On Thursday, a District Judge at the Westminster Magistrates’ Court in London will deliver his order on the extradition to India of fugitive diamond trader Nirav Modi.
Case against Nirav Modi
Nirav Modi and his uncle Mehul Choksi are accused of routing transactions of about Rs 13,600 crore through fraudulent Letters of Undertaking (LoUs) of Punjab National Bank (PNB). Both men left India in the first week of January 2018, weeks before the scam was revealed.
The Enforcement Directorate (ED) has alleged that Nirav Modi diverted over Rs 4,000 crore of the Rs 6,519 crore outstanding fraudulent LoUs issued by PNB to his firms, through 15 “dummy companies” based in the UAE and Hong Kong. The agency has submitted to the UK court transcripts of Nirav Modi’s conversations that allegedly show he tampered with evidence and intimidated witnesses while facing investigations in India.
The Central Bureau of Investigation (CBI) has found that PNB officials had issued fraudulent LoUs to Nirav Modi’s firms since 2008.
Nirav Modi faces separate criminal proceedings in (i) a CBI case related to the alleged PNB-LoU fraud, and (ii) an ED case on the laundering of the proceeds of the alleged fraud at PNB. Based on the ED’s complaint, Nirav Modi is also facing charges of “causing” evidence-tampering and “criminal intimidation” of witnesses.
Nirav Modi’s defence
Nirav Modi has denied any wrongdoing. He has told the UK court that obtaining LoUs is standard practice for companies.
His lawyers have submitted legal opinion from retired High Court judges and legal experts in India, stating that the charge of cheating is not made out, as CBI has stated that PNB officials were “hand-in-glove” with Nirav Modi in issuing LoUs.
The lawyers have also submitted legal opinion on the issue of destruction of evidence and intimidation of witnesses by Nirav Modi.
As part of arguments against extradition, they have said that Nirav Modi suffers from severe depression.
Why verdict matters
Apart from giving the first order on the extradition of Nirav Modi, the court will also decide if he should be granted bail. Over the last two years, the Magistrates’ Court has rejected his application for bail five times, and the High Court has done the same twice.
Nirav Modi was arrested in March 2019, and he is currently lodged in Wandsworth prison in southwest London.
The order of the UK court on Nirav Modi’s extradition will be the first assessment of the allegations of fraud against him, and will test the quality of the evidence submitted by the CBI and the ED. The order will lay the foundation for the extradition battle in the UK between Nirav Modi and
Indian investigators who have been on his trail since February 2018, when the PNB scam came to light.
Options for Nirav Modi
If the Magistrates’ Court rules against Nirav Modi, the order will go to the office of the UK Home Secretary for approval. Home Secretary Priti Patel will then have two months to either approve Nirav Modi’s extradition, or turn down the request.
Subsequently, Nirav Modi can approach the High Court for permission to appeal against the order of the lower court. If the appeal is permitted, he can fight the case in the High Court.
However, even if the High Court approves his extradition, Nirav Modi can still file an application for asylum in the UK, like fugitive businessman Vijay Mallya has. That can delay the extradition to India indefinitely, as the UK considers the application.
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