ED Secures Major Asset Recovery for Banks in Zoom Developers Scam
The Enforcement Directorate has achieved a significant victory for defrauded banks. A special court in Indore has ordered the restitution of properties worth Rs 180.87 crore to financial institutions that suffered losses due to M/s Zoom Developers Pvt Ltd.
Court Orders Property Return to Consortium and IDBI Bank
The Bhopal zonal office of the ED confirmed the restitution order from the special PMLA court. This decision provides major relief to lenders involved in one of India's most complex money laundering investigations.
The court acted on applications filed by the affected financial institutions. It directed the return of attached properties based on their fair market value.
For the 22-bank consortium led by Punjab National Bank, the court ordered restoration of three properties valued at Rs 106.5 crore. IDBI Bank, which pursued its claim separately, will receive 21 properties worth Rs 74.37 crore.
Background of the Massive Banking Fraud
This case originated from an FIR registered by the CBI in 2013. The agency charged Zoom Developers Pvt Ltd and its directors Vijay Madanlal Chaudhary and Bihari Lal Kejriwal with defrauding banks of approximately Rs 2,650 crore.
The company specialized in consultancy and engineering services. Investigators discovered it presented 'paper contracts' for intangible engineering services to foreign companies to fraudulently obtain loans and bank guarantees.
How the Money Laundering Scheme Operated
Instead of using these funds for legitimate business operations, Zoom Developers diverted the money through foreign middlemen and aggregators. These entities were secretly controlled by director Vijay Madanlal Chaudhary.
The funds flowed into various group companies, private trusts in India, and overseas entities. The ED provisionally attached the properties during its investigation, with the adjudicating authority later confirming these attachments.
Legal Process and Ongoing Investigation
The ED filed three separate prosecution complaints between 2015 and 2022. The restitution process gained momentum on January 23, 2025, when Punjab National Bank filed an application under Section 8(8) of the Prevention of Money Laundering Act.
This provision allows for the return of attached property to claimants who acted in good faith and suffered quantifiable losses. While this recovery represents progress, it covers only a fraction of the total Rs 2,650 crore loss incurred by banks.
The Enforcement Directorate has stated that further investigations into the case continue. The agency remains committed to pursuing all available legal avenues for additional recoveries in this complex financial fraud.
