On February 25, 2021, the Westminster Magistrates’ Court presided by Judge Sam Goozée allowed India’s extradition request for diamantaire Nirav Deepak Modi (NDM). Through his well-reasoned order, Judge Goozée found that the Government of India (GOI) had laid out a case to satisfy the elements of English Law required for granting an extradition request and that there was no imminent apprehension that NDM would be denied a fair trial.
In this article, the author examines Judge Goozée’s decision, one that is certainly heralded as a victory for the GOI, considering that a highlight of the ruling party’s election campaign was its promise to bring economic fugitives to justice.
In early 2018, officials at Punjab National Bank (PNB) wrote to the Central Bureau of Investigation (CBI) complaining that PNB had been defrauded for millions of rupees by NDM through three companies under his control – M/s Diamond R US, M/s Solar Exports, and M/s Stellar Diamonds. Colluding with officials at the bank, NDM had obtained Letters of Undertaking (LOU) to the tune of INR 6498.20 crores under the garb of facilitating foreign transactions. The LOUs’ had been issued without the appropriate documentation, were not recorded in the bank’s recording system, and were not used to pay import bills. The CBI investigated the complaint and charged NDM under Section 120B (Criminal Conspiracy) read with Section 420 (Cheating and Dishonestly Inducing Delivery of Property), Section 409 (Criminal Breach of Trust by Public Servant or by Banker, Merchant or Agent) of the Indian Penal Code, 1860 (IPC) and Section 13 (Criminal Misconduct by a Public Servant) of the Prevention of Corruption Act 1988.
Parallelly, the Directorate of Enforcement (ED) also initiated an investigation in February 2018 into offenses of suspected money laundering of the proceeds of the fraud reported by PNB. It was discovered that NDM had established several overseas companies where dummy directors were appointed to receive the proceeds of the fraud on PNB. The companies were used for the circular rotation of diamonds, pearls, gold, and jewelry at highly inflated values to give the impression that the companies in receipt of the LOUs issued by PNB were engaged in legitimate trade. Based on these criminal investigations, an extradition request was made by the GOI to the United Kingdom on July 27, 2018.
Subsequently, the CBI also caught wind of an allegation that NDM had sought to remove original documents relating to the LOU applications from PNB’s premises to the offices of Cyril Amarchand Mangaldas (CAM). Also, NDM conspired to destroy a server in Dubai in which data relating to NDM’s companies was stored and threatened to kill one of the accountants in his overseas companies (Mr. Ashish Lad). NDM was charged for causing the disappearance of evidence and criminal intimidation to cause death under the IPC. An additional extradition request was made on these grounds by the GOI on February 11, 2020.
2. Ruling on the extradition request
To allow the extradition request, Judge Goozée noted that the GOI had to satisfy the criteria laid down under Section 84(7) and Section 137 of the Extradition Act, 2003 (Act). Under Section 84(7) of the Act, the GOI was to establish that on one possible reading of the facts emanating from the evidence before the court, it could be established that NDM could be held guilty in UK jurisdiction of a crime comparable to the crimes he was accused of in India in a summary trial.
With regard to the PNB fraud being investigated by the CBI, the court characterized it as an offense under Section 12 of the Criminal Justice Act 1987 as a conspiracy to defraud. Based on the evidence before it, the court found that the LOU’s were obtained fraudulently – without the requisite cash margins, documentation, and recording procedures. Judge Goozée rejected the submission that the LOU’s were obtained for the conduct of legitimate business. On this ground, the requirements of Section 84(7) of the Act were held to be satisfied.
Building on this finding, it was found that the ED’s investigation of money laundering is parasitic on whether a prima facie case of conspiracy to defraud has been made out. The counsels for NDM had admitted in their written submissions that if a prima facie case for conspiracy to defraud is made out, then axiomatically, a case for money laundering will also be made out. Thus, for the charge of money laundering, which was characterized by the court as an offence under Section 1 of the Criminal law Act 1977 and Sections 327 and 334 of the Proceeds of Crime Act 2002, the requirements of Section 84(7) of the Act were held to be satisfied.
Lastly, on the accusations of the disappearance of evidence and criminal intimidation to cause death levied by the CBI against NDM, which were characterized as offenses under Section 1 of the Criminal Law Act 1977 and common law, the requirements of Section 84(7) of the Act were held to be satisfied. Appreciating the evidence in the entire context of the matter, it was found that the act of transferring the original LOU documents to CAM’s office could not be characterized as a routine activity under a retainership agreement with an attorney. It was also found that there was sufficient evidence to establish a prima facie case against NDM for threatening Mr. Lad’s life.
Having established prima facie grounds to hold NDM guilty on the aforementioned counts, the GOI proceeded to discharge the burdens under Section 137 of the Act, which is:
- That the alleged conduct occurred in India.
- That the alleged conduct is punishable in the UK and India by imprisonment for 12 months or more.
Thus, the GOI was successful in establishing that NDM could be extradited.
3. Defenses taken by NDM
NDM counsels relied on Section 87 of the Act to oppose the extradition request on human rights grounds. The grounds alleged were that NDM will not have a fair trial in India (Article 6 of the European Convention on Human Rights (ECHR)) and that NDM will be subject to torture and degrading treatment in India (Article 3 of the ECHR).
Regarding the fair trial, the court received evidence from Justice Katju, who stated that in his belief, the judiciary in India has become subservient to the ruling government and is riddled with corruption. However, this evidence was not appreciated by Judge Goozée as he concluded that Justice Katju’s conduct in relation to this case (where he stated his opinions regarding the independence of the judiciary in the Indian media) and his outspoken nature, in general, reflected ‘hallmarks of an outspoken critic with his agenda.’ It was found that there was no evidence which demonstrated that if NDM was extradited, he is at a real risk of suffering a flagrant denial of justice.
The court also rejected the grounds taken under Article 3 of the ECHR. The main contentions here were that the prison cell in which NDM was proposed to be held (Arthur Road Prison, Barrack No. 12) does not comply with human rights standards and that the mental health of NDM is such that he requires medical help which the prison authorities are incapable of providing. These contentions were not merited. It was held that Barrack No. 12 suffices for Article 3 of the ECHR and that a sovereign undertaking from the GOI to allow NDM access to doctors of his choosing address any health concerns. Thus, the defenses to the extradition request failed, and it is now up to the UK Secretary of Home Affairs, Ms. Priti Patel, to authorize the extradition order.
This is certainly a welcome decision for the GOI. It has proclaimed on multiple occasions that its goal is to bring to justice economic fugitives such as NDM and Vijay Mallya. However, several damning statements were made in the hearing regarding the independence of the Indian judiciary, which effectively casts a global spotlight on any trial NDM may face in India. The GOI and judiciary must thus err on the side of caution and ensure that not only is NDM given a fair trial, but there is an apparent image of appearance surrounding the same.