Mumbai News

PNB fraud case: Bombay High Court grants bail to Gitanjali Group former vice-president Vipul Chitalia – The Indian Express

The Central Bureau of Investigation (CBI) arrested Chitalia in March 2018 and alleged that he was responsible for handling the unauthorised letters of undertaking (LoU) and foreign letters of credit (FLC), and maintaining contact with the bank officials.

Chitalia allegedly escaped to Dubai with Mehul Choksi in the first week of January 2018 before the matter was reported to the CBI. He returned to India when he was detained and arrested on March 6, 2018.

A single-judge bench of Justice Bharati H Dangre allowed the bail application of Chitalia argued through advocate Vijay Aggarwal seeking his release. Chitalia had cited a long incarceration period of over four-and-a-half years while seeking his release. He was booked under various provisions stipulating punishment for cheating, fraud and criminal conspiracy among others of Indian Penal Code (IPC) and Prevention of Corruption Act. Chitalia had moved the high court challenging a special court order rejecting his bail.

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However, advocate Hiten Venagaonkar for CBI opposed the plea and said that the applicant was the “mastermind” in fraudulent transactions along with Choksi and was in the know of the fraud since the beginning as he was one of the two authorised signatories of the group to issue applications for Letters of Understanding (LOUs).

An LoU is a guarantee which is given by an issuing bank to Indian banks having branches abroad to grant short-term credit to the applicant.

In June, this year, CBI submitted that the chargesheet and supplementary chargesheet were filed and the probe was still in progress. The Court had sought to know from the Investigating Officer “as to why it was taking so long for completion of investigation and despite one supplementary-charge sheet being filed, why he is desirous of filing a further chargesheet.” Venegaonkar justified CBI’s stand and said that further probe is required and the applicant should not be released on bail.

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Aggarwal argued that Chitalia’s co-accused who signed LOUs with him was granted bail soon after the first chargesheet was filed and the same be applied to the present applicant.

In August last year, a special CBI court granted temporary bail to Chitalia to attend the pre-marriage ceremony of his daughter. Earlier this year, Bombay High Court granted Chitalia temporary bail from April 6 to April 18 to attend his daughter’s marriage.

The Rs 12,636-crore fraud was allegedly perpetrated by billionaire jeweller Nirav Modi and his uncle Mehul Choksi, the promoter of Gitanjali Gems. It was alleged that Choksi and Modi got LoUs and FLCs of Rs 12,636 crore issued in favour of foreign branches of Indian banks based on fraudulent claims.

Source: https://indianexpress.com/article/cities/mumbai/pnb-fraud-case-gitanjali-group-vipul-chitalia-8084228/