Bombay HC temporarily stays FEO proceedings against Mehul Choksi
Choksi fled India in January 2018 and is currently based in Antigua and Barbuda. He has refused to return while agencies are pursuing his extradition with the authorities in the Caribbean nation.Updated: Jan 09, 2020 16:04 IST
In a major setback to Enforcement Directorate in its probe against Mehul Choksi, the Bombay High Court has temporarily stayed the proceedings under the fugitive economic offenders’ act 2018 against the absconder businessman.
Choksi fled India in January 2018 and is currently based in Antigua and Barbuda. He has refused to return while agencies are pursuing his extradition with the authorities in the Caribbean nation.
The special court under prevention of money laundering act (PMLA) in Mumbai is hearing the proceedings to declare Choksi a fugitive economic offender in the Punjab National Bank (PNB) scam worth Rs 13,500 crore. Under the FEO act, his properties abroad can be confiscated by the authorities.
The Bombay HC has ordered that the special PMLA court shall not pass the final order on the application filed by ED to declare Mehul Choksi a “Fugitive Economic Offender” till further orders while adjourning the matter for four weeks.
An ED officer said the HC has only asked the special court not to give a final order for 28 days. “It’s not a setback and proceedings will continue,” the officer added.
Choksi had challenged the proceedings through bunch of petitions in which he argued that he cannot be declared a fugitive economic offender as ED is 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 the ED. Both the applications were rejected by the special court in December last year.
His lawyers Vijay Aggarwal and Ashul Agarwal argued before the HC on Monday that complaint under the FEO act should be dismissed as the affidavit filed by ED deputy director is not “as per law”.
Citing anomalies on part of ED, Choksi’s lawyers argued that the agency didn’t 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. “….The Learned Special Court has failed to appreciate that in the present case the filing of the complaint is in itself bad in law and if a thing is wrong at its very inception then all subsequent actions are illegal. If the foundation is removed then the superstructure automatically falls,” Aggarwal stated.
The ED, in an affidavit filed in the high court in December, had stated that Choksi is accused of siphoning and laundering money to the tune of Rs 6,097 crore in the PNB scam, and despite having issued summons directing him to appear before it, he has not cooperated.
“He is a fugitive and absconder. He has deliberately and intentionally evaded from appearing before the investigating agency even after a special court has issued non-bailable warrants against him. This shows that he does not have any regard for the law of the land. It is apparent that the applicant (Choksi) has left India to avoid criminal prosecution for the offence of money laundering under the provisions of the Prevention of Money Laundering Act and continues to refuse to return to India to face criminal prosecution,” the agency added.