Court Approves Auction of Gitanjali Gems' Properties Linked to PNB Fraud

MUMBAI: A special court under the Prevention of Money Laundering Act (PMLA) has given the green light to the liquidator of Gitanjali Gems Ltd, the jewellery company associated with fugitive businessman Mehul Choksi, to conduct the valuation and auction of its unsecured assets. The court has directed that the sale proceeds be held in fixed deposits under the court’s name until the money-laundering case concludes.

In an order dated November 4, special judge AV Gujarathi approved the application of liquidator Shantanu Ray, who was appointed by the National Company Law Tribunal (NCLT) in February this year. Gitanjali Gems is a central entity in the Enforcement Directorate’s (ED) probe into the ₹13,000-crore Punjab National Bank (PNB) fraud case, in which Choksi has been declared a fugitive economic offender.

Ray sought permission to dispose of unsecured properties currently under attachment in the ED case. The ED informed the court that it had no objection to the proposed valuation and sale.

The properties listed for auction include four residential flats in Borivali East; office premises in the Bharat Diamond Bourse at Bandra-Kurla Complex; four industrial units in Virwani Industrial Estate, Goregaon East; and silver bricks, semi-precious stones, and jewellery-making machinery located in the Jaipur Special Economic Zone. While several of these assets are held in the name of Gitanjali Gems Ltd, others belong to associated group companies such as Gitanjali Exports Corporation Ltd.

The court made it clear that only unsecured assets, those not claimed by secured creditors, may be auctioned. It also emphasized that the ED’s attachment over the properties remains intact, and the ownership and confiscation of the proceeds will be determined only after the trial.

The sale proceeds, after deducting expenses, shall be deposited in fixed deposits with ICICI Bank in the name of this court. The funds must remain under judicial custody as required under Sections 8(7) and 8(8) of the PMLA.

This order enables the liquidation process to move forward alongside the ongoing money-laundering proceedings, allowing certain assets of the defunct Gitanjali group to be monetized while safeguarding the proceeds until the case is finally decided.