Mehtas tell UK court they’re willing to submit to Indian courts
Standard Chartered Bank, one of the lender banks, and Grant Thornton a global accountancy firm, have mounted legal proceedings against the Mehtas of Winsome Diamonds by alleging that companies registered in the UK were used to launder the fraud proceeds
London: Nearly a decade after diamantaire Jatin Mehta and his family allegedly defrauded and misappropriated 15 Indian banks to the tune of US $1 billion, and the CBI filed a closure report in March 2021, the Mehtas have told the high court in London that they are “willing or undertake to submit to Indian jurisdiction.”
This extraordinary claim was made on Tuesday, the first day of the two-day hearing wherein Justice Edwin Johnson is hearing an application by the Mehtas who have sought to challenge the Worldwide Freezing Order (WFO) imposed on them on the grounds that UK courts do not have jurisdiction.
Standard Chartered Bank, one of the lender banks, and Grant Thornton a global accountancy firm, have mounted legal proceedings against the Mehtas of Winsome Diamonds by alleging that companies registered in the UK were used to launder the fraud proceeds. The Mehtas also reside in London.
However, Thomas Grant, King’s Counsel, representing Jatin Mehta, his wife Sonia, and son Suraj told the court that his clients have been subject to an “artificial and erroneous” construction which has led to the case being wrongfully tried in UK whereas the correct jurisdiction is India.
Grant told the court on Tuesday that India has a highly “sophisticated” judicial system which should allow the claimants to pursue the case in India. In his attempt to make India appear the most appropriate forum for the case against the Mehta, Grant told the court: “On behalf of my three clients I say that these defendants (Jatin, Sonia, Suraj) are willing or undertake to submit to Indian jurisdiction.”
“We would like to see the terms in writing,” said Ewan McQuater, King’s Counsel, representing the claimants to which Grant replied that he will do so. Grant told the court that whether the Mehtas would appear in courts in India to give evidence or not is a matter for the future, and it should not dilute the current positioning that they are ready to submit to the writ of the Indian courts.
The Mehtas’ opposition to the Worldwide Freezing Order granted in May 2022 was split into two separate proceedings. In November 2022, Justice Johnson did not agree with the Mehtas that the WFO should be discharged due to non-disclosure and unfair presentation, and is now hearing the discharge application of the WFO on grounds of jurisdictional challenge.
The Mehtas claimed that they defaulted on the bullion loans as companies in UAE had failed to pay them for the gold which they had supplied to them. The CBI in its report has claimed that these UAE companies were related to the Mehtas, but the agency closed investigations as the Mehtas had fled India. They were traced to London and the use of England-registered companies by the Mehtas were used by lawyers acting on behalf of Standard Chartered Bank to bring proceedings against the family. That led to the WFO order in May due to fear of dissipation of assets which led to substantial financial restrictions on the family.
Although the case was started by SCB, HT reported earlier that more Indian banks have submitted proof of debt against the Mehtas in the high court in London. It remains to be seen whether Indian agencies would mount any fresh proceedings against the Mehtas now that it has been established that the family is based in London.