The Bombay High Court on Thursday granted bail to Vipul Chitalia, former vice president (banking operations) of Mehul Choksi promoted Gitanjali Group of Companies and an accused in the multi crore Punjab National Bank (PNB) scam.
Justice Bharati Dangre granted bail to Chitalia four and a half years after he was arrested in the scam in March 2018 under various sections of the Indian Penal Code sections related to criminal conspiracy, cheating and fraud and also under the Prevention of Corruption Act.
He approached the HC after the special court rejected his bail plea on December 4, 2020.
Chitalia’s counsels – Vijay Aggarwal and Rahul Aggarwal – pointed out that he had been in custody since long. They contended that the CBI still hadn't completed its investigation and charges were yet to be framed. Only recently the CBI filed a 47-thousand page supplementary charge sheet and said it intend to continue investigation.
Special Public Prosecutor Hiten Venegavkar for CBI opposed the plea contending that he was the "mastermind" for putting through fraudulent transactions along with Choksi and who knew about the fraud since the very beginning. Also, he was one of the two authorised signatories of the group for the issuance of applications for Letters of Undertaking (LoU) from the banks the agency said. An LoU is a bank guarantee under which a bank can allow its customer to raise money from another, typically overseas bank.
To this, Aggarwal argued that Chitalia's co-accused, who signed the LOUs with him was granted bail soon after the first charge sheet was filed in the case.
Choksi in connivance with some bank officials, are accused of duping PNB of over Rs 12,000 crore by obtaining LoUs fraudulently. According to the CBI chargesheet, Gokulnath Shetty, the then deputy manager of PNB's Brady House branch, who is one of the prime accused in the case, received a bribe of Rs 1.02 crore from Choksi's companies to clear 58 fake foreign letters of credit (FLCs) and 142 fake letters of undertaking (LOUs).
The CBI arrested Chitalia in March 2018 alleging that he was responsible for handling unauthorised Letters of Undertaking (LoUs) and foreign Letters of Credit (FLCs) and maintaining contact with the bank officials.