The government came out with an unusual clarification saying its attention has been drawn to some media reports about the conferment of the Padma Bhushan award on Chatwal.
The release also hailed Chatwal as a 'tireless advocate' of India's interests in the United States and has been working relentlessly for strengthening bilateral relationships between the two countries.
He was ac active member of the NRI committee in the US in securing support for the nuclear deal among the members of the US Congress.
Referring to the allegations of financial irregularities against him, the government clarified that between 1992 and 1994, the CBI had registered five cases against him and some bank officials for conniving with the intention of defrauding the Bank of Baroda and the Bank of India.
"Three of these cases were closed by CBI itself while charge sheets were filed by the CBI in two cases before the Court of Special Judge, CBI, Mumbai. In these two cases, the court discharged Chatwal," it said, adding as per available reports, there is nothing adverse on record against him.
A 'due diligence' exercise is undertaken in respect of each awardee in consultation with appropriate agencies before announcement of the award.
The statement said Padma Awards were conferred only after consideration in terms of the guidelines regulating the award and after observance of established and elaborate procedures.
"No Padma Award is conferred except on the recommendation of the Awards Committee constituted for the purpose and after the due diligence has been done," the statement said.
It said Chatwal was a trustee of William J Clinton Foundation which focuses on critical global issues such as health care, climate change and economic empowerment of the underprivileged in the world community.
Chatwal, who has distinguished himself in the hospitality sector, is also founder trustee of the American India foundation and has made frequent trips to India to provide relief to victims of Tsunami and AIDS.
He was a recipient of the Rajiv Gandhi Award 2005 and has been honoured by the National Jewish Outreach Programme in New York in 2001 and with the 'Order of the Khalsa' by the government of Punjab in 1999.
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