Mumbai, Dec 4 (IANS): In a setback to absconding diamantaire Mehul Choksi, the Bombay High Court on Wednesday rejected his plea to stay the Special PMLA Court's proceedings seeking to declare him as "fugitive economic offender".

An accused in the over Rs 13,500-crore Punjab National Bank (PNB) fraud cases along with his nephew Nirav Modi, Choksi had filed a plea in the high court in 2018, Special Counsel for Enforcement Directorate Hiten Venegaonkar said.

"The ED had moved an application before the Special PMLA Court seeking to declare Choksi a fugitive economic offender, under the new Fugitive Economic Offenders Act, 2018," Venegaonkar told IANS.

Choksi subsequently filed a plea in the Bombay HC seeking to stay the case proceedings in the Special Court for Prevention of Money Laundering Act (PMLA).

However, a division bench of Justice B.P. Dharmadhikari and Justice S.S. Jadhav rejected his plea and now the matter will continue before the Special PMLA Court.

Legal experts say that under the FEOA, a person can be declared a "fugitive economic offender" if a warrant issued against him for offences involving Rs.100 crore or more, and they have left the country and refuse to return, and further proceedings can be initiated to recover the dues.

Posing fresh challenges for India, Choksi, 60, surrendered his Indian citizenship in favour of the Caribbean nation of Antigua & Barbuda Isles in early 2018.

He deposited his Indian Passport (No. Z3396732), paid the mandatory $177 and completed other formalities with the Indian High Commission in Guyana, which is also accredited to Antigua & Barbuda Isles and St Kitts & Nevis.

His nephew and co-accused in the PNB scam, Nirav Modi, was traced in London in March 2018 and India is making efforts to extradite him and face the law here.