CBI Drops Corruption Charges In ₹214 Crore Winsome Diamonds Fraud Case, Transferred To Magistrate

Mumbai: In a significant development in the long-running Winsome Diamonds and Jewelleries Ltd. (WDJL) bank fraud case, a Mumbai court has removed allegations of public corruption from the prosecution, narrowing the case to charges of cheating and criminal conspiracy involving private parties. The move follows the Central Bureau of Investigation’s (CBI) acknowledgment that its probe found no evidence implicating bank officials or other public servants.

Court Orders Transfer of Case

On Monday, a special CBI court in Mumbai ordered that the ₹214.35-crore fraud case be transferred from a sessions court to a metropolitan magistrate court at Esplanade. Special Judge Dr. J.P. Darekar accepted the CBI’s submission that provisions of the Prevention of Corruption Act were no longer applicable, as the investigation did not substantiate claims of official misconduct.

With the corruption charges dropped, the sessions court directed that the first information report (FIR) and all related records be forwarded to the chief metropolitan magistrate, who will now oversee further proceedings.

How the Case Began

The case was registered by the CBI on April 4, 2017, based on a complaint from a senior official of Vijaya Bank. The complaint alleged that Winsome Diamonds and its promoters misused eight standby letters of credit issued for overseas bullion transactions, resulting in losses of more than ₹214 crore to the bank.

This FIR was one of several cases filed against WDJL. Investigators have previously stated that the company and its associated entities caused cumulative losses of approximately ₹4,627 crore to multiple public sector banks through similar transactions.

Allegations of Complex Financial Maneuvering

According to investigators, the alleged fraud took place during 2012–13, when credit facilities were availed under the pretext of importing gold and diamonds. Instead of legitimate trade, the funds were allegedly routed through a network of 13 companies based in the United Arab Emirates that were said to be under the company’s control.

Authorities have alleged that the proceeds were layered through multiple international bank accounts and partially parked in entities linked to family members of WDJL promoter Jatin Mehta, who has been described by investigators as a fugitive. Foreign banking channels, including London branches of international banks, were cited in the FIR as part of the alleged transaction trail.

What Happens Next

With the corruption element removed, the magistrate court will now consider whether the evidence supports charges of cheating and criminal conspiracy under the Indian Penal Code against the company, its promoters and directors. The court will decide on taking cognisance of the charges and the next procedural steps in the trial.

The CBI has clarified that while no case could be made out against public officials, the investigation yielded sufficient material to continue prosecution against the remaining accused. The court’s order represents a recalibration of the case rather than its conclusion, ensuring that the alleged misuse of bank credit will still be examined through the judicial process.