ED to prioritise asset restoration for victims; Rs 16,400 cr recovered

In addition to expediting the completion of investigations, the Enforcement Directorate will now prioritise restitution of assets

The Enforcement Directorate (ED) is set to increase its focus on restoring assets and properties to individuals defrauded by wrongdoers charged under the Prevention of Money Laundering Act (PMLA). In addition to expediting the completion of investigations, the ED will now prioritise the restitution of assets, The Economic Times reported.

Senior officials from the federal agency recently met to discuss the measures aimed at securing the recovery of assets for defrauded victims. As part of this initiative, officers from the Enforcement Directorate have been working to expedite the identification of cases where asset restoration can be prioritised, the report stated.

 

Till date, the ED has successfully restored assets amounting to around Rs 16,400 crore, following orders from special courts. These assets primarily relate to three high-profile cases, it added.

High-profile restorations: Mallya, Modi, and NSEL cases

In the case of former liquor baron and economic offender Vijay Mallya, the ED restored assets worth Rs 14,131 crore to a consortium of banks led by the State Bank of India. For Nirav Modi, another fugitive economic offender and diamond merchant, the agency returned assets valued at approx Rs 1,052 crore to a consortium of banks led by Punjab National Bank. 

Additionally, the ED returned assets totalling around Rs 1,220 crore to a Supreme Court-appointed committee for the restitution of 8,433 public investors in the National Spot Exchange Ltd (NSEL) case. Notably, in the cases of Mallya and Modi, restitution occurred even before formal charges were framed by the court.

Legal basis for restitution

The restoration of assets was ordered under Section 8(7) of the PMLA, considering that both Mallya and Modi were declared as fugitive economic offender. Since the claimants in these cases are public banks, the courts ruled that restoring assets was in the public interest. 

Discussions about restitution were also held during a meeting chaired by Justice (retd) Arijit Pasayat, head of the Supreme Court-appointed Special Investigation Team (SIT) on black money, last month in Bhubaneswar, the business-daily said.

Changes in PMLA for expedited restitution

Before 2018, asset restitution under Section 8(8) of the PMLA could only occur after the conviction of the accused and confiscation of the proceeds of crime, which significantly delayed the process. To address this, the Finance Act of 2018 introduced a provision allowing special courts to consider claimants’ requests for asset restoration during the trial itself. The rules were amended to permit the return of attached properties after charges are framed.

This reformed process has enabled the ED to expedite restitution efforts and return assets to rightful claimants more swiftly.