Unable to release money from accounts of Nirav Modi, two banks tell court
The National Company Law Tribunal had ordered the release of Rs 37 crore from accounts of the fugitive businessman in order to recover debts.
Kotak Mahindra Bank and Bank of Maharashtra told a Mumbai court on Thursday that they are unable to release the money deposited in the accounts of Firestar International Limited, a company owned by fugitive diamond merchant Nirav Modi, reported the Hindustan Times.
Modi and his associates are accused of duping the Punjab National Bank of more than Rs 13,000 crore. They allegedly made profits from fraudulent transactions involving letters of undertaking issued by the Punjab National Bank.
The Enforcement Directorate is investigating allegations against the fugitive diamond trader under the Prevention of Money Laundering Act.
On Thursday, Prevention of Money Laundering Act court was hearing an affidavit filed by the official liquidator contending that the Kotak Mahindra Bank, Union Bank of India and Bank of Maharashtra were yet to release Rs 37 crore from accounts of Modi’s company. The liquidator had been appointed by the National Company Law Tribunal for recovery of debts.
In an affidavit filed in October, the liquidator had said that Modi’s company had a deposit of Rs 2.67 crore with Kotak Mahindra Bank, Rs 17.98 crore with Union Bank of India, and Rs 16.32 crore with Bank of Maharashtra, Livemint reported.
However at Thursday’s hearing, Kotak Mahindra Bank said that the firm’s account was first attached by the Income Tax Department and then by the Enforcement Directorate.
“We had no choice but to make the payment [from the company’s account] as the dues were statutory and if they were not paid there would be grave consequences,” the bank told the court. “Therefore, a demand draft of Rs 2.46 crore was issued in favour of the department.”
The Bank of Maharashtra said in its reply that the money held in the firm’s credit balance had been adjusted against a loan account.
In October, the Mumbai court had also allowed the Enforcement Directorate to attach 39 properties owned by Modi, reported ANI. The court had also allowed an application from Punjab National Bank seeking to attach nine properties mortgaged or hypothecated by Modi and his companies.
Earlier in July, the central investigating agency had attached gems, jewellery and bank balances worth Rs 253.62 crore of companies linked to the fugitive trader.