Mumbai: The special PMLA court has exempted a plot in Telangana, owned by Mehul Choksi’s firm, from confiscation by the government. The court has directed that the property be released to IDBI Bank, as it was mortgaged against a credit facility of $62 million extended to Mehul Choksi’s Gitanjali Gems Limited (GGL).
ED Had Attached the Telangana Property During Probe
The Enforcement Directorate (ED) had attached the property while investigating the money laundering case. Following a joint lenders’ meeting on January 15, where IDBI Bank was authorised to seek its release, the bank approached the special court to reclaim the plot.
ED Raises No Objection to Release, Sets Condition on Proceeds
The ED raised no objection to releasing the property to IDBI Bank, on the condition that the sale proceeds be kept as a fixed deposit with the bank.
$62 Million Credit Facility and Loan Transfer
IDBI Bank had sanctioned an ECB loan of $62 million to GGL in November 2011. Later, IDBI transferred its rights for the principal amount of $10 million under the ECB facility to Bank of Baroda’s UAE branch, with both banks executing a deed of adherence. Subsequently, a 95.51-acre land parcel in Ranga Reddy, Telangana, was mortgaged with the banks.
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Gitanjali Gems Default and Recovery Action
After Gitanjali Gems defaulted, its account was declared an NPA in February 2018. IDBI Bank later demanded Rs 259.75 crore, rising to Rs 330.10 crore by 2020. With no repayment, IDBI and Bank of Baroda moved the DRT against Hyderabad Gems SES Ltd., Mehul Choksi and GGL, which in May 2022 upheld their Rs 346 crore claim and issued a recovery certificate the following month.
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