₹7,080.86-crore PNB fraud: CBI court refuses to release Choksi’s international business head on bond

MUMBAI: A special court constituted under the Central Bureau of Investigation (CBI) on Tuesday rejected a plea by Sunil Bajranglal Varma, former international business head of fugitive diamantaire Mehul Choksi’s Gitanjali Group, seeking release on a bond in the alleged ₹7,080

MUMBAI: A special court constituted under the Central Bureau of Investigation (CBI) on Tuesday rejected a plea by Sunil Bajranglal Varma, former international business head of fugitive diamantaire Mehul Choksi’s Gitanjali Group, seeking release on a bond in the alleged ₹7,080.86-crore fraud at Punjab National Bank (PNB).

Special Judge S K Karhale said Varma had remained abroad and appeared before the trial court only after the Bombay High Court intervened, and therefore could not claim that he had cooperated with the investigation.

The CBI had registered the case on February 15, 2018, based on a complaint by a PNB officer. It later filed a supplementary chargesheet against Varma in June 2021 to facilitate extradition proceedings, naming him as an absconding accused. “Therefore, it cannot be held that the accused has co-operated for the investigation,” the court said while rejecting his plea.

Varma had argued that he had voluntarily appeared before the court and had cooperated with investigators. The court, however, rejected the claim, noting that the Bombay High Court had cancelled a non-bailable warrant (NBW) against him on the condition that he appear before the trial court.

“This also shows that his appearance was not voluntarily, but it was under compulsion and because of issuance of the NBW,” the court said.

Varma had sought release under Section 88 of the Code of Criminal Procedure (CrPC), which allows a court to seek a bond to secure a person’s appearance, instead of applying for regular bail. He pointed out that the special court had rejected the CBI’s plea to arrest him in July 2024 and that he had subsequently appeared before the agency and recorded his statement.

The CBI opposed his plea, arguing that Varma had stayed abroad, had not cooperated with the investigation and could flee again.

The court held that Section 88 had served its purpose once Varma appeared before it. Since the court had already taken cognisance of the charges against him, he would now have to seek regular bail. The judge said the court could consider his conduct while deciding such a plea and imposing conditions.

“Once the challan (chargesheet) has been filed, the question of grant of bail has to be considered and decided only with reference to the merits of the case,” the court said, relying on a Supreme Court ruling.

Choksi and companies linked to his Gitanjali Group are accused of causing a loss of about ₹7,080.86 crore to PNB through 165 fraudulent or unauthorised Letters of Undertaking (LoUs) and 58 unauthorised or fraudulent amendments to Foreign Letters of Credit.

Varma’s role came under the CBI’s scanner after the fraud surfaced. Investigators alleged that, as Gitanjali Gems’ head of international business, he played a “crucial role” in executing the fraudulent LoUs.

When Varma returned to India in July 2024, the CBI sought permission to arrest him, alleging that he was second in command in the Gitanjali Group after Choksi and had established and controlled dummy companies overseas. The special court, however, rejected the agency’s plea to arrest him.