Unable to release money from accounts of Nirav Modi’s firm, banks tell court
Two banks told the special PMLA (Prevention of Money Laundering Act) court on Thursday that they could not release the money lying in the accounts of Firestar International Limited, a company owned by fugitive diamond trader Nirav Modi.
They were responding to an affidavit filed by the official liquidator who claimed that three banks were yet to release ₹37 crore from the firm’s accounts towards the recovery of debts. The liquidator was appointed by National Company Law Tribunal.
As per the affidavit, which was filed last October, the company had a deposit of ₹2.67 crore with Kotak Mahindra Bank, ₹17.98 crore with Union Bank of India, and ₹16.32 crore with Bank of Maharashtra.
The court had on August 13, 2021, directed the banks to release the money in favour of the liquidator. However, when the official reached out to the banks, they expressed their inability to do so, the affidavit said.
On Thursday, Kotak Mahindra Bank said the firm’s account was first attached by income tax department and a day later by the Enforcement Directorate, which is probing money laundering charges against Modi and his Firestar group firms.
It further told the court that I-T department had issued a notice on February 21, 2019, asking them to clear the dues Firestar International Limited owed the department.
“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 said, adding a demand draft of ₹2.46 crore was issued in favour of the department.
Bank of Maharashtra, however, said in its reply that the money held in the firm’s credit balance had been adjusted against a loan account.
Union Bank of India is yet to file its reply.
The liquidator had contended that the banks should not have touched the money lying in the firm’s accounts without the permission of the court.
The special court posted the matter for passing orders on February 23.