order, the process of handing over of assets has been initiated and properties worth more than Rs 125 Crore have been handed over to the Liquidator of Gitanjali Gems Ltd,” an ED officer said.
This development, the officer said, is in continuation of the agency’s ongoing efforts for restitution of properties to their rightful owners and victims of money laundering.
“In order to put the productive assets to use and to enable financial institutes to monetise the assets attached or seized by ED, a concerted effort was put by us in collaboration with PNB and ICICI Bank and an application for restitution of assets was filed in the Mehul Choksi case,” the officer said in a statement.
“Based on the application filed by the banks, which was supported by the ED, the Special PMLA Court allowed the monetisation of properties,” the officer added.
According to the ED, to expedite the process of restitution of properties to the victim banks, the ED, along with the banks, took steps.
“The ED and banks agreed to take a common stand and moved the Special PMLA Court to file a Joint Application,” the officer said.
The court passed an order on the Joint Application, wherein it directed the ED to facilitate the banks and liquidators of different Gitanjali Group companies to carry out the valuation and auction of the attached or seized properties.
“After the auction of the said properties, the sale proceeds would be deposited in PNB/ICICI Bank as fixed deposits,” the officer said.
So far, six such properties, including flats at Kheni Tower, Santacruz East, Mumbai, collectively worth approximately Rs 27 crore, and two more properties collectively worth Rs 98.03 crore, were restored and handed over to the Liquidator of Gitanjali Gems Ltd, the ED officer said.
The ED had earlier followed a similar approach in the Rose Valley Group case. The ED had requested the Assets Disposal Committee (ADC) to approach the special court for the restitution of properties attached or seized by them. Subsequently, the ADC filed an application under Section 8(8) of the PMLA before the special court.
Section 8(8) of the PMLA states that if a property has been confiscated by the central government under Section 8(5) of the PMLA, the special court has the authority to direct it to restore the seized property to a claimant with a legitimate interest in the property who has suffered a quantifiable loss as a result of an offence of money laundering.
While the old PMLA rules only allowed for the restoration of property after the conclusion of the trial in money laundering cases, Section 8(8) of the PMLA was amended in 2018 in light of how long trials take to conclude. A second proviso was inserted in Section 8(8), which stated that a special court could consider the restoration of the property to the claimant while the trial was ongoing and established a separate procedure for it.
According to the ED, an investigation under the PMLA in the Mehul Choksi case revealed that he connived with his associates and bank officials of Punjab National Bank (PNB) between 2014 and 2017 and fraudulently obtained Letters of Undertaking and Foreign Letters of Credit from PNB, resulting in a wrongful loss of Rs 6,097.63 crore to PNB.
He had also taken a loan from ICICI Bank and defaulted on that loan as well, the ED said.
During the investigation, the ED conducted searches at more than 136 locations across India and seized valuables, including jewellery worth Rs 597.75 crore, pertaining to the Gitanjali Group of Mehul Choksi. Additionally, immovable and movable assets worth Rs 1,968.15 crore belonging to Mehul Choksi and the Gitanjali Group were attached.
This included immovable properties in India and overseas, vehicles, bank accounts, factories, and shares of listed companies.
(Edited by Radifah Kabir)
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