ED Returns Rs.163.85 Crore Properties to SBI in Rs.380 Crore Nathella Jewellery Bank Fraud Case
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The Directorate of Enforcement (ED), Chennai Zonal Office, has restituted (returned back) 27 immovable properties located in Chennai, valued at Rs. 163.85 crore, to the State Bank of India (SBI) under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. This was done in connection with the Rs. 380 crore bank fraud case involving M/s Nathella Sampath Jewellery Private Limited (NSJPL) and others. The restitution was done on the basis of orders of the Principal Sessions/Special Court, Chennai, under Section 8(8) of PMLA.
The investigation was started by ED under PMLA based on an FIR dated 24-03-2018. The FIR was registered by the CBI, BS&FC, Bengaluru, on the basis of complaint filed by SBI on behalf of a consortium of three banks led by SBI. The consortium had provided a loan of Rs. 380 crore to NSJPL. According to the FIR, the accused diverted the funds for unintended purposes and failed to repay the loan, thereby cheating the banks and causing a wrongful loss.
As per the CBI FIR, the jewellery chain cheated SBI of Rs 278.31 crore, Union Bank of India of Rs 56.84 crore and HDFC Bank of Rs 44.60 crore.
The FIR said, “The total loss to the banks due to the fraud is Rs 379.75 crore (outstanding as of February 2, 2018) plus accrued interest from March 1, 2018.
The ED investigation revealed that the promoters of NSJPL used several entities to route and layer the loan funds for personal benefit and non-banking purposes. During the probe, 37 immovable properties worth Rs. 328.44 crore—equivalent to the proceeds of crime—were attached by ED on 31-07-2018 under Section 5 of PMLA. A prosecution complaint was later filed before the PMLA Special Court on 15-07-2019. Charges were framed in the case on 28-10-2024, and the trial is ongoing.
During the trial, SBI filed an application seeking restitution of 27 attached properties under Section 8(8) of PMLA, claiming it had the first right to these assets as a financial creditor under the SARFAESI Act. Under the second proviso of Section 8(8), the Special Court may restore properties to victims or claimants during trial. The application was supported by ED, as SBI was recognized as a victim bank in the case. The attached properties had been secured under PMLA specifically for the benefit of victim banks.
On 12 September 2025, 27 immovable properties in Chennai, valued at Rs. 163.85 crore, were formally released to SBI. This was done on the basis of Court Order.
