Court junks Nirav Modi sister’s plea for ED intervention in US bankruptcy matter

Mumbai: A special court on Monday rejected a plea of Purvi Mehta, sister of fugitive diamond trader and PNB scam accused Nirav Modi, seeking a direction to the Enforcement Directorate to intervene in bankruptcy proceedings underway against him in the United States where she has been made a defendant.

In the plea, filed in April last year before the special court for cases under the Fugitive Economics Offenders (FEO) Act, Mehta (47) had said the ED should be directed to intervene in the case before a US court and seek injunction at least with respect to assets concerning her.

She has turned an approver in the bank fraud case filed under provisions of the Prevention of Money Laundering Act (PMLA).

Special judge S M Menjoge, after hearing prosecution and defence sides, rejected Mehta’s plea, saying there was no provision in the FEO Act by which the relief sought by her can be granted.

This court cannot prevent any person from prosecuting any matter either in India or outside the country, the judge observed.

Nirav Modi, a key accused in the Rs 13,000-crore scam at state-run Punjab National Bank (PNB), was declared a fugitive economic offender in December 2019. The 51-year-old diamantaire is currently lodged in a UK prison.

In June 2020, a special PMLA court in Mumbai ordered confiscation of his properties which the ED claimed had been bought using proceeds of crime.

In her plea, Mehta, who has turned an approver in the PMLA case against Nirav Modi and others, said she had been made a defendant in bankruptcy proceedings against her brother in a US court.

It means her properties are also being considered by the US court and its proceedings overlap with those in India related to her, Mehta’s plea had said.

The ED should be directed to intervene in the case before the US court, and seek an injunction at least with respect to assets concerning her, said the plea.

Lawyers representing PNB, which is the victim of the multi-crore fraud, submitted before the court that Mehta’s plea was not maintainable.

The ED also strongly objected to her plea, saying Mehta’s properties had been already attached as per provisions of the FEO Act.

There was no provision in the FEO Act to direct the central agency to intervene in US court proceedings, it told the court.

The special court, while rejecting Mehta’s plea, pointed out that she’s an approver in the PMLA case and not in this matter (filed under the FEO Act) and therefore she cannot claim be an interested party.

Nirav Modi and his uncle Mehul Choksi, owners of prominent jewellery firms, are accused of cheating the nationalized bank to the tune of Rs 13,000 crore by fraudulently obtaining Letters of Undertaking which act as bank guarantee while taking loans in foreign countries.

Purvi Mehta and her husband Maiank Mehta were made approvers in the bank fraud case in January 2021 on condition of making full and true disclosure before the PMLA court.