NEW DELHI: Enforcement Directorate is set to start restituting money to victims of scams. It will start with disbursement of nearly Rs 12 crore in attached fixed deposits (FDs) of Rose Valley group of companies in Kolkata to around 22 lakh small depositors who were tempted by the accused companies into depositing money with them by by promising exorbitant returns that never materialised.
In a first, a special PMLA court in Kolkata on July 24 asked ED to transfer 14 attached FDs valued at Rs 11.99 crore in the Rose Valley scam to a court monitored Asset Disposal Committee (ADC), “subject to the conditions that amount shall be disbursed to the bona-fide claimants on pro-rata basis or as may be directed by ADC or by the court”.
ED started implementing the order, in keeping with PM Narendra Modi’s promise during Lok Sabha campaign to compensate victims of financial crimes by distributing among them accused’s assets that have been seized by ED.
During the campaign, Modi had said that upon being re-elected, he would explore legal options for restituting the victims of frauds by distributing among them the accused’s assets that remain with ED during pendency of the case; often, a long-drawn out process spanning many years which compounds the woes of the duped.
The Kolkata court and ED have found a way out in Section 8(8) of PMLA under which attached assets confiscated by ED can be restored to “a claimant with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of the offence of money laundering”. ED has to prepare panchnama for such transfer of attached property which may be used as evidence during trial, according to the law.
Although there is no clarity on the amendments government is planning to bring to help victims, given the PM’s focus during the campaign, ED is all set to to use the Kolkata court order as a precedent.
The restitution in the Rose Valley case is based on an earlier direction from Calcutta High Court where it had constituted the ADC headed by Justice Dilip Kumar Seth, former judge of Calcutta HC, to sell the assets of the accused company situated in West Bengal in public auction and the sale proceeds to be deposited in a separate account to be opened by the committee. Significantly, the special court, while passing the landmark order, also factored in the possibility of acquittal of the accused, a prospect which is a deterrent for govt’s plan to compensate the duped.
“I have also taken into account the eventuality, that is to say, suppose the accused are acquitted after trial, and then what will be the effect of such restoration order? The answer is, whatever is the result of the trial, the investors would get their money returned,” the special court judge said.
The order further justified the restitution and said, “It is appropriate and rational that the money should be utilised in returning the bankrupt investors and depositors instead of keeping it idle as NPA for a prolonged period because the trial in money laundering offence takes time to complete.”
In a first, a special PMLA court in Kolkata on July 24 asked ED to transfer 14 attached FDs valued at Rs 11.99 crore in the Rose Valley scam to a court monitored Asset Disposal Committee (ADC), “subject to the conditions that amount shall be disbursed to the bona-fide claimants on pro-rata basis or as may be directed by ADC or by the court”.
ED started implementing the order, in keeping with PM Narendra Modi’s promise during Lok Sabha campaign to compensate victims of financial crimes by distributing among them accused’s assets that have been seized by ED.
During the campaign, Modi had said that upon being re-elected, he would explore legal options for restituting the victims of frauds by distributing among them the accused’s assets that remain with ED during pendency of the case; often, a long-drawn out process spanning many years which compounds the woes of the duped.
The Kolkata court and ED have found a way out in Section 8(8) of PMLA under which attached assets confiscated by ED can be restored to “a claimant with a legitimate interest in the property, who may have suffered a quantifiable loss as a result of the offence of money laundering”. ED has to prepare panchnama for such transfer of attached property which may be used as evidence during trial, according to the law.
Although there is no clarity on the amendments government is planning to bring to help victims, given the PM’s focus during the campaign, ED is all set to to use the Kolkata court order as a precedent.
The restitution in the Rose Valley case is based on an earlier direction from Calcutta High Court where it had constituted the ADC headed by Justice Dilip Kumar Seth, former judge of Calcutta HC, to sell the assets of the accused company situated in West Bengal in public auction and the sale proceeds to be deposited in a separate account to be opened by the committee. Significantly, the special court, while passing the landmark order, also factored in the possibility of acquittal of the accused, a prospect which is a deterrent for govt’s plan to compensate the duped.
“I have also taken into account the eventuality, that is to say, suppose the accused are acquitted after trial, and then what will be the effect of such restoration order? The answer is, whatever is the result of the trial, the investors would get their money returned,” the special court judge said.
The order further justified the restitution and said, “It is appropriate and rational that the money should be utilised in returning the bankrupt investors and depositors instead of keeping it idle as NPA for a prolonged period because the trial in money laundering offence takes time to complete.”
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