A Special Court on Monday permitted the Enforcement Directorate (ED) to confiscate properties of diamond merchant Nirav Modi, barring those mortgaged to parties like the Punjab National Bank (PNB), within a month.
Mr. Modi was declared a fugitive economic offender (FEO) on December 5, 2019 that enabled the ED to move the court for confiscation of his properties in India, the United Kingdom and the United Arab Emirates.
This is for the first time an agency will be able to confiscate the property of an economic offender since the FEO Act, 2018 came into force. The agency, through Hiten Venegavkar, had moved the application on January 19, 2020.
The court partly allowed confiscation of properties of some parties to the extent of their claim in respect of secured debts only by way of mortgage, hypothecation and guarantee deeds. Valuable paintings seized by the Income Tax Department will be attached by the ED under the provisions of the FEO Act within one month.
The properties of the PNB are excluded in the list of the properties claimed by the interested parties under the FEO. This will entitle them to proceed with their claim before the competent court, authority or tribunal in the manner provided by law.
The ED had listed properties valued at ₹1,396.07 crore for confiscation which include paintings, eight cars and other valuables, including watches, bags and purses, that were seized from Mr. Modi’s house at Samudra Mahal. The application also seeks to sell paintings seized by the Income Tax department.
Earlier, the court rejected an application for intervention from Mr. Modi into the hearing of confiscation of properties after the PNB approached the court against the process and had pleaded for release of Mr. Modi’s properties to the bank to clear dues.
Special Judge V.C. Barde in February held that Mr. Modi had no right to intervene as he was declared a fugitive economic offender and that he would not be heard before an order on confiscation of his properties was passed. Mr. Barde said the diamantaire had left the country under suspicious circumstances to ‘dodge the penal consequences of the acts he has done or committed while in India till the year 2017.’
“It can be gathered that as on date when the respondent left the country, that is on January 1, 2018, he was in know of the fact of due dates of payments [to the bank] which was November 25, 2018, and left the country therefore in suspicious circumstances,” the court observed.
