Introduction
In a significant development in one of India’s most high-profile financial fraud cases, Mehul Choksi has been arrested in Belgium, reigniting global attention on the long-standing legal battle surrounding the fugitive diamantaire. The news of “Mehul Choksi arrested in Belgium and extradition request by India” has sent ripples through both diplomatic and judicial circles, as India intensifies efforts to bring him back to face justice. With charges linked to the ₹13,000 crore Punjab National Bank scam, Choksi’s capture marks a pivotal moment in the ongoing pursuit of accountability and justice in economic offenses.
In this blog post, we’ll explore the key provisions of the Mehul Choksi Areested in Belgium.
Context
- Mehul Choksi, the fugitive diamond trader wanted in India for the Rs 13,000 crore Punjab National Bank (PNB) loan fraud case, has been arrested in Belgium after India made an extradition request.
- Choksi had taken the citizenship of Antigua and Barbuda and fled India just before an FIR was registered in the PNB scam.
- Accusation against Mehul Choksi
- Letter of Undertaking
- Fugitive Economic Offenders Act
- Extradition Treaty with Belgium
- Difference between Extradition Treaty and Arrangement.
- Features of Extradition Treaty with Belgium
- Mutual Legal Assistance Treaty
- Hurdles in Bringing Choksi back
Accusation against Mehul Choksi
- He is facing criminal proceedings by both CBI and Enforcement Directorate (ED).
- The CBI had first named Choksi and his firms, including Gitanjali Gems, in 2018, based on a complaint received by Punjab National Bank (PNB) for alleged issuance of fraudulent Letters of Undertaking in their favor causing losses to the bank.
- The ED subsequently filed a complaint alleging that Choksi and others were involved in money-laundering the proceeds of crime in overseas accounts.
- Choksi has been booked under the Prevention of Money Laundering Act and other sections pertaining to cheating,criminal conspiracy of the Indian Penal Code and relevant sections of the Prevention of Corruption Act.
- The ED filed a plea in 2018 under the Fugitive Economic Offenders Act against Choksi, which is yet to be decided. If Choksi is declared a fugitive economic offender and does not return to India, his properties can be confiscated even before the trial against him begins.
Letter of Undertaking
- LoUs are used in international banking transactions.
- LoU is a bank guarantee under which a bank allows its customer to raise money from another Indian bank’s foreign branch in the form of short-term credit.
- The loan is used to make payment to the customer’s offshore suppliers in foreign currency.
- The overseas bank usually lends to the importer based on the LoU issued by the importer’s bank.
- The messages are sent through SWIFT — an inter-bank messaging network for securely transmitting instructions for financial transactions.
- An LoU involves four parties — an issuing bank, a receiving bank, an importer and a beneficiary entity overseas.
Fugitive Economic Offenders Act
- The ED filed a plea in 2018 under the Fugitive Economic Offenders Act against Choksi, which is yet to be decided.
About Fugitive Economic Offenders Act 2018
- Defined Fugitive Economic Offender as an individual against whom a warrant of arrest in relation to scheduled offence has been issued by any court in India and who has left the country so as to avoid criminal prosecution; or the FEO abroad, refuses to return to face criminal prosecution.
- Procedure to be followed: The investigating agencies have to file an application in a Special Court under the Prevention of Money-Laundering Act containing details of the properties to be confiscated, and any information about the person’s whereabouts.
- The Special Court will issue a notice for the person to appear at a specified place and date at least six weeks from the issue of notice.
- If the person appears: Proceedings will be terminated if the person appears.
- If the person does not appear: If not, the person would be declared as a Fugitive Economic Offender based on the evidence filed by the investigating agencies.
Extradition Treaty
- According to MEA website (www.mea.gov.in) (accessed on 15th April 2025)
- India is having Extradition Treaty with 48 countries while extradition arrangements with 12 countries.
Difference between Extradition Treaty and
Arrangement.
- An extradition treaty is a formal, binding written agreement between two countries outlining the conditions for surrendering individuals to each other for prosecution or punishment.
- An extradition arrangement, on the other hand, is a less formal agreement, often based on reciprocity, allowing for extradition in the absence of a treaty, typically within the framework of an international convention.
| Parameters | Extradition Treaty | Extradition Arrangement |
| 1. Formality | Treaties are formal and written agreements signed and ratified by both governments. | Arrangements are less formal and may rely on existing international conventions or reciprocity. |
| 2. Binding Nature | Treaties are legally binding, | Arrangements may be less binding and depend on the specific terms agreed upon |
| 3. Scope | Treaties often have a broader scope,covering a wider range of extraditable offenses. | Arrangements may be more limited |
Features of Extradition Treaty with Belgium
- It was signed way back in 1901.
- The treaty allows extradition on the basis of “dual criminality”, including for financial crimes.
- Dual criminality essentially means that an individual can be extradited only if her offence is punishable in both jurisdictions involved.
- The treaty, however, prohibits extradition for offences of political nature or in cases where the individual in question can prove she is being prosecuted in the requesting country for political reasons.
- It also says that the fugitive arrested shall be released if the requesting country fails to present evidence of culpability within two months.
- In 2020, India and Belgium signed the Mutual Legal Assistance Treaty for better cooperation.
Mutual Legal Assistance Treaty
- A Mutual Legal Assistance Treaty (MLAT) is a bilateral or multilateral agreement between countries that facilitates cooperation in criminal matters, allowing for the exchange of evidence, information, and judicial processes.
- The Ministry of Home Affairs (MHA) is the central authority in India for dealing with requests for mutual legal assistance in criminal matters.
Hurdles in Bringing Choksi back
- Extraditions is typically lengthy legal process in Europe.
- Choksi’s lawyers will most certainly bring up a botched attempt to bring him to India from Dominica in 2021.
- They are likely to also raise allegations of human rights violations and poor prison conditions in the country, as well as Choksi’s ill health to oppose extradition.
- Finally, Choksi being an Antiguan citizen could significantly complicate the legal process to bring him to India from Belgium.
Conclusion
Mehul Choksi’s arrest in Belgium and India’s swift extradition request mark a crucial step toward justice in the PNB scam case. As legal proceedings unfold, all eyes are on whether he will finally be brought back to face the law.
