In a first, ED to begin restitution of seized money to victims of Rose Valley 'scam'; initial disbursal to be Rs 12 crore: Report

In a first, the Enforcement Directorate will start restituting money to victims of various scams with the first disbursement of around Rs 12 crore in attached Fixed Deposits (FDs) of Kolkata-based Rose Valley group to nearly 22 lakh small depositors.

The development was reported by Times of India citing an order by a special PMLA court in Kolkata on July 24. In its order, the court had asked the ED to transfer 14 attached FDs totaling Rs 11.99 crore in the Rose Valley 'scam' to a court monitored Asset Disposal Committee (ADC).

The court observed that this transfer of FDs is "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". The restitution of the money by ED also aligns with Prime Minister Narendra Modi's assurance during the Lok Sabha elections to compensate the victims of such scams by distributing the assets seized by the ED from the many accused during raids.

The initial round of restitution to Rose Valley follows an earlier order by the Calcutta High Court wherein an ADC was formed headed by former judge— Justice Dilip Kumar Seth. The court had directed the ADC to sell the assets of the accused company in West Bengal in public auction, and the sale proceeds to be deposited in a separate account to be opened by the committee.

The Kolkata court and ED are pursuing Section 8(8) of PMLA under which attached assets seized by the national probe agency 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".

Legally, the transfers will be carried after ED prepares a 'panchnama' for such attached properties that may be used as evidence during trial.

In the latest hearing, the special PMLA court is also said to have presented the possibility to acquit the accused— a prospect deterrent for the government's plan to compensate the victims who are duped.

The special judge observed: "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 special PMLA court further ruled, "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."