One More Fraud by Mehul Choksi in Banks, Warrant issued against Rs.55 crore Fraud in Canara Bank and BOM

Mehul Choksi has been detained in Belgium and India is trying its best to bring him back. But Will India be able to bring him back? Mehul Choksi’s lawyers have said that he is suffering from Blood Cancer and is undergoing treatment.

He is involved in one of India’s largest banking frauds—the Punjab National Bank (PNB) scam, involving approximately ₹13,850 crore (about $1.8 billion). In January 2018, just before the scam became public, Choksi left India and obtained citizenship in Antigua. Now he has been detained in Belgium and India is trying to bring him back so that the justice can be served.

Amid this, a local court in Mumbai—Esplanade Metropolitan Magistrate Court—has issued a non-bailable warrant (NBW) against fugitive diamond businessman Mehul Choksi. The warrant has been issued in connection with a bank fraud case from 2022, where Choksi and others are accused of cheating Canara Bank and Bank of Maharashtra of around ₹55.27 crore. Let’s understand more about this.

CBI Requested the Warrant

The warrant was issued after a formal request from the Central Bureau of Investigation (CBI), which is looking into the case. The CBI had filed an FIR (First Information Report) in July 2022 after Canara Bank’s Chief General Manager submitted a complaint.

According to the FIR, the fraud was committed through a company called Bezel Jewellery (India) Private Limited. Mehul Choksi, along with other company directors—Chetna Jayantilal Jhaveri, Dinesh Gopaldas Bhatia, and Milind Anant Limaye—have been named in the case. They are accused of cheating the banks and illegally diverting bank funds for purposes not related to the actual business.

Case Transferred to Magistrate Court

On April 17, the CBI court transferred the case to the magistrate’s court. The reason was that no public servant was named in the CBI chargesheet, so the case did not fall under the Prevention of Corruption Act, which deals with cases involving government officials.

Just two days later, on April 19, the Additional Chief Judicial Magistrate issued the non-bailable warrant against Mehul Choksi. This move came soon after reports emerged that Choksi had been caught in Belgium.

How the Alleged Fraud Happened

As per the CBI investigation, both Canara Bank and Bank of Maharashtra had approved working capital loans for Bezel Jewellery. Canara Bank sanctioned ₹30 crore and Bank of Maharashtra gave ₹25 crore.

These loans were given under a consortium lending arrangement, with the intention that the funds would be used for manufacturing and selling gold and diamond jewellery. However, the company allegedly misused the loan funds for other purposes.

The chargesheet states that:

• The company used the money to repay long-term debts instead of investing it in the jewellery business.
• Foreign remittances earned through jewellery exports were not used as promised. Instead, they were transferred to Gitanjali Gems Pvt Ltd, another company owned by Mehul Choksi.
• On the same day the loan was received, Bezel Jewellery transferred ₹10 crore from Canara Bank to its parent company to repay old debts.
• The company did not carry out any real business activities using the Canara Bank account, despite the loan being issued specifically for that purpose.

This case highlights how financial fraud involving big companies and banks can go unnoticed for a long time. With the court now issuing a non-bailable warrant, Mehul Choksi could face serious legal action once extradited. Let’s see what happens next. The PNB Fraud case is still pending for several years and need to be finalized. The public money has not been returned to the exchequer and has caused a significant loss for the Bank and the nation.