A special court in Mumbai has rejected absconding diamantaire Mehul Choksi’s application seeking to halt proceedings to declare him a Fugitive Economic Offender (FEO), dealing a major setback to the prime accused in the Punjab National Bank (PNB) fraud case.

Choksi, who was arrested in Belgium in April this year, had approached the court handling cases under the Prevention of Money Laundering Act (PMLA), urging it to dismiss the Enforcement Directorate’s (ED) plea to designate him an FEO.

He argued that he is already in custody in Belgium for cases pending in India, and that Indian authorities have sought his extradition. Therefore, he claimed, “the application filed by the ED to declare him an FEO deserves to be dismissed, as he is already in custody for cases in India.”

The ED strongly opposed the request, maintaining that the 66-year-old “does not want to return to India” and is actively contesting the extradition proceedings initiated against him in Belgium.

The agency further contended that FEO proceedings conclude only when an absconding accused appears before the court, and thus “it cannot be terminated now.” It also insisted that “there are no merits in Choksi’s plea, and it deserves to be dismissed.”

Under the Fugitive Economic Offenders Act, an individual can be declared an FEO if a warrant has been issued against them for offences involving at least Rs 100 crore, and they have left India and refused to return. Once declared an FEO, authorities are empowered to confiscate the person’s properties.

On October 17, a Belgian court upheld India’s request for Choksi’s extradition, though he has since challenged the decision in the country’s Supreme Court.

Choksi and his nephew Nirav Modi are the principal accused in the Rs 13,000-crore PNB scam, being investigated by both the Central Bureau of Investigation (CBI) and the ED. They allegedly siphoned off public funds using Letters of Undertaking (LoUs) and foreign letters of credit (FLCs), purportedly by bribing officials at the bank’s Brady House branch in Mumbai.

While Choksi continues to fight extradition from Belgium, Nirav Modi remains lodged in a London prison.