Nirav Modi fraud case transferred to magistrate's court

A special CBI court here on Thursday transferred an alleged fraud case against absconding diamond businessman Nirav Modi to the magistrate's court after the CBI stated that corruption charges could not be proved against officials of the Punjab National Bank.

This case against Modi, directors of firms linked to him, and unknown officials of the PNB was registered by the central agency following a complaint filed by the bank's Mumbai zonal office.

As per the complaint, the bank was cheated of Rs 321.88 crore as credit facilities given to Modi's firms were misused.

During an internal inquiry, the bank found circular transactions between Nirav Modi-promoted partnership firms, namely Solar Exports, Stellar diamonds and Diamond R US, and Modi-promoted Firestar International Ltd. (FIL) and Firestar Diamonds International Pvt Ltd (FDIPL), the complaint claimed.

The accused were initially booked under Sections 120-B (criminal conspiracy) read with 420 (cheating) of the Indian Penal Code (IPC), along with Section 13(2) of the Prevention of Corruption Act, 1988.

However, the CBI on Thursday told the court that a thorough investigation yielded no incriminating material under the Prevention of Corruption Act against either the PNB officials or private individuals.

Public Prosecutor Vikram Singh, representing the CBI, submitted that a charge-sheet will be filed only against private individuals, hence the case would fall outside the jurisdiction of the special CBI Court and must be tried by a Magistrate.

Special judge J P Darekar allowed the probe agency's plea for transfer of the case.

Absconding diamantaire Nirav Modi and his uncle Mehul Choksi are prime accused in the multi crore scam being probed by both the CBI and the Enforcement directorate.

They are accused of siphoning off over Rs 13,000 crore of public money from the PNB using Letters of Undertaking and foreign letters of credit (FLCs) by bribing officials of the bank's Brady House branch in Mumbai.

Choksi is facing extradition proceedings in a Belgian court, while Nirav Modi is lodged in a London prison.