The Bombay High Court 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 relief cannot be sought without submitting to the jurisdiction of Indian courts. Following the court’s observations, Mehta withdrew his petition.
Mehta, who is accused in the ₹4,627.24 crore multi-bank fraud case, had moved the high court in 2022 through a power of attorney holder while remaining outside the country. The court indicated it was not inclined to hear the matter in his absence, stating that a person declared a fugitive economic offender cannot remain abroad and simultaneously invoke constitutional remedies in India.
After the court’s refusal to hear the plea, Mehta’s counsel formally withdrew the petition.
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Petition filed through power of attorney
The petition was initially filed on Mehta’s behalf by his power of attorney holder. Following the death of the attorney, Mehta’s legal team sought permission from the court to substitute another representative. However, a division bench of the Bombay High Court made it clear that the core issue was not representation but the continued absence of the petitioner from India.
The bench observed that when an accused chooses to stay outside the country and evade legal proceedings, the court would be reluctant to examine challenges raised against statutory provisions, particularly those aimed at tackling economic fugitives.
In light of the court’s stand, the petition was withdrawn without arguments on merits.
Consistent judicial approach
The development reflects a consistent judicial approach adopted by the Bombay High Court in recent months. In an earlier case involving liquor baron Vijay Mallya, the court had refused to hear a challenge to the constitutional validity of certain provisions of the FEO Act unless Mallya personally appeared before the court.
In that matter, the court had made it clear that fugitives cannot dictate the terms of judicial scrutiny while remaining beyond the reach of Indian law enforcement agencies.
Legal experts say these decisions reinforce the principle that access to constitutional remedies is not unconditional and must be exercised in good faith, particularly by those accused of large-scale economic offences.
₹4,627 crore fraud allegations
Jatin R Mehta and entities linked to him — Winsome Diamonds and Jewellery Ltd and Forever Precious Jewellery and Diamonds Ltd — are accused of defrauding public sector banks of ₹4,627.24 crore. Several others, including members of his family and associates, are also named as accused in the case.
Investigations into the alleged fraud began over a decade ago, with multiple cases registered by central agencies. According to the prosecution, Mehta orchestrated a complex web of transactions involving overseas shell companies to inflate turnover and secure enhanced credit facilities from Indian banks.
Modus operandi under scrutiny
According to the chargesheet, Mehta allegedly floated several shell companies abroad and engaged in import-export transactions involving raw gold. The gold was purportedly imported into India, converted into coins and jewellery at manufacturing units, and sold in the domestic market.
Investigators claim that while the actual business cycle took only a few days, the companies availed credit facilities for much longer periods, allowing funds to be rotated and misrepresented as legitimate trade transactions. Based on inflated turnover figures, higher working capital limits were allegedly sanctioned by banks.
The funds were then allegedly siphoned off by routing them through foreign entities and derivative trades, ultimately reaching accounts controlled by Mehta’s family members.
Banks hit hard
The alleged fraud is said to have caused substantial losses to eight public sector banks. Among the most affected lenders are Punjab National Bank, Central Bank of India, and Canara Bank, which together account for a significant portion of the total exposure.
The case is considered one of the major banking frauds involving the diamond and jewellery sector and has remained under investigation across multiple jurisdictions.
Clear legal signal
Legal observers say the high court’s refusal to hear Mehta’s plea sends a clear message that fugitives cannot seek judicial protection while avoiding the legal process. The court’s stance strengthens the enforcement framework of the FEO Act and underscores the judiciary’s intent to deter economic offenders from misusing constitutional remedies.
The ruling is expected to serve as a precedent in similar cases involving high-value financial crimes and absconding accused persons.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
