CBI court shifts Winsome Diamonds’ 2 cases to magistrate after PC Act angle dropped

In two separate orders, special judge Dr J P Darekar directed that the FIRs and related documents be transferred to the Chief Metropolitan Magistrate’s court at Esplanade, Mumbai. The prosecution has indicated that it now intends to file chargesheets only against private persons under provisions of the Indian Penal Code

Mumbai: A special CBI court in Mumbai on Friday transferred two bank fraud cases involving Winsome Diamonds & Jewellery Ltd, promoted by diamantaire Jatin Mehta, to a magistrate’s court after the agency said it found no evidence against any public servant under the Prevention of Corruption Act.

The CBI told the court that its investigation had not revealed any incriminating material against bank officials in two cases pertaining to Winsome Diamonds & Jewellery Ltd (Shutterstock)

In two separate orders, special judge Dr J P Darekar directed that the FIRs and related documents be transferred to the Chief Metropolitan Magistrate’s court at Esplanade, Mumbai. The prosecution has indicated that it now intends to file chargesheets only against private persons under provisions of the Indian Penal Code.

One case pertains to an alleged ₹264.15-crore fraud on Union Bank of India, based on a complaint filed on May 15, 2019 by Girdhari Lal Kundalwal, assistant general manager of the bank’s Mumbai Samachar Marg branch.

The FIR alleged that during 2012-13, Winsome Diamonds and its promoters and directors conspired to defraud the bank in relation to 10 standby letters of credit (SBLCs) issued to overseas bullion banks and packing credit facilities. The purported buyers, allegedly controlled by Haytham Salman Ali Abu Obeidah in the UAE, defaulted on payments, leading to invocation of the SBLCs and losses to the bank.

The second case relates to an alleged ₹639.48-crore fraud on Canara Bank, based on a complaint filed in June 2016 by Anil Manohar Rokade, then deputy general manager at the bank’s Mumbai circle office.

According to the FIR, Winsome Diamonds and its directors allegedly obtained credit facilities of about ₹706 crore, including 24 SBLCs issued to overseas bullion banks such as Bank of Nova Scotia (London), Standard Bank PLC (London) and Standard Chartered Bank. Defaults by overseas buyers allegedly led to invocation of guarantees and losses to the bank.

Both FIRs had initially invoked provisions of the Prevention of Corruption Act against “unknown public servants”. However, the CBI told the court that its investigation had not revealed any incriminating material against bank officials.

Observing this, the court said the prosecution now proposes to pursue charges only under the IPC, which are triable by a magistrate.