Even as absconding diamantaire Mehul Choksi, a key accused in the Punjab National Bank loan fraud case, has been arrested in Belgium, the ED`s plea to declare him a fugitive economic offender has been pending before a court in Mumbai for nearly seven years.
Choksi, 65, and his nephew diamantaire Nirav Modi are the prime accused in the Rs 13,000 crore PNB bank loan fraud case. Choksi was arrested in Belgium following an extradition request by Indian probe agencies, official sources said on Monday.
The Enforcement Directorate had filed the application in July 2018, seeking to declare Choksi an FEO and confiscate his assets under provisions of the Fugitive Economic Offenders Act.
However, the matter has witnessed repeated delays owing to a barrage of applications filed by the accused in the PMLA court and the Bombay High Court alleging procedural lapses in the Enforcement Directorate`s plea.
“The court is kept busy with frivolous applications, and hearing on our application to declare him (Choksi) an FEO has been adjourned for the past seven years,” an ED officer had said after the hearing was once again deferred this February.
“The court should have continued the hearing and taken a decision on the future course of action once the application was moved,” the officer had said.
He had urged the court to take note of the repeated filing of similar applications and to not entertain them.
Choksi`s lawyer had informed the court that the accused was undergoing treatment for suspected cancer in Belgium and intended to file an application in connection with his health.
Under the FEO Act, an individual can be declared a Fugitive Economic Offender if a warrant has been issued against him for an offence involving Rs 100 crore or more and he has left India while refusing to return. Once declared an FEO, the person`s property can be confiscated by the investigating agency.
Choksi had challenged the ED`s application in the Bombay High Court, alleging that the agency “had not followed proper procedure before filing the application and, hence, it stands vitiated”.
However, in September 2023, the High Court dismissed his plea, ruling that the ED had adhered to the prescribed format under the FEO Act. It also vacated a stay on the special court`s proceedings.
Despite this, the hearing on declaring Choksi FEO could not commence, with Choksi continuing to file applications before the special court through his lawyers.
While most of these pleas have been dismissed, a few remain pending. His latest attempt to stall proceedings through a plea to recall the notice issued on the ED`s FEO application was rejected in December 2023.
According to ED officials, Choksi left India under suspicious circumstances in early January 2018.
Choksi`s counsel has argued that the ED kept shifting its stance on the material grounds for declaring him an FEO and that the suspension of his Indian passport made it impossible for him to return for investigation.
The court, however, rejected this argument, stating that the notice was issued based on accurate information and not based on “wrong facts or mistaken assumptions”.
ED claimed the accused left the country under suspicious circumstances in the first week of January 2018.
Nirav Modi has already been declared as an FEO by the special court. He has been lodged in jail in London since 2019.
Choksi has been arrested in Belgium following an extradition request by Indian probe agencies.
The action against the second “prime suspect” in this case, after Nirav Modi, was taken on Saturday based on an extradition request moved by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED), official sources said.
Choksi was located in Belgium last year when he went there on the grounds of getting medical treatment. He had been staying in Antigua since 2018 after leaving India.
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