Restoration of properties: CBI court rejects Mehul Choksi’s plea

A CBI court has rejected an application by fugitive diamond trader Mehul Choksi to restore his properties that were attached by the Enforcement Directorate. Choksi is a prime accused in the Punjab National Bank fraud case. ICICI Bank, which had mortgaged the properties, objected to Choksi's plea. The court ruled that the properties were owned by other companies, not Choksi.

A special Central Bureau of Investigation (CBI) court on Wednesday rejected an application filed by fugitive diamond trader Mehul Choksi who had sought intervention in restoration of his properties by ICICI Bank. Choksi is one of the prime accused in the ₹13,850-crore fraud at Punjab National Bank (PNB).

Mehul Choksi, MD , Gitanjali Group at Taj Mansingh in delhi on 3 july 2010 //photo by priyanka parashar

ICICI Bank had earlier moved a plea before the court for restoration of a flat in Walkeshwar and another property in Raigad district, which were mortgaged with the bank and attached by the Enforcement Directorate (ED), from the agency. Choksi contended that he owned the properties and said, “Under section 3 of the PMLA (Restoration of Property) Rules 2016, a property cannot be restored without hearing its owner.”

The bank strongly objected to Choksi’s plea on grounds that the said properties were mortgaged with the bank and hence could not be claimed by Choksi.

While pronouncing the order, special judge S M Menjoge said the properties were not owned by Choksi but rather by N&J Finstock Private Limited, Rohan Mercantile Private Limited, Gitanjali Infratech Limited, and Hyderabad Gems SEZ Limited.

The CBI had on January 31, 2018, registered a case against Nirav Modi, his Firestar Group, his brother Nishal and several others for defrauding PNB of ₹6,498 crore. In a separate case, the agency booked his maternal uncle Mehul Choksi and several others, including some PNB officials, for allegedly defrauding the bank of ₹7,080 crore, using the same modus operandi - by fraudulently obtaining Letters of Undertaking (LoUs) and foreign letters of credit from PNB in favour of his Gitanjali Group firms.

Investigation by the CBI has revealed that between 2011 and 2017, about 1,214 LoUs totalling $373,11,10,331 (approximately ₹23,780 crore) were fraudulently issued by PNB to various overseas banks to finance imports by Modi’s firms - Diamonds R US, Stellar Diamonds and Solar Exports. Of the total LoUs, 150 - totalling ₹6,498.20 crore - remained unpaid when the scam came to light in January 2018.