The legal noose tightens around Nirav Modi as ED-CBI team leaves for UK

March 19 seemed a regular day at the Westminster Magistrates' Court in London. District judge Marie Mallon was dealing with all kinds of criminals, from Polish smugglers to African human traffickers. On that day, she was confronted with the alleged multi-million dollar fraudster Nirav Modi, who also had a Red Corner Notice issued against him by the Interpol.

The United Kingdom treats the RCN as an arrest warrant, unlike the US where law enforcement needs a separate court warrant to execute an arrest. The judge took some time off, and when she returned—keeping in mind the sum involved and the past conduct of the accused—ordered that Modi be sent to prison.

The denial of bail to the fugitive diamond merchant, accused in the multi-crore Punjab National Bank (PNB) scam, came as a surprise to many in India and the UK. The Enforcement Directorate (ED), the lead agency pursuing the money laundering charges against him in India, was quick to claim that it was thanks to the evidence gathered by the agency that the UK court was forced to decline bail. But, long-time watchers of the British judiciary's workings maintain that the denial of bail has more to do with the suddenness of the development than anything else.

Modi was to be produced in court on March 25 by the extradition unit of the Scotland Yard, under the provision of "arrest by agreement" in the UK law. India had lodged an application with the UK Home Office to initiate extradition proceedings against him in August 2018. The UK Home Office deemed it a fit case for extradition and transferred it to the District Court on March 8.

The fugitive diamantaire had his gameplan set, said investigators. Just like fellow fugitive liquor baron Vijay Mallya who took shelter in London, Modi's solicitors had decided to press for bail which isn't a far call in offences of financial fraud. “But it did not work," said the investigator.

Modi's arrest got expedited after the Holborn branch of UK-based Metro Bank rang up the Metropolitan Police, informing them that a fugitive was trying to open an account by submitting an impounded passport. The police reached the spot and Modi was arrested under an emergency situation and produced in front of a regular district judge.

District judges in the UK are mandated to look at emergency arrests along with their routine work. So, Modi landed in front of Judge Marie Mallon instead of an extradition magistrate, which was the case of Vijay Mallya. After India was informed of Modi's arrest, the ED and CBI, the agencies probing the PNB scam case, swung into action to lay their hands on him.

“We are making all possible efforts to bring back Nirav Modi to face trail in India," S.K. Mishra, chief of ED, told THE WEEK.

The procedure is long, but the team of ED and CBI officials, led by ED joint director Satyabrata Kumar, who heads the Mumbai Zonal Office, is a seasoned one. They recently tasted success in the Mallya case. The CBI team is likely to leave for London today.

The next hearing is on Friday. The agencies are trying to build a watertight case to oppose his bail plea. Sources said Indian investigators will cite instances of Modi's attempts (thrice) to travel out of UK to other countries, using a passport cancelled by India. The diamond merchant, whose multi-million dollar empire ran from dilapidated buildings in Mumbai, to swanky New York addresses, was allegedly using multiple residency cards of various nationalities like Singapore and Hong Kong.

“It will be dangerous if he gets bail. We will challenge the bail plea on several counts, listing out his nefarious activities in UK," said an official, on condition of anonymity. Another example is his attempt to open a bank account using false documents, sources said.

The prosecution complaint filed by the ED in May 2018 had established the role of Modi, his associates and family members, detailing the money trail and evidences of rotation, siphoning and misappropriation of Letters of Undertaking (LoUs) illegally obtained from PNB using dummy entities in India and abroad. “The mammoth infrastructure and deceit deployed by Nirav Modi and his trusted associates to give a facade of legitimacy to these illegal actions was demolished through the clinching evidences collected during the investigation in India and abroad," said the ED. A supplementary prosecution complaint was filed on February 28 this year—a money trail of $927 million, out of a $1015 million crime had been ascertained. As per procedures, an extradition request can be sent only after filing a prosecution complaint (chargesheet) by ED. India sent the extradition request for Modi to the UK government on July 31, 2018.

According to experts, it is likely that the upcoming hearing of Modi's case would move to the extradition judge, who is most likely to be Judge Emma Arbuthnot of the Mallya case fame. In her judgment, she had described Mallya as a "glamorous, flashy, famous, bejewelled, body-guarded, ostensibly billionaire playboy" who may have "charmed and cajoled bankers into losing their common sense and persuading them to put their own rules and regulations to one side". She set aside any suggestion by the defence that a "false case" was being mounted against Mallya to "assuage CBI's political masters". Judge Emma then ordered extradition of the liquor baron, which was approved by UK home secretary Sajid Javid.

Nirav Modi's defence is expected to be on similar lines as Mallya's. He could cite human rights issues, poor jail conditions, and could term the case against him "politically motivated". The CBI and ED team, meanwhile, are ready to fly to London to counter his claims legally. After the extradition request, which is the first affidavit, a second affidavit which contains the case summary detailing the charges against him, will be submitted by the investigators to the UK court. Modi will be allowed to reply to the charges pressed against him. Once the claims and counter-claims are before the court, a case management hearing will be set up. There, the schedule of dates of the trial will be decided and shared with the accused as well as the team of Indian investigators. Modi and his uncle, co-accused Mehul Choksi, had left the country weeks before the PNB scam was detected, in January 2018.

"Now that Modi is behind bars, the challenge is to keep him behind bars. He can't run very far," said a sleuth. The BJP government had pulled off a success story with the extradition of alleged middleman in the AgustaWestland deal, Christian Michel, from Dubai in December last year.

Now, the timing is ripe for the BJP, which has entered the Lok Sabha election campaign with its main bhi chowkidar campaign, to successfully extradite other fugitives like Mallya, Modi and Choksi. Whether the ED and CBI team is able to make its flight from Mallya and Modi's UK den, to Choksi's Antigua in the Caribbean, remains to be seen.