Bombay High Court dismisses Mehul Choksi’s pleas against ED’s move to declare him ‘fugitive’

An Indian court has made a significant decision regarding the case of economic offender Mehul Choksi on September 21. Choksi has been trying to challenge the efforts of India’s top economic intelligence agency, the Enforcement Directorate (ED), to declare him a Fugitive Economic Offender (FEO). This comes in connection with the infamous PNB bank scam case, where Choksi and billionaire jeweler Nirav Modi, the promoter of Gitanjali Gems, are accused. Both Choksi and Modi are alleged to have obtained fraudulent Letters of Undertaking (LoUs) and Foreign Letters of Credit (FLCs) totaling Rs 12,636 crore from Indian banks’ foreign branches.

It’s important to note that Nirav Modi was already declared an FEO back in December 2019, and now the ED is seeking a similar declaration against Mehul Choksi.

Choksi’s Allegations of Procedural Lapses

In his legal pleas, Choksi has raised concerns about procedural lapses in the proceedings before the special court designated under the Prevention of Money Laundering Act (PMLA). The hearing on these pleas concluded on September 11, and Justice Sarang V Kotwal of the Bombay High Court reserved the order. Initially, in January 2020, the High Court had provided temporary relief to Choksi by preventing the special court from issuing a final order on the ED’s application to label him as an FEO. This injunction had been extended multiple times until the recent development.

ED’s Application and the Fugitive Economic Offenders Act

In 2019, the Enforcement Directorate had submitted an application to the PMLA Court, seeking to declare Mehul Choksi as an FEO under the Fugitive Economic Offenders Act, 2018, and seize his assets. According to Indian laws, a person can be declared an FEO if a warrant is issued against them for an offense involving Rs 100 crore or more and if they have left the country and refused to return.

Choksi’s Legal Challenge

Choksi had subsequently approached the High Court to challenge the ED’s application, filing two petitions. One sought the dismissal of the central agency’s application, while the other sought permission to cross-examine the investigating officers and individuals whose statements the investigative agency relied upon to declare Choksi as an FEO.

ED’s Argument

Last month, the Enforcement Directorate also approached the High Court to review the stay on proceedings to declare Choksi as an FEO. The agency argued that Choksi is accused under the PMLA Act, and the prosecution against him is pending due to the High Court’s stay. They urged Justice Kotwal to promptly make a final decision on these petitions.

In summary, Mehul Choksi, an accused in the PNB bank scam case, has been facing legal challenges to prevent his declaration as a Fugitive Economic Offender by the Enforcement Directorate. He has alleged procedural lapses in the proceedings, leading to a series of legal battles in the Indian courts. The Enforcement Directorate, on the other hand, is determined to pursue the case against him, citing his alleged involvement in a significant financial offense. The outcome of these legal proceedings will have implications for Choksi’s status as a fugitive economic offender and the potential seizure of his assets.

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