A Mumbai CBI court halted proceedings against diamantaire Mehul Choksi in a Rs 55 crore bank fraud case until August 8. This followed a challenge from his lawyers who argued the magistrate's earlier order, which summoned Choksi, was made "mechanically" without proper review
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A special CBI court in Mumbai on Friday stayed proceedings against diamantaire Mehul Choksi until August 8 in the Rs 55 crore Canara Bank-led consortium loan fraud case, reported news agency PTI.
A magistrate court, in April, had taken cognisance of a chargesheet filed by the Central Bureau of Investigation (CBI) in the case and issued summons to the accused, including Choksi and two former employees of the Gitanjali group, Vipul Chitalia and Aniyath Nair.
However, their lawyers, Vijay Agarwal, Rahul Agarwal, and Jasmin Purani, filed a revision application on Friday against the magistrate's order before the special CBI court. They claimed the order was passed in "a mechanical manner without application of mind," reported PTI.
The lawyers argued that the order summoning the accused was issued with "lightning speed" on the same day the chargesheet was filed, without even properly examining it, and sought interim relief until their plea is decided.
Special Judge J P Darekar, presiding over the matter, found that the magistrate court's order did not reflect any opinion formed by it based on the material in the chargesheet. He held that reasons are necessary not only for litigants but also for superior courts to understand the thought process of the trial court.
"The court expects at least some brief outline of the reasons which leads the trial court to form an opinion to issue summons in the case," the special judge noted. Therefore, there is a prima facie error in providing no reasons to support the order of summons issuance, the special judge said, reported PTI.
Consequently, he stayed the magistrate court's proceedings until August 8, the next date of hearing, and also issued a notice to the CBI seeking its response to the plea.
As per the CBI, Canara Bank and Bank of Maharashtra had sanctioned Rs 30 crore and Rs 25 crore, respectively, as working capital facilities under a consortium agreement to Bezel Jewellery. The loan was granted for the manufacturing and sale of gold and diamond-studded jewellery, but the company allegedly did not use it for the intended purposes, according to the CBI, reported PTI.
The company subsequently failed to repay the loan, causing a loss of Rs 55.27 crore to the consortium, the agency alleged.
Choksi and his nephew Nirav Modi are prime accused in the much larger Rs 13,500-crore PNB 'scam'. While Choksi is currently fighting for bail in a court in Belgium, Nirav Modi has been incarcerated in a London jail since 2019.
(With inputs from PTI)
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