Court Allows ED to Auction Nirav Modi’s Mercedes Cars as Maintenance Costs Exceed Value
PNB Scam Case: Vehicles Lying Idle for Years, Depreciating Rapidly
Auction Seen as Practical Step to Prevent Financial Loss to Public Exchequer
By Our Legal Reporter
New Delhi: November 24, 2025:
In a significant development in the Punjab National Bank (PNB) fraud case, a Mumbai special court has permitted the Enforcement Directorate (ED) to auction two luxury cars belonging to fugitive diamond merchant Nirav Modi. The court observed that the vehicles, seized under the Prevention of Money Laundering Act (PMLA), have been lying idle for years and their maintenance costs now exceed their market value.
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Background of the Case
Nirav Modi, once a celebrated jeweller with global recognition, is the prime accused in the ₹14,000 crore PNB scam, one of India’s largest banking frauds. Declared a fugitive economic offender in 2019, Modi has been fighting extradition proceedings in the UK, where he is currently lodged in prison.
The ED had seized several of his assets, including high-end vehicles, luxury properties, and jewellery. Among these were two Mercedes-Benz cars—a Mercedes-Benz 4Matic FL 350 CDI and a Mercedes-Benz GLE 250—along with a Skoda Superb Elegance.
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Court’s Observations
Special Judge A.V. Gujarathi, while granting permission for auction, noted:
“If these vehicles are kept idle till the disposal of the case, then the value of these vehicles would decrease and even these vehicles would be damaged. Even the costs for maintenance of the vehicles would be more than the value of the vehicles.”
The court emphasized that auctioning the cars was a practical and necessary step to prevent further financial loss to the public exchequer.
Why Auction Was Necessary
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- Depreciation: Luxury cars lose value quickly when unused.
- Maintenance Costs: Insurance, servicing, and upkeep were proving costlier than the vehicles’ worth.
- Legal Delays: With Nirav Modi’s trial nowhere in sight, keeping the cars idle was financially imprudent.
The ED argued that auctioning the vehicles would preserve their remaining value and ensure that proceeds could be deposited in nationalized banks until final disposal of the case.
Wider Implications
This ruling highlights the judiciary’s pragmatic approach in handling assets seized from fugitive offenders. By allowing auction, the court ensures that public money is not wasted on maintaining depreciating assets.
Legal experts say this decision could set a precedent for similar cases where seized assets are prone to rapid depreciation, such as luxury cars, yachts, or electronic goods.
The PNB Scam Context
The PNB fraud, exposed in 2018, involved fraudulent Letters of Undertaking issued by bank officials, enabling Nirav Modi and his associates to secure overseas credit without proper collateral. The scam shook India’s banking sector and led to stricter compliance measures.
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Since then, the ED and other agencies have been pursuing recovery of assets linked to Modi and his uncle Mehul Choksi. Several properties, jewellery, and artworks have already been auctioned to recover part of the losses.
Reactions from Legal Community
Lawyers and financial experts welcomed the court’s decision, noting that it reflects responsible asset management. “There is no point in keeping depreciating assets idle. Auctioning them ensures that at least some value is preserved,” said a senior advocate.
Critics, however, argue that auctions often fetch lower prices than market value, potentially reducing recovery. Yet, the consensus remains that auctioning is better than letting assets rot.
What Happens Next
The ED will now proceed with the auction process, inviting bids for the vehicles. The proceeds will be deposited in a fixed deposit account with a nationalized bank until the case reaches final resolution.
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This move adds to the list of assets already liquidated in the PNB scam case, including luxury watches, paintings, and properties.
Conclusion
The Mumbai court’s decision to allow the auction of Nirav Modi’s Mercedes cars underscores the importance of practical financial management in long-running fraud cases. With maintenance costs exceeding value, the ruling ensures that public resources are not wasted.
As Nirav Modi continues to fight extradition in the UK, India’s enforcement agencies remain focused on recovering assets and minimizing losses from one of the country’s biggest banking scandals.
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