NCLT Removes Sanjiv Sharan From Nirav Modi PNB Fraud Case

The Mumbai tribunal has also lifted the 2019 order freezing Sharan's assets, saying there is nothing on record linking him directly to the alleged Rs 11,400-crore scam.

The National Company Law Tribunal in Mumbai has taken Sanjiv Sharan's name off the company petition connected to the alleged Rs 11,400-crore Nirav Modi-Gitanjali Group fraud, and lifted the attachment on his properties that had stood since January 2019.

Sharan was Executive Director at Punjab National Bank when the scam surfaced in February 2018. He wasn't posted at the Brady House branch, where the fraudulent letters of undertaking were actually issued. He sat at PNB's Delhi headquarters. That distinction turned out to matter a great deal to the tribunal.

The bench was blunt about what it found, or rather didn't find, in the case against him. "There is nothing in the SFIO investigation report to indicate that the applicant was directly responsible for the oversight on the foreign exchange transactions that took place at Brady House Branch or was responsible for integration of SWIFT messages with CBS," the order states, adding there was no material, direct or circumstantial, to back the claim that he'd deliberately skipped standard procedure.

The Union of India had pushed back against dropping him, arguing his name in the CBI chargesheet was reason enough to keep him tied to the petition. The tribunal wasn't convinced. It pointed out that neither the PNB investigation report nor the SFIO findings actually place him at the centre of how the fraud was pulled off.

To make its point, the bench leaned on precedent, specifically the K.V. Brahmaji ruling from the NCLAT, which had earlier found that an Executive Director sitting at head office couldn't be treated as a party in a petition aimed squarely at the Nirav Modi and Gitanjali Group entities. That case, the tribunal said, sat on identical footing.

So the order goes: name deleted, attachment vacated, for Sharan specifically.

But the tribunal was careful to draw a line around what it had actually decided. "It is clarified that our observation in relation to conduct of the applicant are solely based on the material before us, and should not be taken as conclusive finding on the role of the applicant in the alleged fraud, if such role is otherwise proved on the basis of further material brought on record before any authority or forum or court," the order reads.

Worth remembering how we got here. Sharan was added to the petition in January 2019 as Respondent No. 84, one of 19 people brought in alongside the original list of 107 companies and seven LLPs the government believed were channels for the fraud. He filed his rejoinder in February 2022 denying any link to Nirav Modi, Mehul Choksi or the entities named. It's taken four and a half years for the tribunal to rule on his application.

The broader company petition against the Nirav Modi and Gitanjali Group entities continues. Whether the Union appeals Thursday's order to the NCLAT is the next thing to watch.