PNB fraud: Executive Director challenges sanction for prosecution, HC seeks Centre response

The Delhi High Court on Wednesday sought the Centre's response on a plea by a PNB executive director, accused in the over Rs 13,000 crore bank fraud involving Nirav Modi, challenging the sanction granted for his prosecution.

Justice Mukta Gupta issued notice to the Centre and sought response by January 7 on the plea of K V Brahmaji Rao who has claimed that the sanction for his prosecution was granted without any application of mind.

On the insistence of senior advocate Sanjay Jain, appearing for Rao, the court also called for the file relating to grant of prosecution.

Jain said a perusal of the records would show there was "no application of mind" while granting sanction for prosecution and urged the court to call for the records.

Rao has challenged the government's October 12 decision granting sanction for his prosecution in the case, saying that he was not even remotely connected with the day-to-day transactions.

Jain argued in court that the sanction would adversely affect Rao's career as he would not be appointed as Managing Director of Vijaya Bank for which he has been shortlisted.

The senior lawyer further said that his client's tenure in PNB was set to end on January 21, 2019, and if the sanction for prosecution remained in operation then his career would be ruined as he would be compulsorily retired after that.

"It is a case of gross miscarriage of justice. The order granting sanction suffers from illegality," he argued.

Diamond jeweller Nirav Modi, his uncle Mehul Choksi and others are being investigated by multiple probe agencies after the scam came to light following a complaint by PNB that the duo had allegedly cheated it of Rs 11,400 crore, with the purported involvement of a few employees.

The CBI charge sheet in the PNB fraud case names Rao as one of the accused employees who had through their acts facilitated the issuance of fraudulent Letters of Understandings to companies owned by Modi.

Rao, in his defence, has contended that he was in the International Banking Division of PNB, where the fraud took place, for only six short months on a temporary basis.

"I was a domain ED. I was not even remotely connected with the day-to-day transactions. There were eight other employees of the bank who were directly involved in the transaction," his lawyer argued in court.