Before Nirav Modi, there was Jatin Mehta: How both took advantage of law to use passports

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New Delhi | Published: June 26, 2018 9:49:29 AM

Winsome Group owner Jatin Mehta had managed to take advantage of a clause to travel out of the country in 2013. Mehta is wanted by probing agencies for his involvement in Rs 6,800-crore bank fraud case.

PNB FRAUD SCAMInterpol had informed Indian agencies that Nirav Modi travelled four times between three countries as recently as March on a revoked Indian passport

The news of multi-crore scam-tainted diamond merchant Nirav Modi travelling on a passport which was revoked by Indian authorities came as a shocker back home. In much embarrassment to officials here, Nirav Modi travelled four times between three countries as recently as in March this year on a revoked Indian passport. As India makes efforts to ensure that Nirav Modi is brought to book back in India and is made to face the law of the land, a look at the case of another fraud-accused businessman reveals a loophole that may have led to the current situation.

According to a Home Ministry report accessed by The Indian Express, Winsome Group owner Jatin Mehta had managed to take advantage of a clause to travel out of the country in 2013. Mehta is wanted by probing agencies for his involvement in Rs 6,800-crore bank fraud case. However, Mehta has now managed to acquire citizenship of Saint Kitts and Nevis. Officials, who are probing this dual citizenship case of Mehta, said the clause which the Winsome Group owner exploited was part of a government circular issued in 2009.

What is the circular?

Consular, Passport and Visa (CPV) division of Ministry of External Affairs had issued a circular on March 24, 2009. This circular stated, “A grace period of three months is allowed from the date of acquisition of foreign citizenship, for the purpose of travel on the Indian passport. Therefore, no penalty will be leviable for travel on Indian passport within three months of acquisition of foreign passport.”

Mehta’s tricks

Mehta had travelled multiple times to India after surrendering his Indian passport in Singapore in Winsome using the aforementioned clause. His last travel on an Indian passport was reported in mid-2013, the report acquired by IE stated. Rules say a penalty of Rs 10,000 is levied with an additional penalty of Rs 10,000 for each journey if the Indian passport is not surrendered after three years and is used for travel after a foreign passport is obtained. “There is no penalty if the passport is not surrendered up to three years but not used for travel after obtaining foreign passport,” stated 2009 circular.

Mehta also managed to obtain citizenship of St Kitts & Nevis. Notably this Caribbean islands country does not have an extradition treaty with India, in November 2012 under a permanent residency status clause for foreign investors.

Charges against Mehta

Six FIRs were registered against firms of the Winsome Group by the CBI, and Mehta was declared “willful defaulter” in December 2016. CBI has claimed that Mehta used seven of his companies to obtain letters of credit from Punjab National Bank, Vijaya Bank and Central Bank of India to purchase gold. Among other charges, the CBI alleged that gold was imported and allegedly re-exported to 13 UAE-based companies. In 2016, the Enforcement Directorate attached properties worth Rs 172 crore of Winsome Diamonds and its subsidiaries under the Prevention of Money Laundering Act (PMLA).

The similarity between Mehta and Nirav Modi

Modi had also used similar loopholes in the law to travel abroad multiple times. Interpol had informed Indian agencies that Nirav Modi travelled four times between three countries as recently as March on a revoked Indian passport, according to IE report. According to the officials, as Nirav Modi has been continuously changing his location across the globe, the extradition request has been made to multiple countries as part of its mandate under criminal provisions of the anti-money laundering Act.

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