Saravana Stores Bank Fraud: ED Restores Rs235 Crore Properties to Indian Bank
Moneylife Digital Team 20 February 2025
In a significant development, the directorate of enforcement (ED) has successfully restored immovable properties worth Rs235 crore to Indian Bank in connection with a money laundering case involving Saravana Stores (Gold Palace) and its partners.
 
ED initiated its investigation following a first information report (FIR) registered by the central bureau of investigation (CBI) under various sections of the Indian Penal Code (IPC), 1860, and the Prevention of Corruption Act, 1988. The case stemmed from a complaint filed by Indian Bank which reported a fraudulent loss amounting to about Rs312 crore.
 
During the investigation, ED attached immovable properties worth Rs274.75 crore linked to Saravana Stores (Gold Palace). These attachments were later confirmed as part of the legal proceedings.
 
A prosecution complaint was filed by the ED before the Special Court under the Prevention of Money Laundering Act (PMLA), 2002. Meanwhile, Indian Bank, as the aggrieved party, sought the restoration of the attached properties by filing an application under Section 8(8) of PMLA, 2002.
 
In a move aimed at safeguarding public interest and assisting the financial institution in recovering its dues, ED backed Indian Bank's application and presented its legal arguments before the special court. After a detailed examination of the case, the court ruled in favour of Indian Bank, ordering the restoration of immovable properties valued at Rs235 crore.
 
In December 2022, ED attached immovable properties of Saravana Stores (Gold Palace) in Chennai amounting to Rs66.93 crore in connection with a money laundering case for defrauding Axis Bank.
 
"It is alleged that late Pallakudurai, P Sujatha and YP Shiravan, all partners of Saravana Stores (Gold Palace) with criminal intention, approached Axis Bank to cheat it. PMLA investigation revealed that Saravana Store (Gold Palace) availed the loan based on forged and fabricated documents," ED said.
 
The investigation revealed that these three overstated the inventory, used the open cash credit (OCC) limits to repay the loan availed from other financial institutions (banks and non-banking finance companies- NBFCs) and, thus, misappropriated and and diverted the funds for which it was not sanctioned and committed other irregularities and, thereby, these three people and firms cheated the lender. (Read: ED attaches Saravana Stores' assets worth Rs66.93 crore in money laundering case)
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