Nirav Modi case: Just ₹ 237.74 in account, liquidator moves to special court for release of funds

Nirav Modi case: Just ₹ 237.74 in account, liquidator moves to special court for release of funds

The special court asked the two banks to “strictly” comply with its 2021 order within three months without fail and called their action “arbitrary” in not doing so already.

FPJ News ServiceUpdated: Sunday, March 19, 2023, 03:19 PM IST
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Nirav Modi case: Special court asks BoM and UBI to defreeze accounts, release money to liquidator | ANI Twitter

Mumbai: The account of Nirav Modi's Firestar Diamond International Private Limited has a bank balance of ₹ 237.74 after Kotak Mahindra Bank transferred ₹ 2.46 crore to SBI for income tax dues and Union Bank of India and Bank of Maharashtra transferred only a part of the total amount to due. The liquidator appointed for the company moved to the special court asking for a release of the money.

After this the special court has directed Union Bank of India (UBI) and Bank of Maharashtra (BoM) to defreeze his firm’s accounts and release the money to the liquidator appointed with Punjab National Bank (PNB).

The special court asked the two banks to “strictly” comply with its 2021 order within three months without fail and called their action “arbitrary” in not doing so already. Special Judge SM Menjoge called the order “binding”.

In the 2021 order, the court had directed that properties exempted from confiscation under the FEO Act be released to PNB through the liquidator and these be returned or restored as and when required.

Nirav Modi among first Fugitive Economic Offenders

Modi was among the first to be declared an FEO under the legislation that was brought with the objective to enable Central agencies to confiscate and sell properties of such offenders, thus compelling them to return to the country and face prosecution.

The special court’s order came on a plea made by the official liquidator of Modi’s company Firestar Diamonds International Private Ltd. The liquidator had complained that despite repeated correspondences with these banks, one other bank and the prosecuting agency (the Enforcement Directorate; ED), they had not complied with the order in its true sense.

Balance amount not exclusive security of bank

Union Bank of India did not appear in response to a notice to it. The liquidator had stated before the court that the bank had transferred ₹17 crore to it, but had not transferred the balance amount. Special Judge Menjoge said in the order that the balance amount is not the exclusive security of the bank and it ought to have been transferred to the liquidator. 

Bank of Maharashtra had stated in its correspondence with the liquidator that it had adjusted the amount of ₹16 crore in the account of the jeweller’s company with pending loan amount.

The court found that there was “total disobedience” on the bank’s part of the order of the ED to defreeze the jeweller’s firm’s account and transfer it to the liquidator. The court said there was no permission obtained from it to do the same. It found that the ED had done its duty.

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