HC rejects plea to arraign witness as accused in ₹3,000-crore PNB fraud

The application filed by Nitin Shahi was “pre-mature” and appeared to have been filed “only to prolong the matter”, the court said, imposing a penalty of ₹10,000 on the petitioner

MUMBAI: The Bombay High Court has rejected a plea filed by Nitin Shahi, assistant finance officer of Gitanjali Gems Ltd, seeking to arraign Debjyoti Dutta, proprietor of Rishika Financials, as an accused in the ₹3,000-crore Punjab National Bank (PNB) fraud case in view of the incriminating material available against him.

HC rejects plea to arraign witness as accused in ₹3,000-crore PNB fraud

In the order dated March 18, a single judge bench of Justice Shivkumar Dige held that the plea summon was “pre-mature” in nature and not maintainable at the pre-trial stage. The court also imposed a penalty of ₹10,000 on Shahi for seeking to prolong the matter.

The case stems from a Central Bureau of Investigation (CBI) probe launched in February 2018 into the alleged fraudulent issuance of 142 Letters of Undertaking (LoU) by certain PNB officials without following prescribed banking procedure. It was claimed that the unauthorised transaction resulted in a wrongful loss of ₹3,032 crore to the PNB and corresponding gain to Shahi and others.

During the investigation, the CBI recorded Dutta’s statement, where he admitted to facilitating buyer’s credit transactions and receiving arrangement fees, a portion of which was shared with Gokulnath Shetty, a key accused bank official.

In 2020, Shahi moved the high court and sought to arraign Dutta as an accused, claiming the trial court had erred in rejecting his application.

Shahi’s counsel submitted that Dutta had issued cheques in favour of Shetty and his family, which was evident from the documents; this, he said, established that financial links went beyond the disputed LOUs.

“Despite having material suggesting his involvement, the CBI did not put Dutta on the array as an accused. Rather, he was relied upon as a prosecution witness,” Shahi’s counsel concluded.

Special public prosecutor Amit Munde argued that after completion of the investigation, sufficient material was found only to cite Dutta as a witness. The material on record did not satisfy the requirement for prosecution against Dutta as “financial transactions by itself do not amount to criminal conspiracy”, Munde said.

The court agreed with the prosecution’s contentions, and observed that the statement given by Dutta before the police could not be solely considered as an admission; it only held “evidentiary value” in the case. Hence, the application filed by Shahi was “pre-mature” and appeared to have been filed “only to prolong the matter”, the court said, imposing a penalty of ₹10,000 on the petitioner.