SC restores cheating case against fugitive businessman Mehul Choksi & his wife

In a setback to fugitive businessman Mehul Choksi and his wife, the Supreme Court has restored a cheating case lodged by the Gujarat Police, while setting aside a 2017 order of the state high court quashing the FIR against them.

Mehul Choksi, along with his nephew Nirav Modi, is also an accused in the Punjab National Bank (PNB) scam case in which they allegedly defrauded the bank of over Rs 14,000 crore.

According to the FIR registered in 2015 in Gujarat by complainant Digvijaysinh Himmatsinh Jadeja, Choksi and his wife stand accused of offences of forgery and cheating in connection with a business transaction involving 24 karat pure gold bars worth Rs 30 crore.

A bench of Justices Sanjiv Khanna and SVN Bhatti, in its November 29 verdict, set aside a May 5, 2017 order of the high court, and asked the police to proceed with its probe.

“The observations in this order will not be read as comments or observations on the merits of the case. Investigation will continue without being influenced by any of the findings or observations made in the impugned judgement or in the present order,” the bench said.

It said while conducting the probe, the investigating officer will keep in mind the rulings of the apex court and various high courts interpreting sections 406 (criminal breach of trust), 420 (cheating), 464 (forgery) and 465 (punishment for forgery) of the Indian Penal Code.

It said the high court order allowing the prayer for quashing the January 23, 2015 FIR showed that a detailed factual examination and evaluation was undertaken which was not necessary at that stage when the investigation was still on.

“We are of the opinion that the said examination and evaluation should not have been done by the high court,” the bench said.

It added there were disputed questions of fact as Choksi and his wife Priti pleaded that two agreements dated July 25, 2013 and August 13, 2013 were not binding on their company Geetanjali Jewellery Retail Limited (GJRL), which was a subsidiary of Gitanjali Gems Limited (GGL).

The bench said the complainant has submitted that the agreements were valid and binding.

It noted Jadeja’s submission that in terms of the agreement dated August 13, 2013, Choksi and his wife had agreed to return the gold bars to the complainant, who had made the payment for it.

The complainant said the gold bars were kept in GJRL’s deposit in fiduciary capacity.

The bench said these assertions by Jadeja were disputed factual questions and it would not go into these aspects.

“We should not go into these aspects, as it is a matter to be considered and examined in the investigation. A wrong may be civil wrong or in a given case be a civil wrong and equally constitute a criminal offence,” the bench said.

It added the ingredients of a criminal offence should be satisfied and the court will refrain from making detailed observations about that.

The apex court said, “Suffice it is to observe that the high court should not have examined and recorded a conclusion on the disputed fact to quash the FIR.”

It said pursuant to the FIR, the investigation had proceeded and the high court order dated September 14, 2016 states that 17 people had been examined by police and their statements under section 161 of the Code of Criminal Procedure recorded.

“The high court notes that statements under Section 164 (recorded by a magistrate) of the Code had also been recorded. These were not considered,” the bench said.

The top court said its attention was drawn to a paragraph in the judgement of the high court where an observation was made with regard to Priti Mehul Choksi that a wife could not be said to be involved in a case against her husband vicariously.

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“We believe that these observations are general observations to the effect that a wife/spouse could not be said to be involved vicariously. The appellant Digvijaysinh Himmatsinh Jadeja submits to the contrary. We would not like to make any comments as it is only upon investigation, that a specific role attributable to respondent Priti Mehul Choksi, if any, would be ascertained,” it said.

In 2015, Jadeja filed a complaint accusing Choksi’s firm of failing to return 105 kg of gold bars worth Rs 30 crore and not paying a minimum guarantee of Rs 19.42 crore.

Jadeja accused Choksi of committing a criminal breach of trust by misappropriating the property.

Choksi and his wife had moved the high court seeking quashing of the FIR on the ground that it was a civil dispute and their company had instituted a civil litigation in that regard.

The high court, while quashing the FIR, said it was a civil dispute and no criminal liability could be fastened on them. It had directed the civil court to expeditiously dispose of the suit before it within a period of one year.

Aggrieved by the order, Jadeja challenged it in the apex court.

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