Bombay HC extends stay on declaring Mehul Choksi fugitive economic offender

Extending its interim relief of January 2020 for three weeks, the Bombay high court (HC) has restrained the special Prevention of Money Laundering Act (PMLA) court from pronouncing its final order in the Enforcement Directorate’s (ED) application, seeking the declaration of businessman Mehul Choksi as a fugitive economic offender (FEO) in the Punjab National Bank fraud case

Extending its interim relief of January 2020 for three weeks, the Bombay high court (HC) has restrained the special Prevention of Money Laundering Act (PMLA) court from pronouncing its final order in the Enforcement Directorate’s (ED) application, seeking the declaration of businessman Mehul Choksi as a fugitive economic offender (FEO) in the Punjab National Bank fraud case.

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The single-judge bench of justice AS Gadkari was hearing Choksi’s applications challenging ED’s plea before PMLA court to declare him an FEO, and to cross-examine the investigation officer based on whose statement the agency wanted to declare him a fugitive offender. Choksi has sought the quashing of ED’s application in the special PMLA court. Choksi’s advocate Vijay Aggarwal said they needed time to file a brief rejoinder in the case.

The court accepted the request and allowed Agarwal to file it within two weeks and posted the further hearing after three weeks.

ED had applied before the special PMLA court to declare Choksi an FEO under the FEO Act, 2018, which stipulates that a person can be declared FEO if a warrant has been issued against him for an offence involving an amount of ₹100 crore or more, and if the person has left the country and refuses to return.

Choksi had challenged the proceedings through a bunch of petitions in which his counsel argued that he cannot be declared an FEO as ED was relying on the statements recorded under PMLA to build a case against him. He had also sought to cross-examine at least 21 witnesses cited by ED. Both the applications were rejected by the special court in December 2019.

Agarwal had argued that the complaint under FEO Act should be dismissed as the affidavit filed by ED’s deputy director is not as per law. Citing anomalies on ED’s part, Choksi’s side argued that the agency did not file the FEO complaint in a prescribed format according to rule 3 of the declaration of Fugitive Economic Offenders (Forms and Manners of Filing Application) Rules, 2018.