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A special court in Mumbai recently approved the auction of 13 properties belonging to Gitanjali Gems Limited, a company owned by fugitive diamond trader Mehul Choksi, the primary accused in the Punjab National Bank (PNB) loan fraud case. The court ruled that maintaining idle properties would result in depreciation. These properties include residential and commercial units in Mumbai and Surat. The Enforcement Directorate (ED) had no objection to the liquidator's plea, and the sale proceeds will be deposited as fixed deposits in favour of the court. Choksi has been residing in Antigua since 2018, while investigations into his financial misconduct continue.
A special court in Mumbai recently granted permission for the auction of 13 properties linked to Gitanjali Gems Limited, a company owned by fugitive diamond trader Mehul Choksi, who is a prime accused in the Punjab National Bank (PNB) loan fraud case. Advertisement
Judge S M Menjoge, presiding over cases under the Prevention of Money Laundering Act (PMLA), upheld the official liquidator's plea, stating that properties left unmaintained would inevitably lose value.
The assets set for auction include seven residential flats in Kheni Tower, Santacruz (Mumbai), a commercial unit in Bharat Diamond Bourse, and four office spaces along with a shop in Diamond Park, Surat (Gujarat). The liquidator had sought permission for the valuation of these unsecured properties before proceeding with their sale through auction.
The Enforcement Directorate (ED) raised no objections to this request. Consequently, the court permitted the liquidator to undertake a valuation process and auction the unsecured properties owned by Gitanjali Gems Ltd. The special court has directed the ED to facilitate the auctioning of the unsecured properties after proper valuation. Unsecured properties refer to assets that have not been pledged as collateral to creditors. The court further ruled that the liquidator should deposit the proceeds from the sale as fixed deposits (FDs) with ICICI Bank, ensuring the funds remain under the court's jurisdiction.
Choksi has been residing in Antigua since 2018 after leaving India. His legal representative recently informed the court that he is suspected of suffering from cancer and is undergoing medical treatment in Belgium.
The ED's investigation into the Gitanjali Group and Choksi is based on an FIR registered by the CBI in 2018. Choksi allegedly conspired with associates and PNB officials to fraudulently secure LoUs and FLCs between 2014 and 2017, resulting in a financial loss of INR 7,080.86 crore to the public-sector bank. Entities linked to Choksi also reportedly secured credit exposure from a consortium of 32 banks, with outstanding dues amounting to INR 5,099.74 crore as of December 2017. Additionally, Choksi's nephew, Nirav Modi, another key accused in the PNB fraud case, is alleged to have defrauded the public-sector bank of INR 6,805.24 crore.
As investigations continue, both Choksi and Nirav Modi remain fugitives, with ongoing legal proceedings in multiple jurisdictions. The move to auction these properties underscores the authorities' persistent efforts to recover funds from one of India's largest financial frauds, ensuring that justice is served and creditors are compensated to the extent possible.
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