Properties worth Rs 523crore seized

Mumbai: The Enforcement Directorate (ED), as part of its probe in the PNB scam, has seized 21 immovable properties worth Rs 523.72 crore under the Prevention of Money Laundering Act (PMLA). The crackdown on immovable properties began after the government moved the Mumbai bench of the National Company Law Tribunal (NCLT) to confiscate all the properties owned by Nirav Modi and Mehul Choksi.  

This property seizure comes after the ED had frozen Rs 30 crore in a bank account and seized shares worth Rs 13.86 crores in a Nirav Modi company. They had also made an unusual discovery, where they found a huge quantity of imported watches stacked in 176 steel almirahs, 158 corrugated boxes & 60 plastic containers.

The ED has provisionally attached some of the properties belonging to Modi in connection with PNB fraud. However, looking at the procedures the ED needs to comply with and only one conviction so far under PMLA, that too in Jharkhand, there is a long way to go for recovery of money from the attached properties. Since properties are provisionally attached, the ED would first need to confirm the attachment and would also need Modi to be convicted to go ahead with recovery of money from those attached properties.

When contacted, advocate Hiten Venegaonkar, who is handling a number of ED cases, explained the procedure involved in attaching a property. “Under PMLA, the ED officers have right to provisionally attach properties. In short, it means that the ED authorities have come to a conclusion that these properties are arising out of proceeds of crime and therefore they are attaching it. But that action of attachment is subject to adjudication.” 

He said the adjudication takes place under section 8 of PMLA. “After attachment the provisional attachment case would be forwarded to the adjudicating authority, which will issue notice to the property owner.

After conducting hearing of ED officers and the person who is holding, possessing or owning the property, the authority will decide if the provisional attachment is to be made,” he said. 

According to him, once adjudicating authority comes to a conclusion that this property is arising out of proceeds of crime then it will confirm the provisional attachment and than it will become the final attachment.

A former ED official on condition of anonymity said that the purpose of attaching property is to recover the proceeds of the crime. When it is noticed that the income of the crime is converted into movable and immoveable properties then those are attached, so that those could be auctioned and money could be recovered.

However, the officer said that attached properties could be sold only after the accused is convicted and so far there has been only one conviction under PMLA in Jharkhand and that too is stayed by the high court, as an appeal has been filed against the judgement. 

This appeal is now pending before the court. This means the stage of auctioning property under PMLA has not yet come.

Attached Properties

A penthouse (created by joining three flats) worth Rs 81.16 crore

A flat worth Rs 15.45 crore in the sea-facing Samudra Mahal apartments in the Worli area

A farmhouse and adjoining land, worth over Rs 42.70 crore, in the Kihim area of beachside Alibaug

A 53-acre solar power plant, valued at Rs 70 crore, in the Karjat area of Ahmednagar district

Two office properties, worth about Rs 80 crore, in the name of Mark Business Enterprises Private Limited in the Lower Parel area of Mumbai