Mumbai Court Approves Auction of Mehul Choksi's Properties Worth Rs 46 Crore in PNB Fraud Case

The Mumbai special court has explicitly stated that only unsecured assets will be included in the auction proceedings.

New Delhi:

A Mumbai special court has granted permission for Gitanjali Gems Ltd to evaluate and auction 13 unsecured properties connected to fugitive businessman Mehul Choksi. This company stands at the epicenter of the Rs 23,000 crore Punjab National Bank (PNB) fraud investigation. The court has mandated that auction proceeds be maintained as fixed deposits under the special court's name.

According to the November 4 order, these 13 properties, comprising flats and gems, are estimated at approximately Rs 46 crore in value.

The assets include four residential flats in Borivali valued at roughly Rs 2.6 crore, a commercial unit with 14 parking spaces in Bandra-Kurla Complex's Bharat Diamond Bourse worth about Rs 19.7 crore, six industrial galas in Goregaon East, and an additional gala in Goregaon's Udyog Nagar. The auction will also include silver bricks, semi-precious stones, and machinery from the company's Jaipur facility. These asset valuations date back to 2018.

The court order specifically emphasized that only unsecured assets will be auctioned, not those claimed by secured creditors. Additionally, it noted that final determination of ownership and confiscation of proceeds will occur only after trial completion.

The order states: "The applicants and the Liquidators, as the case may be, shall be allowed to open fixed deposit ("FDs") with ICICI Bank (being the lead bank for GGL Consortium and NWL Consortium) with respect to sale proceeds from sale of assets. The sale proceeds shall be deposited as FDs (in the manner mentioned above) after deducting all associated costs and expenses incurred for purpose of carrying out valuation/auction. The sale proceeds deposited in form of FDs will be in favour of this Court."

Gitanjali Gems features prominently in the Enforcement Directorate's investigation into the Punjab National Bank fraud case, where Choksi has been officially designated as a fugitive economic offender.

Last month, a Belgian court approved Choksi's extradition to India, ruling that no legal impediments exist and the charges against him are "serious enough to justify it." The court's decision noted that Choksi is not a Belgian citizen but a foreign national. It also observed that Choksi's alleged role in the offenses may involve participation in a criminal gang, fraud, corruption, and forged document usage - all considered serious crimes. However, the court clarified that one specific charge from India - destruction of evidence (IPC Section 201) - is not recognized under Belgian law, thus extradition cannot be granted for that particular count.

Earlier this week, Choksi challenged this ruling before Belgium's Supreme Court.