Editor’s Note
A Mumbai special court has authorized the auction of assets belonging to Mehul Choksi’s Gitanjali Gems, with proceeds to be held by the court. This follows a prior order allowing the evaluation and disposal of the company’s properties.
A Mumbai special PMLA court has allowed the official liquidator of Mehul Choksi’s Gitanjali Gems Limited to auction approximately 13 properties owned by the company. The court stated that the proceeds from the auction should be kept as a fixed deposit in the name of the special court. In February, the court had granted a similar application, permitting the liquidator to evaluate Gitanjali Gems’ assets and subsequently dispose of them through auction.
Following the special court’s order, properties linked to Nirav Modi and his uncle Mehul Choksi will be auctioned. These assets include four flats in Borivali (valued at Rs 2.6 crore each), a commercial unit in the central wing of Bharat Diamond Bourse in BKC, 14 car parking spots (Rs 19.7 crore), six industrial premises in Goregaon (East) (Rs 18.7 crore), silver bricks, semi-precious stones, and machinery at the company’s facility in Jaipur SEZ (Rs 90,120). These valuations are from 2018.
Special Judge AV Gujarati stated that if the properties are left idle without maintenance, their value will certainly depreciate. Therefore, it is necessary to pass an immediate order in this case. The judge said the liquidator is permitted to conduct the expected valuation of the properties owned by GGL.
The judge said that after initiating the above valuation process, the liquidator must follow due procedure under applicable law. The liquidator is permitted to auction the unsecured assets owned by GGL, and the Enforcement Directorate will also cooperate. Furthermore, the liquidator is permitted to open a fixed deposit with ICICI Bank (as the lead bank of the GGL consortium and NWL consortium) for the amount realized from the sale of assets. The NWL consortium is an association of banks led by ICICI Bank. They are creditors to the companies involved in the PNB scam.
The judge also stated that the sale proceeds deposited as an FD shall be distributed to the victim lenders.
This application was submitted by GGL’s liquidator under the PMLA Act. It was submitted that the Committee of Creditors (CoC) initiated liquidation proceedings by passing a resolution in 2019. The liquidator was appointed by an order of the National Company Law Tribunal (NCLT) on February 7, 2024. On September 10, 2024, the special court allowed the liquidator to evaluate the secured assets of the company led by Nirav Modi and Choksi.
The court then sought a response from the ED. In its reply presented through Special Public Prosecutor Kavita Patil, the ED stated that the petition filed by the liquidator is in the interest of justice and a necessary order can be passed. The ED raised no objection to the petition. Nirav Modi is imprisoned in a UK jail, while Mehul Choksi is in a Belgian jail.
