CBI court rejects bail plea of Gokulnath Shetty in Punjab National Bank fraud

Mumbai: A special CBI court on Friday rejected the bail plea of Gokulnath Shetty, former deputy manager of the Punjab National Bank, who was arrested for allegedly causing huge losses to the public sector bank by illegally extending buyer’s credit facility to fugitive diamond trader Mehul Choksi and his firms

Mumbai: A special CBI court on Friday rejected the bail plea of Gokulnath Shetty, former deputy manager of the Punjab National Bank, who was arrested for allegedly causing huge losses to the public sector bank by illegally extending buyer’s credit facility to fugitive diamond trader Mehul Choksi and his firms.

20 February 2018, Mumbai : Punjab National Bank, at Brady House branch where the PNB fraud case involving jeweller Nirav Modi was allegedly carried out of this branch in Mumbai. Photo by Abhijit Bhatlekar/ Mint (Abhijit Bhatlekar/ Mint)

The Central Bureau of Investigation (CBI) had on February 15, 2018, registered an FIR against Choksi and his firms, Geetanjali Gems Ltd, M/s Gili India Ltd and M/s Nakshtra Brands, for causing a loss of ₹ 7,080 crore to the bank. A separate case had been registered against fugitive diamond trader Nirav Modi for causing a loss of ₹ 6,805.24 crore to the bank.

Investigations in the case involving Choksi revealed that Shetty, as deputy manager at the Brady House branch of the bank, had illegally issued 165 letters of undertaking (LoUs) in favour of Choksi’s firms and unauthorisedly enhanced buyer’s credit on 58 LoUs manifold, enabling the fugitive diamond trader to misappropriate funds from foreign countries and in the process caused huge losses to the public sector bank.

Shetty, in his bail plea, contended that he was 65 years old and had already spent over four years and eight months behind bars. He also submitted that at least three accused in the case had been granted bail on the ground that the trial was not likely to commence in the near future. His lawyer, Sandeep Karnik, submitted that there was no evidence of bribery against Shetty, except for the statement of one witness who said that he had received ₹ 1.02 crore from a Gitanjali group firm.

The special CBI court, however, rejected Shetty’s plea of parity, observing that the role played by him was very crucial and that he was part of the conspiracy. “Though Vipul Chitalia, Miten Pandya and some co-accused are released on bail by the Hon’ble High Court, their roles were different. Hence, ground of parity is not applicable to the applicant,” said special CBI judge SM Menjoge while rejecting Shetty’s bail plea.

The court also refused to consider his offer to not create any third-party rights in his three flats in Mumbai till completion of the trial. Shetty had said that the prosecution’s case was that he had received illegal gratification amounting to ₹2.27 crores and the price of the flats ranged between 5 and 6 crores – adequate to recover the amount of illegal gratification.