The Supreme Court on Tuesday suggested Mainak Mehta, the brother-in-law of fugitive diamantaire Nirav Modi who is an accused in the Punjab National Bank (PNB) fraud case, to give a “letter of authority” to CBI to access and probe his offshore bank accounts.
The top court was hearing a CBI plea, filed through its Director, Banking Securities Fraud Branch, Mumbai, challenging the August 23, 2022 order of the Bombay High Court which had allowed Mehta to travel to Hong Kong and stay there for three months.
The central probe agency has alleged Mehta received a large sum of money siphoned off in the PNB fraud scam and transferred them to his and his wife’s offshore bank accounts.
Mehta is a British national who lives in Hong Kong with his family and had come to India on September 8, 2021 for appearing in a Mumbai court.
“What we suggest to you (counsel for Mehta) is that you give the letter of authority to an official designated by the CBI for accessing the bank details. The matter ends. Or, we will hear the SLP (special leave petition) of CBI dispassionately and decide it,” the CJI said.
“Are you willing to give the letter of authority? What we suggest is… either you accede to the request and give the letter of Authority to CBI. Alternatively, we will hear the matter,” the bench said.
It then listed the matter for hearing on February 9.
At the outset, Additional Solicitor General SV Raju, appearing for the CBI, apprised the bench about the developments so far in the case.
“The situation is, last time, I requested my learned friend (counsel for Mehta) to give us a letter of authority. It was refused. That is why we had to get letters rogatory (LRs) issued. No response on LR has been received. We have written to the embassy (in Singapore) to pursue it,” the law officer said.
“We apprehend that a huge amount of money has gone into those accounts. He is not giving us access to the account. He is a foreign national. His wife is a Belgian national. Once he leaves, he will not come back,” he said.
Senior advocate Amit Desai, appearing for Mehta, referred to records to say that he has been cooperating in the probe and was made an approver by the Enforcement Directorate in a money laundering case arising out of the PNB case.
” I have been in India and away from home for a long. False allegations are made by the CBI. We have always co-operated. We have done everything. We are willing to give the letter of authority but then I will have to stay in India for another year.
“The ED has said I am not a flight risk. I am only saying let me go for some time, I will come when needed. Travel application has become an investigation,” Desai said.
The senior lawyer said that he should be at least permitted to take part in an important business meeting in Dubai which is happening for the first time post-COVID-19.
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The bench, which seemed unconvinced, said that allowing Mehta to travel abroad would mean the dismissal of CBI’s appeal without a hearing.
“Once we do that, we are dismissing the SLP of CBI without hearing the matter. That cannot work,” the CJI said, adding that the court cannot compel Mehta to give the letter of authority to the CBI.
“We will allow you to reflect on our suggestion to give the letter to the CBI. Take it from us that if you do not give it, we will not hold it against you,” the bench said while adjourning the hearing.
Earlier, the top court had said that it will hear on January 31 the CBI’s plea challenging the Bombay High Court order allowing Mehta to visit Hong Kong.
The bench was informed by Mehta’s lawyer that the letters rogatory (LR) to a Singapore court for obtaining evidence against Mehta were issued.
Prior to this, the CBI had informed about the Union home ministry granting the sanction to move the special CBI court in Mumbai for issuance of LR to a Singapore court for obtaining evidence against Mehta.
Letters Rogatory is a document making a request through a foreign court to obtain evidence from a person living under the territorial jurisdiction of the requested court within the ambit of the Mutual Legal Assistance Treaty (MLAT) and on the basis of reciprocity if no such treaty exists.
The CBI has said Mehta is related to Nirav Modi, an accused in the multi-crore rupees PNB case, and he has not cooperated fully in the probe.
The CBI had flagged issues with regard to non-disclosure by Mehta of transactions in bank accounts, including the one based in Singapore, and two transactions of USD 8.9 million and USD 1.8 million transferred by Modi’s father.
The probe agency had said Mehta should share the details with it after which he might be considered for travelling abroad.
It has alleged an amount of USD 30 million was sent by Modi, which was diverted by Mehta, and said it needs to know the details.
On August 23, 2022 the Bombay High Court dismissed the CBI’s plea against an order of a special court dealing with cases lodged under the Prevention of Money Laundering Act (PMLA) that allowed Mehta to travel to Hong Kong. The CBI wanted a stay on the PMLA court order.
The CBI had submitted in the high court that Mehta was not named as an accused in the case and his role in the PNB scam was yet to be ascertained for which he needed to be interrogated.