Mumbai Special Court Dismisses Mehul Choksi's Asset-Related Applications
A special court in Mumbai on Saturday firmly rejected two separate legal pleas filed by absconding accused Mehul Choksi, who sought to direct the Enforcement Directorate (ED) to recover trade receivables and conduct a revaluation of seized assets. The court's decisions underscore the legal boundaries surrounding investigation procedures and highlight the prosecution's arguments that Choksi is attempting to manipulate the judicial process while remaining overseas.
First Application: Request for Recovery of Trade Receivables
In the initial matter, Mehul Choksi had formally requested that the ED be directed to recover and secure assets belonging to Gitanjali Gems Ltd, which included substantial trade receivables. Choksi claimed that the company possessed assets valued at over Rs 23,000 crore, arguing that these should be accounted for and managed by the federal agency. However, the prosecution strongly opposed this plea, contending that Choksi was abusing the legal process to deliberately delay the ongoing trial from his location abroad.
Dismissing the application, Special Judge AV Gujarathi made a critical observation regarding the legal framework. The judge stated, "There is no provision in the Criminal Procedure Code (CrPC) that grants an accused the right to direct an investigating agency to conduct an investigation in a specific manner, especially after a chargesheet has been filed in court." The order further elaborated, "By no stretch of imagination can an accused, after the filing of a chargesheet, submit an application seeking directions for the investigating officer to handle the investigation in a particular way."
The court concurred with the prosecution's stance, noting that Choksi was essentially attempting to utilize a federal agency to recover his own outstanding business dues, a move deemed legally impermissible under existing statutes.
Second Application: Plea for Revaluation of Seized Assets
In a second order issued on the same day, the special court dismissed Choksi's plea for the revaluation of seized jewellery and a specific property located in Andhra Pradesh. Choksi had alleged that the ED's valuation of the Hardware Park property at Rs 500 crore was arbitrary and inconsistent, claiming its actual market value exceeded Rs 1,500 crore. Additionally, he expressed concerns that seized goods might have been tampered with due to discrepancies in valuation reports, particularly regarding the Hyderabad property.
Rejecting this application, the special court clarified the jurisdictional limits under the Prevention of Money Laundering Act (PMLA). The court emphasized that its powers to confiscate or release property are typically exercised only at the conclusion of a trial, not during its pendency. Specifically, the order stated, "The special court has no authority to issue orders directing the ED to revaluate assets seized while a trial is ongoing."
Furthermore, the court took judicial notice of a significant development: a liquidator had already been appointed for Gitanjali Gems Ltd in 2024. This appointment rendered Choksi's application non-maintainable, as the company's assets were under formal liquidation proceedings, thereby altering the legal context of the case.
Legal Implications and Broader Context
The court's rulings highlight several key legal principles in high-profile financial crime cases. First, they reinforce the procedural sanctity of investigations post-chargesheet filing, limiting accused individuals' ability to influence investigative directions. Second, they affirm the temporal limitations on judicial intervention in asset matters under PMLA, reserving significant actions for the trial's conclusion.
These decisions also reflect the ongoing challenges in prosecuting economic offenders who remain outside India's jurisdiction. By dismissing Choksi's applications, the court has signaled a firm stance against perceived tactics to obstruct or delay legal proceedings, aligning with broader efforts to expedite justice in complex money laundering cases.
The outcomes may set precedents for similar cases involving fugitive economic offenders, emphasizing the judiciary's role in balancing accused rights with procedural integrity and the public interest in swift trial resolutions.
