The Bombay High Court on Thursday granted bail to Vipul Chitalia, former Vice-President of Mehul Choksi-promoted Gitanjali Group, more than four years after he was arrested in the multi-crore rupees Punjab National Bank (PNB) scam.

The Central Bureau of Investigation (CBI) arrested Chitalia in March 2018 alleging that he was responsible for handling unauthorised Letters of Undertaking (LoUs) and foreign Letters of Credit (FLCs) and maintaining contact with the bank officials.

Justice Bharati Dangre granted bail to Chitalia on Friday. A detailed order with bail conditions was not available immediately.

Chitalia has been booked under the Indian Penal Code sections related to criminal conspiracy, cheating and fraud and also under the Prevention of Corruption Act.

He approached the HC through advocate Vijay Aggarwal after a special CBI court refused him bail in December 2020.

Chitalia had been in prison for four years and the charges in the case were yet to be framed, so he should be granted bail, advocate Aggarwal argued.

Special public prosecutor Hiten Venegaokar, appearing for the CBI, opposed the plea, contending that Chitalia, alongwith Choksi, was instrumental in arranging fraudulent transactions and knew about the fraud from the very beginning.

"He was one of the two authorised signatories of Gitanjali Group when it filed applications for LoUs from banks," Venegaokar said.

The CBI's case is that Choksi, Chitalia and several others in connivance with some officials of PNB duped the public sector lender of Rs 12,000 crore by obtaining LoUs fraudulently.

An LoU is a repayment guarantee given by a bank in India when a firm wants to avail of credit from overseas branches of other banks.

Gokulnath Shetty, then deputy manager of PNB's Brady House branch in south Mumbai and one of the prime accused, allegedly received a bribe of Rs 1.02 crore from Choksi's companies to clear 58 fake foreign FLCs and 142 fake LoUs, the CBI has alleged.