Court rejects Mehul Choksi’s bid to stall fugitive offender proceedings in PNB fraud case

A special court has rejected Mehul Choksi’s plea to quash proceedings declaring him a Fugitive Economic Offender in the ₹13,000-crore PNB fraud case

PGurus Newsdesk

December 24, 2025

No escape from FEO proceedings in PNB scam

No relief for Mehul Choksi as court clears way for FEO proceedings

A special court has rejected absconding diamond trader Mehul Choksi’s attempt to derail proceedings to declare him a Fugitive Economic Offender (FEO) in the multi-crore Punjab National Bank (PNB) fraud case, dealing a fresh blow to the businessman facing extradition.

The court dismissed Choksi’s application seeking to quash the Enforcement Directorate’s (ED) plea under the Fugitive Economic Offenders Act, ruling that an ongoing investigation by the Serious Fraud Investigation Office (SFIO) does not bar parallel proceedings under other laws.

This was Choksi’s second attempt to stall the FEO process. A similar plea—filed after his arrest in Belgium and the initiation of extradition proceedings by Indian authorities—had already been rejected by a special court under the Prevention of Money Laundering Act (PMLA) in November.

In his fresh application, Choksi argued that Section 212(2) of the Companies Act prevents the ED from continuing its case while the SFIO is investigating the same set of allegations. He sought dismissal of the ED’s application on this ground.

The Enforcement Directorate, represented by special public prosecutor Kavita Patil, countered the claim, stating that the bar under the Companies Act applies only to offences under that Act. There is no legal prohibition on proceedings under other statutes such as the FEO Act, she argued.

Patil further submitted that since Choksi had not challenged the November order before a higher court, it had attained finality. The fresh plea, she contended, was nothing more than a delaying tactic.

Agreeing with the ED’s submissions, Judge A V Gujarathi ruled that the SFIO investigation “would not be a stumbling block” for proceeding with the ED’s application under the Fugitive Economic Offenders Act. The court rejected Choksi’s plea in its entirety.

Under the FEO Act, a person can be declared a fugitive economic offender if a warrant has been issued for an offence involving ₹100 crore or more and the accused has left India and refuses to return. Once declared an FEO, authorities are empowered to confiscate the offender’s properties.

Mehul Choksi and his nephew Nirav Modi are the prime accused in the ₹13,000-crore PNB scam, which is being investigated by both the Central Bureau of Investigation (CBI) and the Enforcement Directorate. They are accused of siphoning off funds using fraudulent Letters of Undertaking and foreign letters of credit by bribing officials at PNB’s Brady House branch in Mumbai.

While Choksi is currently facing extradition proceedings abroad, Nirav Modi remains lodged in a London jail.

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