Is Mehul Choksi a free man now? Here's what Interpol's Red Notice withdrawal means

As per Interpol, a Red Notice (or a Red Corner Notice) is a request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender or similar legal action. The word 'provisional' is of utmost importance here. A Red Notice does not tantamount to an arrest warrant.

Member countries need to apply their own laws to decide whether or not to arrest the concerned person. The Red Notice list is updated regularly by the Interpol General Secretariat based on information provided by countries requesting the issuance and publication of such notices.

Mehul Choksi is one of the prime accused in the multi-crore Punjab National Bank scam. Choksi allegedly connived with bank officials to get fraudulent Letters of Undertaking and Foreign Letters of Credit issued to companies owned or controlled by him.

An LoU is a guarantee issued by a bank that allows the customer to raise short-term credit from a foreign branch of another Indian bank. If the client, for some reason, fails to repay the foreign bank, the liability falls on the guarantor bank.

In Choksi’s case, no securities were kept by the PNB before issuing LoUs either. Later, investigations revealed that these transactions were being carried out since 2011, but were not recorded in the bank’s Core Banking Software.

Nirav Modi, Choksi’s nephew and a diamond merchant himself, is also an accused in the case.

The scam was first unearthed on January 25, 2018, when the Punjab National Bank submitted a fraud report to the Reserve Bank of India. The first FIR in the case was filed by the CBI on January 31. Initially, PNB had complained that they had been defrauded to the tune of Rs 280 crore. But, by the time investigation got underway, the fraud amount had increased manifold.

Choksi had reportedly fled the country before the scam was uncovered. Over the last 5 years, the PNB scam has been the subject of a political slugfest between the BJP and opposition parties.

Multiple cases were filed against Choksi pertaining to loan fraud, cheating and financial misappropriation. As per data submitted by the Ministry of Finance in December 2021, Choksi topped the list of wilful defaulters in India, defaulting on loans to the tune of Rs 7,848 crore.

Mehul Choksi was added to Interpol’s Red List in December 2018 on CBI’s request. It had already been established by then that Choksi had set up a base in Antigua and Barbuda. Later, it was found that he had applied for citizenship in the Caribbean nation in May 2017. A press release by the Antiguan agency Citizenship by Investment Unit read:

"Mehul Choksi's application was received by the CIU in May 2017 with the necessary documentary requirements, including a police clearance certificate as required by section 5 (2)(b) of the Antigua and Barbuda Citizenship by Investment Act 2013."

Choksi had challenged the issuance of the Red Corner Notice (RCN), citing ‘human rights violation’. But the CBI had contested it.

Interpol is yet to make an official comment on the matter. However, news platforms, citing sources claim that Choksi’s allegations that an attempt had been made to kidnap him from Antigua in May 2021 and repatriated to India may have gone against the CBI.

The revocation of the RCN means that Choksi can travel to any other country, apart from India, where he faces multiple cases, at will. It effectively means, he is a free man, as long as he doesn’t set foot in India.

Definitely, an embarrassment for India’s premier investigative agency and they have much to answer for. The CBI functions under the Ministry of Personnel, Public Grievances and Pensions, one of the many portfolios held by Prime Minister Narendra Modi. Dr Jitendra Singh serves as the Minister of State in the PMO.

The CBI is its official response said that: "…based on mere imaginary conjunctures and unproven surmises, a five member CCF chamber, has taken a decision on deletion of Red Notice, communicated in November, 2022. Thereafter, CBI has taken up with CCF the serious shortcomings, procedural violations, over reach of mandate and mistakes committed by CCF in the manner of reaching this unfounded and perfunctory decision. CBI continues to exercise available remedial and appellate options within INTERPOL for rectification of this faulty decision and for restoration of Red Notice."

The CBI however said that it is pursuing the revision of the decision to revoke the withdrawal of the red notice against Mehul Choksi even as it clarified that the red notice was not necessary for the extradition of the fugitive diamantaire.

The Congress has tweeted on the matter. "PM (Prime Minister Narendra) Modi should answer that when will your 'Mehul Bhai' be brought back to the country," the party said.