A bench of Justices S Muralidhar and I S Mehta passed the direction after the company's lawyer said relief should not be denied to it on a technicality that Firestar International had authorised the filing of petitions by its subsidiary, Firestar Diamond.
"If we should not stress upon technicality. Then ask Mr Modi to come back. Ask him to come back," the bench told advocate Vijay Aggarwal, who appeared for Firestar Diamond and Firestar International.
Expressing "serious concern" over Nirav Modi's statement to investigative agencies that he will not submit to their jurisdiction, the court said "we are dealing with a fugitive here according to them (ED). A fugitive from justice stands on a different footing."
Mr Agarwal, however, said that the media has termed Nirav Modi as a fugitive and only non-bailable warrants have been issued against him and no order proclaiming him as an absconder has been passed.
The Enforcement Directorate (ED) has conducted searches and seizure of the company and its assets in connection with a money laundering case related to the over Rs 11,000 crore Punjab National Bank (PNB) fraud case.
Mr Agarwal urged the bench to either stay the ED proceedings against the two companies or direct the agency to provide the reasons for its search and seizure action.
The ED, represented by Additional Solicitor General Sandeep Sethi and central government standing counsel Amit Mahajan, raised several objections, including that of jurisdiction, against maintainability of the pleas.
The agency contended that no relief should be granted to the two companies under the discretionary power of the court as Nirav Modi was a "fugitive from justice", was "absconding" and not joining the investigation.
It showed the share holding pattern of the two companies and several others in which Nirav Modi has stake and argued that he was the person behind all of them.
The court took note of the share holding pattern and said it was "intricate" and "speaks for itself".
The bench also said there was merit in ED's contention that while the "driving force behind the companies" (Modi) was not submitting to the agency's jurisdiction, his companies cannot be given any discretionary relief.
It asked the ED to file its response to the pleas moved by Choksi's Gitanjali Gems and Modi's Firestar International, the parent company of Firestar Diamonds which had earlier moved high court against the ED proceedings.
During the hearing, Mr Agarwal argued that the agency was making contradictory submissions. He said on one hand it was saying Nirav Modi was not separate from the two companies, on the other it was saying that the Board of Firestar International cannot authorise filing of petitions by Firestar Diamond as they were different entities.
The court, however, observed that in view of the board resolution by Firestar International, the petitions of Firestar Diamond were bad from inception and added that the conduct of Nirav Modi was also essential to consider grant of discretionary relief.
With regard to the plea by Choksi's Gitanjali Gems, which has challenged the alleged illegal seizure of documents and articles by the probe agency, the bench said its share holding too has to be seen to ascertain who holds the controlling interest.
"The bottom line is that under Article 226 for grant of discretionary relief, we may want to examine to whom the benefit will enure. We have to see who will be benefitted," the court said.
The three companies in their respective pleas have sought directions to ED to supply them copies of search warrants, the ECIR registered by the agency on the basis of which searches were made in their premises and the entire documentation and details of places where the assets have been kept for safe keeping.
They have also challenged the constitutionality of various provisions of the PMLA, including Section 17 which gives powers of search and seizure and Section 20 relating to retention of property.
Billionaire Nirav Modi, his uncle Mehul Choksi and others are being investigated by multiple probe agencies after the scam recently came to light following a complaint by the PNB that they had allegedly cheated the nationalised bank to the tune of Rs 11,400 crore, with the purported involvement of a few employees of the bank.
The ED has registered the money laundering case against Nirav Modi, his firms and others on the basis of a CBI FIR.
The CBI and the ED have registered FIRs to probe the case and intensified the crackdown on Nirav Modi and Choksi with the ED seizing jewellery and assets worth thousands of crores of rupees, the I-T department attaching various properties, and the CBI grilling several senior executives of his company.