Mehul Choksi and his nephew Nirav Modi are the prime accused in a scam, being probed by both the CBI and ED. They are accused of siphoning off over Rs 13,000 crore from the PNB using Letters of Undertaking and Foreign Letters of Credit by bribing officials
Mehul Choksi is currently facing extradition proceedings. File Pic
A Mumbai court has rejected absconding diamond businessman Mehul Choksi's application seeking to quash the proceedings to declare him a 'Fugitive Economic Offender' (FEO) in the Punjab National Bank (PNB) fraud case.
A similar plea filed by Choksi, citing his arrest in Belgium and extradition proceedings initiated by Indian authorities, had been rejected by the special court for Prevention of Money Laundering Act in November.
In the fresh application, Choksi sought dismissal of the Enforcement Directorate's plea to declare him an FEO, arguing that the as per the Companies Act the federal probe agency can not continue its proceedings when the Serious Fraud Investigation Office is investigating the same allegations.
But ED, represented by special public prosecutor Kavita Patil, said the prohibition mentioned under section 212 (2) of the Companies Act only concerns offences covered under that specific Act. There is no such bar for proceeding with offences under other Acts, Patil said.
Also, as the rejection of the previous plea was not yet challenged before a superior court, that order had become final, she argued.
Choksi filed the new application only to delay the proceedings, the prosecutor alleged.
Agreeing with the contention, judge A V Gujarathi on Monday rejected Choksi's plea, stating that the SFIO investigation "would not be a stumbling block" for proceeding with the ED's application under Fugitive Economic Offender (FEO) Act.
Under the FEO Act, a person can be declared a Fugitive Economic Offender if a warrant has been issued against him for an offence involving an amount of Rs 100 crore or more and he has left the country and refuses to return. Once an accused is declared an FEO, the probe agency can confiscate their property.
Mehul Choksi and his nephew Nirav Modi are the prime accused in the scam, being probed by both the CBI and the Enforcement Directorate.
They are accused of siphoning off over Rs 13,000 crore from the PNB using Letters of Undertaking and Foreign Letters of Credit by bribing officials at the bank's Brady House branch in Mumbai.
While Choksi is facing extradition proceedings, Nirav Modi is lodged in a London jail.
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