In a Rs 22.5 crore bank fraud case brought by Industrial Finance Corporation of India (IFCI) Ltd. against Gitanjali Gems Ltd (GGL), of which Mehul Choksi was a director, a special trial court in Mumbai on Wednesday delayed proceedings before a magistrate. The decision was made in a revision application submitted by Vipul Chitalia, one of the co-accused.
Choksi allegedly approached the IFCI seeking financial assistance of Rs 25 crore, for which he pledged jewels valued at twice the loan amount after proper valuation by government-approved valuers.
The IFCI had filed a complaint with the Central Bureau of Investigation (CBI) Banking Securities Fraud Branch, Mumbai. When GGL began making payments defaults, the IFCI performed a new appraisal of the jewels that had been pledged in order to realize the security. It claimed that the value of the gems that had been pledged had decreased by 98%. The IFCI claimed that Choksi conspired with the valuers to exaggerate the valuation and that the diamonds promised were not genuine but rather poor-quality lab-created chemical vapour stones and other inferior colored stones, resulting in a wrongful loss of nearly $1 billion.
On April 30, 2022, the CBI filed a FIR under the Prevention of Corruption Act including accusations of fraud, criminal conspiracy, forgery, and cheating.In its charge sheet, which was presented to an additional chief metropolitan magistrate (ACCM) at Esplanade court in Mumbai on March 2, 2023, the CBI accused eight defendants, including GGL and Choksi, of defrauding and criminal conspiracy. The ACMM took cognizance of the matter.
Then, Chitalia went to the sessions court with a review petition. His attorneys, Vijay Aggarwal and Abhiraj Ray, claimed that the magistrate had taken cognizance of the 11,000-page charge sheet “at lightning speed” without providing any justification.The attorney claimed that statutory Section 65B certificates required to demonstrate the validity of digital information had not been produced, creating concerns about the admissibility of evidence.
