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Supreme Court Overturns Gujarat High Court’s Decision, Revives Cheating Case Against Fugitive Mehul Choksi and Wife

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Published on: December 07, 2023 at 11:47 IST

The Supreme Court has nullified a 2017 Gujarat High Court ruling that dismissed an FIR filed by the Gujarat Police in 2015 against businessman Mehul Chinubhai Choksi.

Choksi, a fugitive who left India in 2017 following the PNB loan scam case, faced charges of criminal breach of trust, cheating, forgery, and criminal conspiracy.

The FIR was initiated by Ahmedabad Police based on a complaint by Digvijaysinh Himmatsinh Jadeja, who alleged that Choksi’s company failed to return gold bars worth Rs. 30 crores and misappropriated them in violation of their agreement. Choksi’s wife, Priti, was also implicated.

The Gujarat High Court had dismissed the FIR on the grounds that the complaint primarily constituted a civil breach of contract, and no criminal offense was established.

However, the Supreme Court reversed this decision, asserting that the High Court had exceeded its jurisdiction under Section 482 of the Code of Criminal Procedure by delving into factual controversies.

The Supreme Court emphasized that it is inappropriate for the High Court to examine and reach conclusions on disputed facts to quash an FIR.

The bench, consisting of Justices Sanjiv Khanna and SVN Bhatti, noted that while a wrong may be a civil wrong, it could also concurrently constitute a criminal offense.

The Court highlighted the disputed nature of the facts related to Choksi’s contention that the agreements were not binding on his company, Geetanjali Jewellery Retail Limited (GJRL).

The Court refrained from delving into these disputed aspects, asserting that the nature and character of the deposit and other factual details need to be ascertained through investigation.

Additionally, the Supreme Court expressed reservations about certain observations made by the Gujarat High Court regarding vicarious liability for Priti Mehul Choksi.

The Court clarified that these were general observations and that the specific role of Priti Mehul Choksi should be determined only after an investigation.

Consequently, the Supreme Court set aside the impugned order, directing the continuation of the investigation without being influenced by previous rulings. The Court emphasized that its observations in the current order should not be considered as a judgment on the case’s merits.