Recently, the Mumbai sessions court set-aside order of the magistrate court, acknowledged the chargesheet filed by the CBI against businessman Mehul Choksi and another individual.

The sessions court has sent the case back to the magistrate court, asking it to reconsider the chargesheet.

Last year, in April the CBI's Bank Securities and Fraud cell filed a case against Choksi's company, Gitanjali Gems private limited, and others, following a complaint by the Industrial Finance Corporation of India (IFCI).

This year, in April, the sessions court had stayed the proceedings in magistrate court after another accused, Vipul Chitaliya.

Choksi along with a former fellow director of Gitanjali, Aniyath Nair, had filed a fresh plea before the Sessions court through the same lawyers.

Earlier, the Court held that the Magistrate court had not provided a reasoned order when acknowledging the charge-sheet and issuing summons to all the accused.

The lawyers brought to the court's attention that the Magistrate court had acknowledged the 11,000-page chargesheet on the same day it was filed by the CBI.

They said that the Magistrate had not given proper thought before acknowledging the charge-sheet and issuing the summons.

Case Brief - 

According to the IFCI, in March 2016, Gitanjali Gems approached them for financial assistance to meet their long-term working capital needs.

The IFCI granted a Corporate Loan of Rs 25 crore to Gitanjali Gems after the company pledged shares, gold, diamond, and gold-studded jewelry, which were valued at twice the loan amount.

The IFCI alleges that Choksi colluded with the valuers and intentionally inflated the value of the pledged jewelry.

It further claims that the diamonds pledged to the IFCI were of poor quality. When the IFCI assessed the quality of the jewels, it discovered that they were significantly overvalued. As a result, in June 2018, Gitanjali Gems' account was declared a non-performing asset.

To recover the outstanding installments, the IFCI invoked the pledge when Gitanjali Gems began defaulting.

However, due to Choksi's suspended client ID with the National Stock Depository Limited, the IFCI was only able to sell 6,48,822 shares, which amounted to Rs 4.07 crore, out of the 20,60,064 shares that were pledged.