PMLA Court Orders Restitution of Attached Properties in Shree Ganesh Jewellery House Bank Fraud Case.

The PMLA Court at Calcutta allowed restitution of properties valued at approximately ₹175 crore attached by the Directorate of Enforcement in a major bank fraud case involving M/s Shree Ganesh Jewellery House (I) Limited (SGJHIL). The Court held that the attached assets could be restored to the Liquidator for the purpose of enabling recovery of dues of public sector banks, subject to compliance with PMLA adjudication requirements.

• The case pertains to large-scale bank fraud committed by M/s Shree Ganesh Jewellery House (I) Limited and its Promoter-Directors Nilesh Parekh, Umesh Parekh, Kamlesh Parekh and others.

• The accused defrauded a consortium of 25 banks to the tune of approximately ₹2,672 crore through fraudulent banking transactions and diversion of loan funds.

• ED initiated investigation under the provisions of the PMLA, 2002, and attached properties located in West Bengal, Maharashtra, Gujarat and Telangana, aggregating to ₹193.11 crore, through two Provisional Attachment Orders.

• The investigation revealed that the promoters floated multiple companies in India and wholly-owned overseas subsidiaries in Dubai, Singapore and Hong Kong.

• A complex round-tripping mechanism was employed involving gold, bullion and jewellery. Jewellery manufactured in Manikanchan, Kolkata, was shown as exported to overseas entities controlled by the promoters.

• The goods were routed through associated companies and sold in foreign markets, but the export proceeds were not repatriated to India for repayment of bank loans.

• Instead, SGJHIL availed export bill discounting facilities from Indian banks, thereby receiving funds while the banks were unable to realise export proceeds.

• Through this modus operandi, the promoters misused credit facilities, retained export proceeds abroad, and concealed financial transactions, generating proceeds of crime.

• Considering the need to protect public interest and facilitate recovery of public sector bank funds, the ED held meetings with the Liquidator of the company.

• The Liquidator filed an application seeking restitution of the attached properties, which was supported by a consent petition filed by the ED.

• The Court allowed restitution of properties valued at approximately ₹175 crore, holding that banks are entitled to legitimate recovery of their dues.

• The Court recorded that the ED had no objection to restitution, subject to fulfilment of dues and deposit of any surplus amount before the competent authority for adjudication under the PMLA.

• Prevention of Money Laundering Act, 2002 – Attachment, adjudication and restitution of proceeds of crime.

• Principles governing restitution and recovery of public funds in financial fraud cases.

• Judicial oversight in balancing confiscation proceedings with liquidation and bank recovery processes.