Mumbai:
A special CBI court in Mumbai on Thursday transferred a fraud case involving fugitive diamond merchant Nirav Modi to a magistrate’s court after the Central Bureau of Investigation (CBI) informed the court that it could not establish corruption charges against officials of Punjab National Bank (PNB).
The case was originally registered by the CBI following a complaint from PNB’s Mumbai zonal office, which alleged that the bank had been defrauded of Rs 321.88 crore through the misuse of credit facilities extended to firms linked to Nirav Modi.
According to the complaint, an internal investigation by the bank uncovered a series of circular transactions involving partnership firms promoted by Nirav Modi, including Solar Exports, Stellar Diamonds and Diamond R US. These entities allegedly conducted transactions with Modi-controlled companies Firestar International Ltd. (FIL) and Firestar Diamonds International Pvt Ltd. (FDIPL).
The accused were initially booked under Sections 120-B (criminal conspiracy) and 420 (cheating) of the Indian Penal Code, along with provisions of the Prevention of Corruption Act, 1988.
However, during the hearing on Thursday, the CBI informed the court that its investigation had not uncovered any incriminating evidence against either Punjab National Bank officials or private individuals under the Prevention of Corruption Act.
Public Prosecutor Vikram Singh, appearing on behalf of the CBI, submitted that the agency would file its charge sheet only against private individuals. Since no public servants were being prosecuted under corruption laws, the matter would no longer fall within the jurisdiction of the special CBI court constituted to hear corruption-related cases.
Accepting the agency’s submission, Special Judge J.P. Darekar ordered the transfer of the case to a magistrate’s court for further proceedings.
Alleged Misuse Of Credit Facilities
The case centres on allegations that companies linked to Nirav Modi diverted and misused credit facilities sanctioned by Punjab National Bank. Investigators examined financial transactions among multiple firms promoted by the fugitive businessman, with the bank claiming the arrangements caused significant financial losses.
The matter is separate from the larger Punjab National Bank fraud case, which involves allegations of fraudulent Letters of Undertaking (LoUs) and foreign letters of credit issued by officials at PNB’s Brady House branch in Mumbai.
Nirav Modi And Mehul Choksi Remain Key Accused In PNB Scam
Nirav Modi and his uncle, Mehul Choksi, remain among the principal accused in the multi-crore Punjab National Bank scam being investigated by both the CBI and the Enforcement Directorate (ED).
The duo has been accused of siphoning off more than Rs 13,000 crore from the state-owned lender through fraudulent banking transactions allegedly facilitated by bribed bank officials.
While Mehul Choksi is currently facing extradition proceedings in Belgium, Nirav Modi remains lodged in a prison in London and continues to contest efforts to extradite him to India.
The transfer of the Rs 321.88 crore fraud case to a magistrate’s court marks a significant procedural development, as the prosecution will now proceed without any corruption-related charges against bank officials.