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‘Not Rs 1.25 lakh cr, it will be 10 times…’: Top advocate decodes PM Modi’s ‘scam loot for poor’ plan

‘Not Rs 1.25 lakh cr, it will be 10 times…’: Top advocate decodes PM Modi’s ‘scam loot for poor’ plan

The Prime Minister said Rs 17,000 crore of the Rs 1.25 lakh crore of seized money has already been returned. Real estate constitutes nearly 80% of the value of the seized assets.

Business Today Desk
Updated May 18, 2024, 9:00 AM IST

The prime minister said Rs 17,000 crore of the Rs 1.25 lakh crore of seized money has already been returned.
Prime Minister Narendra Modi has said he is seeking legal advice on how to return black money back to India’s poor. In an exclusive interview to the India Today Group, the prime minister expressed a commitment to enact reforms to combat corruption effectively, with a focus on distributing seized wealth to victims.

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The prime minister said Rs 17,000 crore of the Rs 1.25 lakh crore of seized money has already been returned. Real estate constitutes nearly 80% of the value of the seized assets.

Senior Supreme Court advocate Vikas Pahwa, however, says the market value of seized assets would be 10 times the stated Rs 1.25 lakh crore.

"Majority of them (seized properties) are calculated on the basis of book value. Say a property is purchased in the 70s, 80s or 90s, what I have seen is the value given in the sale deed may be very, very old. So the value of a property purchased then would at least 10 times," he told BT TV.

Pahwa calls the figure of Rs 1.25 lakh crore conservative. "The moment we are able to achieve the disposal of trial, see the kind of money which will be at the central government’s disposal if we calculate the market value of the property".

Pahwa cited an example of a house confiscated in one of Delhi’s posh areas, which had a book value of around Rs 10-20 lakh when its actual market price was around Rs 30 crore.
"If that property is sold in the market, it would say fetch 10% less than the market value then also it will be around Rs 28-29 crore but what is shown in the provisional attachment order is only Rs 10-20 lakh."

So what kind of legal framework would be needed to achieve this far-reaching reform?

Pahwa points to a new law expected in July this year that has a provision for attachment of property in all cases, and not just confined to the Enforcement Directorate. "Probably the prime minister is indicating at the new law, which has a provision of attachment of property, confiscation of property during the trial and also distribution — all three things which are in the Money laundering Act, subject to the conclusion of trial."

Pahwa, however, added that till the trial is not concluded, the transfer of property ‘will be ‘risky proposition’. According to Enforcement Directorate data, as of January 31, 2023, the amount of money where provisional attachment orders were issued was Rs 1,15,350 core of which confiscations worth only Rs 36.23 core happened under PMLA.

"I think this is a great area. When the new Act comes the Constitutional validity of some of the provisions will have to be tested in the court of law."
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