₹55 Crore Bank Fraud Case: CBI Court Stays Proceedings Against Mehul Choksi

Mehul Choksi

A special CBI court in Mumbai has temporarily stayed proceedings against fugitive businessman Mehul Choksi in connection with a ₹55.27 crore loan fraud case involving a consortium led by Canara Bank.

The order, passe also extends relief to 2 former employees of the Gitanjali Group.

The stay follows a plea filed by Choksi’s legal team — advocates Vijay Agarwal, Rahul Agarwal, and Jasmin Purani — challenging a magistrate court’s April order which had taken cognizance of the CBI chargesheet and immediately issued summons to the accused.

The defence argued that the magistrate acted hastily and without applying judicial mind, claiming the issuance of summons was done at “lightning speed.” They contended that the lower court’s order lacked proper reasoning and failed to reflect a thoughtful examination of the chargesheet.

Taking note of these concerns, Special CBI Judge J.P. Darekar observed that the magistrate’s order did not provide any rationale or grounds for proceeding with the case. “At the very least, the trial court must include a brief reasoning behind its decision to issue summons,” the judge stated, highlighting the need for transparency, especially for appellate scrutiny.

Finding a prima facie lapse in the lower court’s order, the CBI court ordered a temporary suspension of the case proceedings until the next hearing on August 8. Additionally, a notice was issued to the CBI, directing the agency to respond to the revision application filed by Choksi’s counsel.

The Central Bureau of Investigation alleges that Bezel Jewellery, a company linked to the Gitanjali Group, received ₹55 crore in working capital loans from Canara Bank and Bank of Maharashtra. The loans, meant for manufacturing and selling diamond and gold jewellery, were allegedly diverted and not repaid, causing financial losses to the banks.

Choksi, already a central figure in the much larger ₹13,500 crore Punjab National Bank fraud, continues to fight legal battles abroad. While his nephew Nirav Modi remains in custody in the UK, awaiting extradition, Choksi is engaged in legal proceedings in Belgium, contesting efforts to return him to India.