Synopsis: In a major breakthrough in a high-value money laundering case, the Enforcement Directorate (ED) has restored properties worth ₹40 crore to Indian Bank in the Saravana Stores (Gold Palace) case. With this, total restitution in the case has reached ₹275 crore, making it one of the largest asset restorations to a public sector bank under the PMLA.
ED Restores ₹40 Crore Worth Properties to Indian Bank in Saravana Stores Case
In a significant development in a high-profile money laundering investigation, the Directorate of Enforcement (ED) has restored properties valued at ₹40 crore to Indian Bank. The restitution was carried out under Section 8(8) of the Prevention of Money Laundering Act (PMLA), 2002, in connection with the case against M/s Saravana Stores (Gold Palace) and its partners.
This restoration follows an earlier order of the Special PMLA Court dated February 17, 2025, through which properties worth ₹235 crore were returned to the bank. With the latest order, the cumulative value of assets restored has reached ₹275 crore, marking one of the largest restitutions to a public sector bank in a single money laundering probe.
Origin of the Investigation
The ED initiated its probe based on a First Information Report (FIR) registered on a complaint filed by Indian Bank under provisions of the Indian Penal Code, 1860 and the Prevention of Corruption Act, 1988.
The complaint alleged large-scale financial irregularities by the partners of Saravana Stores (Gold Palace) in the availing and utilisation of bank credit facilities.
Fund Diversion and Manipulation of Records
According to the investigation, the accused fraudulently availed credit facilities amounting to ₹240 crore from Indian Bank. Instead of using the funds for sanctioned business purposes, they were allegedly diverted for unauthorised uses.
- Submission of false and inflated stock statements
- Misuse of working capital limits
- Routing of funds to personal accounts
- Removal of hypothecated stock without bank consent
The diverted funds were used to acquire immovable properties in the names of the firm and its partners. Due to these irregularities, the loan account was classified as a Non-Performing Asset (NPA) on July 7, 2019, and later declared as fraud and wilful default, causing a wrongful loss of ₹312.13 crore to Indian Bank.
Attachment of Properties Under PMLA
During the money laundering investigation, the ED provisionally attached immovable properties worth ₹274.76 crore through two Provisional Attachment Orders issued under the PMLA.
These attachment orders were subsequently confirmed by the Adjudicating Authority on January 24, 2023, and October 27, 2023. A Prosecution Complaint was then filed before the Special PMLA Court on January 18, 2024.
Restitution to the Victim Bank
Indian Bank moved an application under Section 8(8) of the PMLA seeking restoration of the attached properties. The ED supported the application, stating that the attachment was primarily meant to safeguard the interests of the victim bank.
Accepting the plea, the Special PMLA Court ordered the restoration of properties worth ₹235 crore on February 17, 2025.
High Court Order
Subsequently, Indian Bank approached the High Court for restoration of additional properties valued at ₹40 crore. Considering the magnitude of loss suffered by the public sector bank and the broader public interest involved, the ED conveyed that it had no objection to the request.
By its order dated October 23, 2025, the High Court allowed the application and directed the restoration of the remaining properties, completing the current phase of restitution.
ED’s Stance
ED officials stated that the case highlights the broader objective of money laundering investigations — not only prosecuting offenders but also ensuring restitution to victims of financial crimes, particularly public sector banks.
The agency added that similar efforts will continue in other cases involving large-scale bank fraud and laundering of proceeds of crime.
📌 Key Takeaway
The restoration of ₹275 crore worth of assets to Indian Bank in the Saravana Stores case underscores the ED’s focus on victim compensation under the PMLA. Beyond prosecution, asset recovery and restitution remain central to tackling large-scale bank fraud and money laundering.
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