PNB Fraud Case: NCLAT Sets Aside Order Giving Relief To Directors Of Nirav Modi Firm

The National Company Law Appellate Tribunal (NCLAT) today set aside an NCLT order giving reprieve to independent directors of Nirav Modi-led Firestar International, paving the way for the government to attach their assets to recover dues related to the PNB fraud case.

  Allowing the government's appeal, the tribunal set aside the NCLT Mumbai order observing that they had exposure with the PNB and are found to be beneficiaries of the fraud, and without waiting for the report of the SFIO it was not open to exonerate some of the respondents.

"Though it was brought to the notice of the Tribunal that the respondent Companies, individuals including existing and erstwhile Directors, partners, trustees, beneficiaries and their associates or subsidiaries and firms had exposure with the Punjab National Bank and are prima facie found to be beneficiaries of the fraud without waiting for the report of the SFIO it was not open to the Tribunal to exonerate some of the Respondents from the charges," the NCLAT said.

It further said: "For the reasons aforesaid, we set aside the impugned order dated April 2, 2018."

The directors are -- Sujal Shah, Gopal Krishnan Nair,  Suresh Senapathy, Gautam Mukkavilli and Sanjay Rishi.

Passing an order on April 2, the National Company Law Tribunal had vacated stay on sale of disposal of assets of the five directors observing that there was "neither an averment nor any incriminating material placed against" them.

Earlier on February 23 this year, allowing the plea of the government, the NCLT had injuncted all companies and individuals from removal, transfer or disposal of funds and properties until its further orders.

While, NCLAT continued the orders of NCLT, which had allowed Anil Umesh Haldipur and Nazura Yash Ajaney to withdraw Rs one lakh per month from their bank accounts, while  restraining them from transfer or disposal of funds, assets and properties.

"As aforesaid persons are entitled to withdraw certain amounts for their subsistence and of their families, we find no ground to interfere with the impugned order of modification dated April 2, 2018, so far it relates to Anil Umesh Haldipur Nazura Yash Ajaney," said a two member NCLAT bench headed by Chairman Justice S J Mukhopadhaya.

Besides, the appellate tribunal has also allowed around 15 other directors to withdraw Rs one lakh per month from their account for their monthly expenses.

This also includes, the above mentioned five directors, who are now barred to access their assets.

"We are of the view that they are also entitled to withdraw certain amounts for their subsistence and of their families, therefore, we allow each of the aforesaid Respondents/Appellants to withdraw a sum of Rs one lakh per month from any of their accounts," said NCLAT in its order.