Gokulnath Shetty's lawyers opposed the CBI's plea citing his health conditions.

A special court in Mumbai on Tuesday refused the CBI permission to subject former Punjab National Bank (PNB) official Gokulnath Shetty, an accused in the PNB scam, to polygraph and narco-analysis tests.

Gokulnath Shetty, alleged to have played a key role in the Rs 13,700-crore fraud when he was a deputy manager at PNB's Brady House branch in Mumbai, was arrested in March 2018.

The Central Bureau of Investigation had sought permission to subject him to narco and polygraph tests, saying it wanted to find out about the "pecuniary benefits" received by him out of the fraud.

Gokulnath Shetty's lawyers opposed the CBI's plea, saying he was a senior citizen suffering from various ailments and the tests would affect his health.

Special judge for CBI cases V C Barde rejected the agency''s plea, noting that the accused had not consented to the tests, and consent was mandatory before such tests are performed.

The scam came to light when jewellery firms of prime accused Nirav Modi and Mehul Choksi approached the Brady Road branch of the PNB in January 2018, seeking Letters of Understanding (LoU) for payment to suppliers.

The bank realised that LoUs were being issued to these firms fraudulently for seven years by bypassing its core banking system, and Gokulnath Shetty was allegedly instrumental in this.

An LoU is a guarantee given by the issuing bank to overseas branches of Indian banks for grant of short-term credit to the applicant.

In case of loan default, the bank issuing the LoU has to honour the liability.

Efforts are on to bring back Nirav Modi and Choksi to India from abroad to face trial in the case.