The Bombay High Court has strongly criticized the Punjab National Bank (PNB) for its failure to take necessary measures to recoup the substantial loan amounts obtained by the absconding diamond merchant Nirav Modi.
During the hearing on Tuesday, a division bench led by Justice Revati Mohite-Dere and Justice Gauri Godse underscored the significance of the "enormous public money" involved in the case.
The court was addressing separate petitions filed by the PNB and the Enforcement Directorate (ED), both claiming ownership of Modi's attached properties worth Rs 500 crore.
These appeals were lodged against the Special PMLA Court's October 2022 ruling that permitted the ED to seize 12 out of 21 properties. The PNB objected, asserting its right to those 12 assets as the creditor.
The ED, being the investigating agency in the case, also appealed against the Special PML Court's order and contended its rights over the remaining nine properties, in addition to the 12 it was authorized to confiscate.
Out of the total 48 properties linked to Modi, the ED was granted attachment rights for 12, while the PNB was permitted to dispose of the remaining assets to recover its outstanding dues.
In its plea, the ED argued that the bank, as a creditor, was not entitled to unsecured assets, asserting its priority over the freehold properties.
Challenging the ED's stance, the PNB asserted its primary right to the assets, as it had extended the loans that had ultimately defaulted, severely impacting the bank.
Furthermore, the PNB referred to an order from the Debt Recovery Tribunal, which had awarded some of Modi's assets to the bank.
The high court has now granted a two-week period to the ED and the PNB to file their respective responses. The matter will be scheduled for further hearing in three weeks' time.
(With inputs from IANS)
