IFCI cheating case: CBI court quashes magisterial order issuing process against Mehul Choksi

On March 2 this year, the magistrate court issued a process against eight accused — Choksi’s Gitanjali Gems Ltd (GGL), Choksi, Vipul Chitalia, Narendra Jhaveri, Pradip Shah, Shrenik Shah, Keyur Mehta and Aniyath Nair

Mumbai: A special CBI court on Saturday set aside the order of a metropolitan magistrate court, taking cognisance of the chargesheet filed by the central agency against fugitive diamond trader Mehul Choksi and issuing process against him and some others in the case registered for allegedly cheating Industrial Finance Corporation of India (IFCI) of ₹22 crore. The sessions court has asked the magistrate court to hear the case afresh.

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On March 2 this year, the magistrate court issued a process against eight accused — Choksi’s Gitanjali Gems Ltd (GGL), Choksi, Vipul Chitalia, Narendra Jhaveri, Pradip Shah, Shrenik Shah, Keyur Mehta and Aniyath Nair.

Nair had through his lawyer Rahul Agarwal moved a review application before the special CBI court, saying no case was made out against him. Nair had contended that the magistrate court had failed to appreciate that documents filed by CBI in support of its case were inadmissible as evidence and cognisance taken based on such documents was bad in law.

The CBI objected to the plea, saying there was enough evidence against Nair and other accused to show that they were involved in the conspiracy.

Previously, Chitalia had approached the special CBI court against the order of the magistrate court. Followed by which the proceedings before the magistrate court were stayed.

The CBI had on April 30, 2022, registered a case against Gitanjali Gems and others based on a complaint filed by the IFCI. The IFCI alleged that Gitanjali Gems had in March 2016 approached them seeking financial assistance for meeting their long-term working capital requirements and induced the IFCI to sanction a corporate loan of ₹25 crore.

The IFCI disbursed the entire loan amount of ₹25 crore after the firm pledged some shares, gold, diamond, and gold-studded jewellery valued around twice the loan amount.

After Gitanjali Gems started committing defaults in repayment of the loan instalments, IFCI invoked the pledge and out of 20,60,064 shares, the IFCI could only sell 6,48,822 shares amounting to ₹4.07 crore, as the client ID of Choksi was suspended by the National Stock Depository Limited.