The Bombay High Court granted bail to one of the PNB Fraud Case accused Gokulnath Raghu Shetty observing that he was 65 years of age and had been incarcerated for almost six years awaiting trial.

Gokulnath Raghu Shetty, Ex-Deputy Manager in Forex Department at Punjab National Bank (PNB), was accused of entering into a criminal conspiracy by abusing his official position and misappropriating the funds of the bank.

He was accused of defrauding P.N.B. by issuing Letter of Undertakings (LOUs)/Foreign Letter of Credit through companies Gitanjali Gems Ltd., M/s. Gili India Ltd., and M/s. Nakshatra Brand Ltd. to the tune of Rs.7,080.86/- crores in complete contravention of the Reserve Bank of India’s guidelines.

Shetty had applied for bail for the second time but the Central Bureau of Investigation (CBI) claimed that he was the criminal mastermind in the PNB fraud case along with Mehul Choksi. The CBI further claimed that “a scam of such magnitude would never have seen the light of the day” without the involvement of Shetty.

A Single Bench of Justice M. S. Karnik observed, “Considering the advanced stage at which the investigation is, I am of the opinion that the applicant’s enlargement on bail in view of the long incarceration is not going to prejudice the investigation…The applicant cannot be indefinitely incarcerated as even at this stage after six years as an under-trial prisoner, it is obvious that the trial is going to take a long time to conclude.

Advocate Sandeep Karnik represented the applicant, while Advocate H. S. Venegavkar appeared for the respondent.

An FIR was registered against Shetty under Sections 409, 420, 120-B of the IPC and under Sections 13(1)(c)(d) read with 13(2) of the Prevention of Corruption Act, 1988 (PCA) by the CBI.

The Court remarked that Shetty had been in custody for almost six years and yet no charges were framed against him. The Court noted that Shetty was 65 years old and imposed stringent conditions on bail.

The Court then distinguished the case of Hemant Bhatt from that of Shetty and remarked that “the applicant is 65 years of age and is incarcerated almost for six years awaiting trial which is likely to take a long time to conclude with around hundred witnesses to be examined.”

The Court granted Shetty bail on furnishing P.R. Bond in the sum of Rs.1,00,000/-. The Court ordered that Shetty could not leave Mumbai/Mumbai Suburban District without the leave of the trial Court and he could not apply for the issuance of a passport till the trial concluded.

Accordingly, the High Court allowed the bail application.

Cause Title: Gokulnath Raghu Shetty v. Central Bureau Of Investigation (Neutral Citation: 2024:BHC-AS:7869)


Applicant: Advocate Sandeep Karnik

Respondent: Advocate H. S. Venegavkar and Kamar Ali Shaikh

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