In a major blow to fugitive diamantaire Mehul Choksi, a special PMLA court in Mumbai on Friday rejected his plea to terminate proceedings declaring him a Fugitive Economic Offender (FEO) in the ₹13,000-crore Punjab National Bank fraud case. The 66-year-old had argued that since he is now under arrest in Belgium and facing extradition to India, the FEO tag should be dropped.

Choksi’s lawyers contended that he is already in custody for Indian cases and an extradition request has been formally made, therefore the Enforcement Directorate’s application to brand him an FEO has become infructuous. They urged the court to dismiss the pending FEO declaration, claiming the basic condition of being “on the run” no longer applies.

The ED strongly opposed the plea, asserting that Choksi continues to resist returning to India by actively contesting extradition in Belgian courts. The agency argued that FEO proceedings can only be terminated when the accused voluntarily appears before Indian authorities, not when he is detained abroad while fighting deportation. The court accepted the ED’s submission and dismissed Choksi’s application, keeping the confiscation process of his domestic and overseas assets alive.

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Under the Fugitive Economic Offenders Act, once declared an FEO for offences exceeding ₹100 crore, all properties of the accused — including benami holdings — can be immediately confiscated by the government. The ED has already attached assets worth thousands of crores belonging to Choksi and his nephew Nirav Modi, the other prime accused in the same scam involving fraudulent Letters of Undertaking issued from PNB’s Brady House branch.

Although a Belgian court upheld India’s extradition request on October 17, Choksi has challenged the order before Belgium’s Supreme Court, further delaying his return. Meanwhile, Nirav Modi continues to remain in a London jail fighting his own extradition battle. With Friday’s ruling, pressure mounts on Choksi as the FEO declaration, once passed, will permanently strip him of all seized properties in India.

Also Read: Fugitive Choksi Takes Extradition Battle to Belgium Supreme Court in PNB Scam Case