Gujarat High Court refuses to quash case against Mehul Choksi, Gitanjali Gems directors in gold scheme fraud case

The Gujarat High Court on Wednesday refused to quash criminal proceedings initiated against fugitive diamantaire Mehul Choksi and the directors of Gitanjali Gems, who were booked for allegedly defrauding people through a gold saving scheme [Mehul Choksi v. State of Gujarat]..Justice Sandeep Bhatt refused to even consider the plea filed by Choksi in the matter, stating that Choski has no regard for the laws of the country."It is clear that petitioner no.1- Mehul Choksi has left the country long ago and he is not cooperating with any prosecution, though various complaints are filed against Gitanjali Gems as well as in his individual capacity. Therefore, considering his conduct, present petition is not entertained qua Choksi, as he do not have any respect towards the process of law and such accused cannot be considered for any equitable relief," the order stated..The Court, however, examined the plea filed by Chetna Zhaveri who was one of the directors of Gitanjali Gems, a jewellery outlet owned by Choksi.The Court dismissed her plea after noting that a strong prima facie case was made out against her..The case concerns allegations that customers were duped of their money by being asked to invest in a gold saving scheme.As per the complaint, on September 15, 2013, a couple purchased certain jewellery items from a store styled as 'Gitanjali Jewellers' but they received a bill in the name of 'Divyanirman Jewels', a franchisee of Gitanjali Gems in Ahmedabad.On that day, the complainant couple were informed of a Gold/Diamond Saving Scheme, wherein they were asked to invest ₹5,000 as monthly instalment. By the end of the scheme, investors would get a gold coin, the couple was told. The couple accordingly invested ₹10,000 per month till May 2014, when they were informed by Gitanjali Gems that it had terminated the franchisee agreement with Divyanirman Jewels. The couple then offered to pay the remaining three instalments and asked for their gold coin promised by the scheme, only to be informed that there were no gold coins. Therefore, they demanded their deposited money back, but no such amount was paid despite several calls and emails to the Gitanjali Group.On April 3, 2017, the couple filed a complaint against the owner of Divyanirman Jewels (Digvijaysinh Jadeja), Mehul Choksi and two other directors of Gitanjali Gems..In an order passed on October 11, the High court dismissed a plea to quash this criminal case on finding that a prima facie case had been made out against the accused. It is clear that the investors in the gold scheme were cheated, the High Court remarked, adding that the investigation in the matter should continue. "Prima facie, it is found that after giving false promises through their franchisee, such showrooms are closed down and the customers who have invested their money are cheated. It is found that the showrooms of the company in the respective cities are closed down."The Court also noted that these incidents were reported in all places where Gitanjali Gems had a franchisee."Due to such fraudulent act and closure of the showrooms, money invested by the investors is not refunded and it can be said that a huge scam is committed. Therefore, the ultimate liability can be fastened on the shoulders of the persons responsible for the affairs of Gitanjali Gems and present petitioners being the Directors and actively involved in the management of the company cannot shirk their responsibility," the Court added..Advocate Salil M Thakore appeared for Choksi and directors of Gitanjali Gems.Advocate Param R Buch represented the complainant.Additional Public Prosecutor Chintan Dave represented the State government..[Read Judgment]