Why in News?

Mehul Choksi, a key accused in the ₹13,500 crore Punjab National Bank fraud case, was arrested in Belgium.

India has requested his extradition for trial. Choksi had moved to Belgium last year for cancer treatment after living in Antigua and Barbuda as a citizen since 2018.

What’s in Today’s Article?

• Next in Mehul Choksi’s Case
• Hurdles India May Face in Extraditing Mehul Choksi
• Allegations Against Mehul Choksi

Next in Mehul Choksi’s Case

• Extradition Treaty with Belgium
  • India and Belgium have an extradition treaty dating back to 1901, which permits extradition based on dual criminality—the crime must be punishable in both countries.
  • The treaty excludes extradition for political offences or if the accused claims political persecution.
• Legal Timeframe
  • Belgium must receive evidence of Choksi’s culpability from India within two months, or he will be released.
• Agencies Involved
  • Choksi was arrested following requests by the CBI and ED. These agencies will now prepare a detailed legal case aligned with Belgian laws.
• Mutual Legal Assistance Treaty (2020)
  • India and Belgium signed this treaty to facilitate better cooperation in legal matters, including extraditions.
• Challenges Ahead
  • Despite the arrest, Choksi’s return to India may take a long time. European extradition processes are typically slow and complex.
• Past Precedents
  • India’s extradition efforts in Europe—like those involving Nirav Modi and Vijay Mallya in the UK—have faced prolonged delays, indicating that Choksi’s extradition may also be drawn out.

Hurdles India May Face in Extraditing Mehul Choksi

• 2021 Dominica Kidnapping Allegation
  • Choksi’s lawyers are expected to highlight the controversial 2021 incident where he was allegedly abducted from Antigua and taken to Dominica.
    • Photos showed him bruised and injured.
  • Indian officials had arrived in Dominica to bring him back, but the attempt failed amid allegations of abduction and coercion.
• Allegations of Forced Consent
  • Choksi’s legal team claims he was forced to sign a document consenting to return to India, which was meant to bypass legal protections he enjoyed as a citizen of Antigua.
  • His London-based lawyer argued this undermined his legal rights.
• Interpol Red Corner Notice Withdrawal
  • In 2023, Interpol withdrew its Red Corner Notice against Choksi, citing concerns over the alleged abduction and the risk of an unfair trial in India.
• Human Rights and Health Concerns
  • Choksi’s defence is likely to argue that poor prison conditions in India, possible human rights violations, and his deteriorating health make extradition unsafe and unjust.
• Complications Due to Antiguan Citizenship
  • Choksi’s status as a citizen of Antigua could further complicate the process, even though he is currently in Belgium.
  • His lawyers may argue that Belgium must consider his citizenship status in Antigua before approving extradition to a third country.

Allegations Against Mehul Choksi

• Expansion Through Gitanjali Group
  • Choksi, hailing from a family of diamantaires, expanded his business under the Gitanjali Group, opening luxury jewellery stores in India and abroad.
  • He, along with his nephew Nirav Modi, spent heavily on marketing, hiring international celebrities like Kate Winslet and Rosie Huntington-Whiteley.
• Fraudulent Use of Bank Credit
  • Between 2014 and 2017, Choksi and Modi allegedly colluded with officials at PNB’s Brady House branch in Mumbai to obtain fraudulent Letters of Undertaking (LoUs).
  • These were used to secure overseas credit, which funded their business operations and personal assets.
• LoU Misuse and Loan Defaults
  • LoUs were meant to be repaid within 90 days, but bank officials kept rolling them over with interest, maintaining liquidity for the duo while debt ballooned.
  • Eventually, PNB discovered the fraud and approached the CBI, by which time both had fled the country.
• Scale of the Scam
  • The total fraud amounted to over ₹13,500 crore, with Choksi alone accused of cheating the bank of more than ₹6,000 crore.
• ED Action and Fake Assets
  • The Enforcement Directorate attached Choksi’s assets, initially valued at over ₹5,000 crore.
  • However, lab tests showed many diamonds were fake.
  • The current estimated value of all his assets, including properties and investments, is around ₹2,500 crore.