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1993 UTI scam: Criminal breach of trust apparent,says High Court

A year after a magistrate accepted a police report that stated charges of disposal of assets and diversion of funds in the 1993 UTI scam were not substantiated,the Bombay High Court on Friday observed that criminal breach of trust was apparent in the case.

Written by MAYURA JANWALKAR | Mumbai | Published: March 3, 2012 1:31:50 am

A year after a magistrate accepted a police report that stated charges of disposal of assets and diversion of funds in the 1993 UTI scam were not substantiated,the Bombay High Court on Friday observed that criminal breach of trust was apparent in the case.

The Unit Trust of India (UTI) had challenging an order of the additional chief metropolitan magistrate on March 3,2011 that had accepted the report filed by a special investigation team probing the alleged scam. The court,however,asked the accused in the alleged Rs 50 crore fraud to be made a party in the case.

The names of senior Nationalist Congress Party leader Praful Patel and two others were dropped from the case on November 19,2004. S R Chitnis,senior counsel for the UTI,however,told the court that they may make even these names a party to the petition.

The scam pertains to an alleged fraud in which Autoriders Finance Limited (AFL) – Patel ceased to be its chairman in 1999 – had,between 1993 and 1995,procured a loan of Rs 50 crore from UTI and allegedly sold 2,952 vehicles that served as surety against the loan prior to repayment. It was also alleged that the AFL had misappropriated funds by purchasing two plots of land in the Juhu Vile-Parle Development Scheme in the name of its directors.

Chitnis told the court that an inquiry was necessary as public money was at stake. “With interest,the amount comes to Rs 300 crore now,” said Chitnis. “Section 406 IPC (criminal breach of trust) is apparent,” Justice A V Nirgude said. Additional Solicitor General D J Khambata,however,pointed out that the six main accused in the case had not been joined as parties to the litigation. Asking “all concerned” to be made parties,Justice Nirgude said,“Why play with fire? If you can make them parties you should.”

Gaurang Tripathi,who became non-executive director of the company in 2002,intervened in the case. His counsel Shirish Gupte said that he too had intervened on his own and was not impleaded in the case by the UTI. Tripathi contended that UTI had not approached the court with clean hands as it had not objected when Patel and two others — TNV Ayyar and Surendra Ruia — were dropped from the case.

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