Mumbai Special CBI Court Rejects Mehul Choksi’s Plea, Upholds Summons In ₹55 Crore Bank Loan Fraud Case

Mumbai, Feb 06: The special CBI court has rejected the revision petitions filed by diamantaire Mehul Choksi and senior executives of his company, the Gitanjali Group, challenging the summons issued by the magistrate court after it took cognisance of the CBI’s chargesheet in a Rs 55 crore bank loan fraud case.

Court finds no illegality in summons

The court dismissed two separate applications filed by Choksi and Aniyath Shivraman Nair, and another by Vipul Chitalia. The accused had challenged the manner in which the summons were issued, alleging that the magistrate court had passed the order mechanically.

Rejecting the plea, the special CBI court observed that there was no illegality in the magistrate court’s order and no need for interference with the summons issued in April last year.

Details of CBI case

The CBI registered the case in July 2022 against M/s Bezel Jewelry (India) Pvt. Ltd., Mehul Choksi, who was the whole-time director and promoter, and full-time directors Chetna Jhaveri, Dinesh Bhatia and Milind Limaye, along with unknown public servants. In December 2024, the agency filed a chargesheet against the firm and its directors, dropping corruption charges after not naming any public officials.

Allegations of bank loan diversion

The case was based on a complaint by the chief general manager of Canara Bank’s Circle Office in Mumbai, alleging that Bezel Jewelry cheated Canara Bank and Bank of Maharashtra of Rs 55.27 crore in connection with working capital facilities sanctioned under a consortium arrangement.

According to the complaint, Canara Bank’s Girgaum branch sanctioned Bezel Jewelry a fund-based OCC/ODBD limit of Rs 10 crore and a non-fund-based sub-limit of Rs 20 crore. The firm availed a fund-based limit of Rs 30 crore, while Bank of Maharashtra sanctioned Rs 25 crore.

CBI findings

The CBI alleged that in its first year, Bezel Jewelry repaid long-term borrowings of Rs 18 crore to its parent company, M/s Gitanjali Gems Ltd., diverting the working capital limit. It claimed that the entire Rs 10 crore sanctioned by Canara Bank was transferred to Gitanjali Gems Ltd. on February 28, 2013, the same day the credit facilities were availed.

The probe further revealed that Bezel Jewelry obtained a Rs 20 crore bank guarantee from Canara Bank to secure a gold loan from HDFC Bank, but failed to provide transaction details. Though the loan was sanctioned for the manufacturing and sale of gold and diamond-studded jewellery, no business transactions were routed through the Canara Bank account.

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The agency alleged that the firm and its directors diverted the entire foreign remittance received from exports of plain jewellery manufactured using gold purchased under the Gold Metal Loan from HDFC Bank. The remittance was allegedly used to reduce overdrawing in the cash credit accounts of M/s Gitanjali Gems Ltd. and M/s Gitanjali Exports Corporation Ltd.

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