The Enforcement Directorate’s plea to declare Mehul Choksi a Fugitive Economic Offender has been pending in a Mumbai court for seven years. The prolonged delay has stalled crucial proceedings in the high-profile bank fraud case.
Fugitive businessman Mehul Choksi, one of the main accused in the Rs 13,000 crore Punjab National Bank (PNB) loan fraud case, has been arrested in Belgium following a formal extradition request made by Indian investigation agencies, according to official sources on Monday. However, despite his arrest, the Enforcement Directorate’s (ED) application to declare him a Fugitive Economic Offender (FEO) has been pending in a Mumbai court for almost seven years.
Choksi, aged 65, and his nephew Nirav Modi are the prime accused in the massive loan scam that rocked India’s banking sector. The ED had filed the application in July 2018, under the provisions of the Fugitive Economic Offenders Act, to label Choksi an FEO and confiscate his properties.
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Unfortunately, the case has seen frequent delays. These delays are mainly due to several legal applications filed by Choksi in both the PMLA court and the Bombay High Court, where he alleged procedural lapses in ED’s plea.
An ED officer expressed frustration over the prolonged delay and said,
“The court is kept busy with frivolous applications, and hearing on our application to declare him (Choksi) an FEO has been adjourned for the past seven years.”
He further added,
“The court should have continued the hearing and taken a decision on the future course of action once the application was moved.”
The officer urged the court not to entertain repetitive applications, stating that they are only meant to stall the proceedings.
Meanwhile, Choksi’s lawyer informed the court that Choksi was undergoing treatment for suspected cancer in Belgium and that he would soon file an application related to his health condition.
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According to the Fugitive Economic Offenders Act, a person can be declared an FEO if a warrant is issued against them for an economic offence involving over Rs 100 crore, and if the person has left India and refuses to return. Once declared an FEO, the investigating agency is empowered to seize their properties.
Choksi had also approached the Bombay High Court, alleging that the ED did not follow proper procedures before filing its FEO application, and thus, the plea was invalid.
He claimed that the agency’s application “had not followed proper procedure before filing the application and, hence, it stands vitiated.”
However, in September 2023, the High Court rejected Choksi’s plea, ruling that the ED had followed the prescribed format as required under the FEO Act. The court also lifted a stay order, allowing the special court to resume proceedings.
Still, the special court could not start the final hearing, as Choksi continued to file new applications through his lawyers. Although most of these applications were dismissed, a few remain under consideration. His latest attempt was to recall the notice issued on ED’s FEO plea, which was also dismissed in December 2023.
As per the ED, Choksi left India under suspicious circumstances in early January 2018. Choksi’s lawyer countered this by stating that ED kept changing its reasons for declaring him an FEO and claimed that suspension of his Indian passport made it impossible for him to come back for questioning.
However, the court did not accept this argument and said the notice was served correctly, and it was not based on “wrong facts or mistaken assumptions.”
Meanwhile, Nirav Modi, Choksi’s nephew and co-accused, has already been declared an FEO by the special court. He has been in custody in London since 2019.
Choksi was finally arrested in Belgium on Saturday, based on the extradition request submitted by the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).
He had been staying in Antigua since 2018, after fleeing India, but last year moved to Belgium, citing medical reasons. As per Indian authorities, his arrest marks an important step forward, but the delay in his legal proceedings continues to block the declaration of FEO status by the Mumbai court.
The case highlights the legal hurdles Indian agencies face in pursuing economic offenders abroad, especially when procedural objections and medical grounds are used to delay justice.