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A special Prevention of Money Laundering Act (PMLA) court in Mumbai has allowed ICICI Bank to place INR 33.02 crore in rental income linked to properties attached in the Mehul Choksi money laundering case into a fixed deposit. The amount, generated from a commercial property in a Kolkata mall, had been lying in a Kotak Mahindra Bank account. The court directed that the fixed deposit be maintained in the court’s name, with the funds protected from any adjustment against ICICI Bank’s outstanding claims. Future rental income will also be covered by the arrangement.
A special PMLA court in Mumbai has permitted ICICI Bank to transfer INR 33.02 crore in rental income generated from a property attached in the money laundering case involving businessman Mehul Choksi into a fixed deposit, allowing the funds to earn interest while remaining under judicial control.
The amount has accumulated as rent and related charges from a commercial unit in a Kolkata mall. The underlying property was attached by the Enforcement Directorate (ED) during its investigation into the financial fraud case involving Choksi and companies associated with him. The rental proceeds had been held in a Kotak Mahindra Bank account.
ICICI Bank approached the special court seeking permission to move the accumulated rental proceeds into a fixed deposit maintained in the court's name. The request also covered rental income and other charges that may accrue from the property until the attached asset is ultimately auctioned.
The bank's request was considered in the context of the wider process for dealing with assets attached during the PMLA proceedings. The ED did not oppose the transfer, subject to the condition that the money should remain protected and should not be used or transferred until the proceedings are finally decided.
The court allowed the arrangement after considering the fact that the substantial amount was otherwise lying idle in an account. Keeping the money in a fixed deposit would generate interest for the eventual beneficiary rather than allowing the funds to remain without earning a return.
However, the order places clear restrictions on ICICI Bank's ability to use the money. The fixed deposit has to be maintained in the name of the Special Court in the relevant PMLA case. It cannot be subjected to a lien, set-off, appropriation or adjustment by the bank against any outstanding amount it claims from the parties involved.
The distinction is important because ICICI Bank is among the financial institutions that have sought recovery through assets attached in the Choksi case. The bank had exposure to Choksi and his associated entities, while the PNB fraud investigation resulted in substantial assets being attached under the PMLA framework.
The ED has previously said that assets worth INR 2,565.90 crore connected with Choksi and the Gitanjali group were attached or seized during its investigation. The agency, along with the affected banks, has pursued a process aimed at monetising and restoring eligible assets to rightful claimants.
In December 2024, the ED announced that the Mumbai PMLA court had permitted the monetisation of properties worth INR 2,565.90 crore attached or seized in the case. The process included properties such as flats, factories and godowns, with the proceeds intended to facilitate restitution to the affected financial institutions.
The latest order deals specifically with income generated from an attached commercial asset rather than the sale of the underlying property. By placing the accumulated rent into a fixed deposit, the court has effectively preserved the principal while allowing additional value to accrue through interest.
The arrangement also establishes how income generated from attached properties can be managed while legal proceedings and asset-resolution processes continue. Rather than allowing rental proceeds to remain dormant, the funds can be invested under safeguards without altering their legal status.
For banks seeking recovery from attached assets, rental income can provide an interim financial stream while properties await valuation, auction or other proceedings. For the court and enforcement authorities, maintaining the money separately ensures that its eventual distribution remains subject to the outcome of the case.
The order therefore represents another step in the broader process of managing and monetising assets connected with the Choksi proceedings, while ensuring that the INR 33.02 crore rental proceeds remain protected until the court determines their ultimate disposition.
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