A special CBI court in Mumbai on Friday stayed the proceedings against fugitive diamantaire Mehul Choksi in the ₹55.27 crore loan fraud case involving a Canara Bank-led consortium, granting temporary relief to Choksi and two former employees of the Gitanjali Group.
The decision came after Choksi’s legal team — advocates Vijay Agarwal, Rahul Agarwal, and Jasmin Purani — challenged an April order by a magistrate court that had taken cognizance of the Central Bureau of Investigation’s (CBI) chargesheet and issued summons to the accused on the same day.
The defence argued that the magistrate’s order was passed “mechanically” and “without application of mind,” claiming that the issuance of summons occurred with “lightning speed” without adequate consideration of the contents of the chargesheet. Seeking interim relief, the defence moved a revision application before the special CBI court.
Special CBI Judge J.P. Darekar observed that the magistrate’s order did not include any reasoning or reflect an informed opinion based on the material presented in the chargesheet. “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 judge stated, emphasizing that such reasons are essential not just for litigants but also for higher courts reviewing lower court decisions.
Finding prima facie error in the lack of reasoning, Judge Darekar stayed further proceedings in the case until the next hearing on August 8. The court also issued notice to the CBI to respond to the revision application.
According to the CBI, Canara Bank and Bank of Maharashtra had jointly extended ₹55 crore in working capital loans to Bezel Jewellery, a company linked to the Gitanjali Group, for the manufacturing and sale of gold and diamond-studded jewellery. The agency alleges that the funds were misused and not repaid, resulting in a loss of over ₹55 crore to the banking consortium.
Mehul Choksi and his nephew Nirav Modi are already central figures in the much larger ₹13,500 crore Punjab National Bank scam. While Nirav Modi remains imprisoned in the UK pending extradition, Choksi is contesting legal proceedings in Belgium.
