Nirav Modi indirectly challenging money laundering case through his firm: ED

Firestar Diamond International Private Ltd, which is one of the accused entities in the money laundering case, has sought an interim stay of the ED proceedings in the matter.

Nirav Modi, facing a probe in the over Rs 12, 600 crore Punjab National Bank (PNB) fraud case, is “indirectly” challenging the money laundering case lodged against him in connection with the scam, the Enforcement Directorate (ED) told the Delhi High Court on Monday.

Nirav Modi's Firestar Diamond company office which was raided by the ED officials in connection with the Punjab National Bank (PNB) fraud case in Surat on Thursday.(PTI Photo)

The submission that Nirav Modi was “indirectly” challenging the case through his company Firestar Diamonds, was made by the ED before a bench of Justices S Muralidhar and I S Mehta.

Additional Solicitor General Sandeep Sethi, representing the ED, said Modi, who has been absconding, was trying to abuse the process of law by moving the plea through his company. Firestar Diamond International Private Ltd, which is one of the accused in the money laundering case, has sought an interim stay of the ED proceedings in the matter.

The ED, in its affidavit filed through central government standing counsel Amit Mahajan, has contended that the application for interim orders was “not maintainable” as it was “premature” and “misconceived”.

It has also said that “grave miscarriage of justice” will be caused to the probe, which is at a nascent stage, if the company’s plea for stay of further proceedings is granted. “The entire purpose of the application is apparently to hinder the investigation,” the ED said.

“Nirav Modi is the director of the petitioner company since incorporation, and is signatory to the memorandum and articles of the petitioner. He has not joined investigation pursuant to summons issued by the ED or even by the CBI. His communication has expressed that he does not intend to join investigation.”

“He is a fugitive and absconder. Such a person who is evading the law and has declined to submit to the jurisdiction of the agencies is disentitled to invoke the extraordinary jurisdiction under Article 226 of the Constitution. On this ground alone, the petition deserves to be dismissed,” the ED affidavit said.

The company’s plea was misconceived and premature, the ED said, adding it was presently at the stage of search and seizure as well as retention of records and was not taking possession of attached or frozen properties as apprehended by Firestar.

The ED in its affidavit has also claimed that based on information received and its preliminary investigation, it has reasons to believe that the Firestar group, under the control and chairmanship of Modi, “had committed acts which constitute the offence of money laundering and/ or was in possession of such proceeds of crime”.

Billionaire Nirav Modi, his uncle Mehul Choksi and others are being investigated by multiple probe agencies after the scam recently came to light following a complaint by the PNB that they had allegedly cheated the nationalised bank of more than Rs 12,600 crore, with the purported involvement of a few employees of the bank.

The ED has registered the money laundering case against Nirav Modi, his firms and others on the basis of a CBI FIR.

Over Rs 12,600 crore worth of Letters of Understanding and Letters of Credit were issued by the bank in favour of jewellers Modi and Choksi through SWIFT messages with only smaller sums being entered in the core banking solutions system, the agencies allege.

The CBI and the ED have registered FIRs to probe the case and intensified the crackdown on Nirav Modi and Choksi with the ED seizing jewellery and assets worth thousands of crores of rupees, the I-T department attaching various properties, and the CBI grilling several senior executives of his company.

“Quash the ED action of taking away the movable property and depositing the same with the PNB bank,” the company has said in its plea and added that the agency be directed to supply copy of the Enforcement Case Information Report (ECIR) registered by it, pursuant to which the search and seizure was conducted by the ED in its premises.

It has also sought framing of guidelines for conducting search and seizure by the ED, including whether the victim can be permitted to be a part of the process in order to ensure fair and transparent functioning of the agency.