The Bombay High Court (HC) has refused to entertain a petition filed by fugitive diamond trader Jatin R Mehta challenging provisions of the Fugitive Economic Offenders (FEO) Act, 2018, making it clear that constitutional remedies cannot be invoked by an accused who continues to remain outside the jurisdiction of Indian courts.
Following the Court’s observations, Mr Mehta formally withdrew his petition without arguments on the merits. Mr Mehta, who is accused of defrauding public sector banks (PSBs) of ₹4,627.24 crore, had approached the HC in 2022 through a power of attorney holder, while staying abroad.
A division bench of justice Bharati Dangre and justice Manjusha Deshpande indicated that it was not inclined to hear the plea in his absence, underlining that a person declared a fugitive economic offender cannot avoid Indian law enforcement while simultaneously seeking judicial relief.
“The issue is not representation, but the petitioner’s continued absence from the country,” the bench observed, signalling that courts would be reluctant to examine challenges to statutory provisions aimed at tackling economic fugitives when the accused refuses to submit to the legal process.
After the Court made its position clear, Mr Mehta’s counsel sought permission to withdraw the petition which was allowed.
The petition had initially been filed through Mr Mehta’s power of attorney holder, Shreya Sinha. Following her death, Mr Mehta’s legal team sought to substitute her with another authorised representative. However, the Court indicated that substitution would not cure the fundamental defect in the case — Mr Mehta’s decision to remain outside India while challenging the law.
The judges made it clear that a fugitive accused cannot dictate the terms of judicial scrutiny from abroad, particularly when the challenge relates to legislation designed to deal with economic offenders who evade the legal process.
The order reflects a consistent approach adopted by the Bombay High Court in recent months. In December, another division bench of the Court, led by chief justice Shree Chandrashekhar, had refused to hear liquor baron Vijay Mallya’s challenge to certain provisions of the FEO Act unless he personally appeared before the court.
In that case, the bench had told Mr Mallya’s counsel to first secure his client’s presence in India before seeking any adjudication on constitutional issues, making it clear that fugitives cannot seek favourable orders while remaining beyond the reach of Indian authorities.
Jatin Mehta and entities linked to him, including Winsome Diamonds and Jewellery Ltd and Forever Precious Jewellery and Diamonds Ltd are accused of orchestrating one of the major banking frauds in the diamond and jewellery sector. Several others, including Mr Mehta’s wife Sonia and son Suraj, are also named as accused.
Investigations into the alleged fraud began over a decade ago. Since March 2014, the bank securities and frauds cell (BSFC) of central bureau of investigation (CBI) has registered multiple first information reports (FIRs) against Mr Mehta, his companies and associated persons.
According to a CBI charge-sheet filed in June 2018, Mr Mehta allegedly floated several shell companies abroad, particularly in the UAE, and engaged in import-export transactions involving raw gold. The gold was purportedly imported into India, processed into coins and jewellery at manufacturing units in Chennai and Cochin, and sold in the domestic market.
While the actual import-to-sale cycle allegedly took just five to six days, investigators claim the companies availed credit facilities for periods extending up to 270 days. This, the prosecution says, enabled round-tripping of funds, inflation of turnover and the securing of enhanced working capital limits from banks.
The siphoned funds were allegedly routed through overseas entities and derivative trades, eventually reaching accounts controlled by Mr Mehta’s family members.
The alleged fraud is said to have caused losses of ₹4,627.24 crore to eight PSBs, with Punjab National Bank, Central Bank of India and Canara Bank among the worst hit.
The case has also drawn scrutiny overseas. In November 2022, the England and Wales High Court observed that there was 'strong' evidence of a 'major international fraud' in proceedings initiated by Standard Chartered Bank, which has alleged a fraud of about US$1bn (billion) involving the Winsome group.
The English court noted that funds advanced to the group were allegedly misappropriated, laundered and concealed through layers of corporate entities, with proceeds ultimately reaching companies owned or controlled by the Mehta family across multiple jurisdictions.
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continuing or withdrawing the petition doesn’t make any difference to JM, as he is already ring fenced as an asylum holder in UK.