Financial Fugitives & Where To Find Them: NCLT Orders Liquidation Of Gitanjali Gems As Extradition Challenges Continue

Financial Fugitives & Where To Find Them: NCLT Orders Liquidation Of Gitanjali Gems As Extradition Challenges Continue

NCLT recently ordered the liquidation of the Gitanjali Gems, the other infamous defrauders including Vijay Mallya, Nirav Modi and Lalit Modi still remain away from justice

Juviraj AnchilUpdated: Friday, February 09, 2024, 11:34 AM IST
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The Challenges facing the Indian Paradigm |

The story of financial fugitives and the socio-political and economic impact that they have on the landscape of India discourse in the past decade and a half is immense.

NCLT Order Liquidation of Gitanjali Gems

Recently, the National Company Law Tribunal (NCLT) ordered the liquidation of Gitanjali Gems of the infamous financial fugitive, Mehul Choksi. It was in 2018 that the Punjab National Bank, a PSB, filed a case against Mehul Choksi. But how far along have the law enforcement authorities come to bringing these individuals to justice, is question, that does not find a straightforward response in the aforementioned development. Along with Choksi, his relative, Nirav Modi, the owner another gems trading brand was also taken to the court for alleged fraud, collectively they are accused of defrauding the public sector bank of a whopping Rs 14,357 crore.

The Merchants of Debt

In the past few years both these individuals have made headlines frequently for how far they are from facing the law in India. Both, fled the country, just before the dirty laundry was aired. Both have tried to take shelter in countries, that has offered them a place in their territory for pecuniary input into their states. The other prime characters of discrepancy that have appeared in the past decade and a half, and have garnered significant traction would be the likes of Vijay Mallya and Lalit Modi. Mallya, the self-proclaimed 'King of Good Times', who apart from being a liquor-baron, also chartered a chapter in the aviation history of the country, with his Kingfisher Airlines, whose fortune took a nosedive in 2012. Mallya, who allegedly swindled multiple banks of around Rs 9,000 crore, fled the country in anticipation of action in 2016. Lalit Modi on the other hand, with charisma, was deemed by many as the Czar of the ultra-lucrative league, IPL. Unironically, just like the last Czar, his fortunes also crumbled, only Modi fled in the country in 2010.

Amongst the infamous-four, Nirav Modi, Lalit Modi and Vijay Mallya, apart form their lavish holidays elsewhere, are said to be hiding from law (Indian justice system) in the United Kingdom, Mehul Choksi on the other hand, had fled to Antigua and Barbuda in 2018. He was later arrested in Dominica in May 2021 while trying to escape to Cuba.

The Extent of Justice and Jurisdiction

In all these cases extradition and the subsequent imposition legal proceedings has come to pass at a sluggish pace. Despite frequent setbacks in the London court, Mallya still remains away expressing displeasure in the Indian prison system through his lawyer.

Nirav Modi, was refused permission to appeal his extradition at the Supreme Court in December 2022, a ruling which should have resulted in his extradition within 28 days of that date, but Modi still remains, not in India. When it comes to Lalit Modi, attempts to bring him to justice, have also yielded limited results, as the Indian request to issue a Red Corner Notice, a request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender, or similar legal action, on the basis of 'insufficient juridical data'.

Actions Beyond Undone Extradition

When it comes to actions outside of the paradigm of transferring these besmirched men to India, the India authorities like in the cases Choksi, have taken steps to recover the resources of the public exchequer. In 2021, the enforcement directorate attached properties of Lalit Modi in Haryana. In 2015, the ED again tried to tighten the screws on Modi, by adding Foreign Exchange Management Act to attach more of his properties. Before the recent action on Choksi's Gitanjali Gems, another entity of his was also liquidated.

In all the punitive action of absorbing assets of these names has resulted in the accrual of assets worth over Rs 19,000 crore, belonging to financial Vijay Mallya, Nirav Modi and Mehul Choksi, have been seized so far, until 2022.

The question that is often invoked, revolves around the efficacy of these moves in serving justice, and in itself, even recovering the resources that were taken from Banks, including many government owned banks. It has also raised question on the functioning of the systems in place, including, if not particularly of that, of banks. The Insolvency and Bankruptcy code tries to address a lot of the problems, the rationale in the rectitude of banks, when it comes to treating debt from major corporation still leaves a many gaps to be filled.

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