₹146-cr bank fraud case: Court allows CBI to rely on 14 witness statements recorded in separate case

Recording of statements of the 14 witnesses afresh would duplicate judicial time and effort, the court said

MUMBAI: A special court on Wednesday allowed the Central Bureau of Investigation (CBI) to rely on statements of 14 witnesses in a separate but connected case to prosecute fugitive diamantaire and Winsome Diamonds promoter Jatin R Mehta and others over an alleged ₹146.35-crore loss to Canara Bank.

₹146-cr bank fraud case: Court allows CBI to rely on 14 witness statements recorded in separate case

Special judge Nitin V Jiwane permitted the CBI to include the statements of the 14 witnesses, recorded before a magistrate in 2018, in the charge-sheet in the present case, saying recording of their statements afresh would duplicate judicial time and effort.

The CBI had sought the court’s permission to rely on statements recorded in a separate case registered in June 2016, based on a complaint by Canara Bank against Mehta, directors of Forever Precious Jewellery and Diamonds Ltd (FPJDL), Haytham Salman Ali Abu Obaidah who represented 13 UAE buyers, and others.

According to the prosecution, Canara Bank had sanctioned fund-based and non-fund-based credit facilities worth ₹162 crore to FPJDL. The company subsequently defaulted on gold-loan obligations, resulting in invocation of standby letters of credit by bullion banks, and resulting in losses worth ₹146.35 crore to Canara Bank.

The prosecution is one of 16 CBI cases registered between 2014 and 2019 against Mehta, Winsome Diamonds and Jewellery Ltd, FPJDL and others on complaints by different bank consortium members. The court records the alleged fraud across the 16 cases at approximately ₹5,500 crore.

The wider CBI case against Mehta and the group companies relates to their dealings with multiple banks. According to the agency’s case, FPJDL added new customers in 2012 on Mehta’s recommendation without adequate credit checks or monitoring and continued making sales despite earlier dues not being realised. The CBI has alleged that these transactions and the subsequent invocation of standby letters of credit resulted in losses to the lenders.

In the present case, the 14 witness statements were recorded before an additional chief judicial magistrate court at Esplanade between April and August 2018.

The special CBI court directed the agency to supply copies of all the statements it is relying upon to the accused before the next hearing date.