Supreme Court raps Stanchart for flouting norms

In reduction of Dalal’s liability to the appellants, the court said, they are entitled to sell the original shares, rights shares, and the bonus shares and also to retain the dividend and interest accrued on the original shares, the court said.

The court said cantritle units referred to in the letter dated May 11, 1992 representing transaction value of Rs 205 crore shall be returned to the custodian and his retention would be subject to the outcome of the other proceedings including miscellaneous application No 36 of 1993 and the appellants and other parties would be entitled to try and establish their rival claims to the same unit.

BANK INCURS RS 280 CR LOSS: The Supreme Court has held that Standard Chartered bank suffered a loss of Rs 280 crore due to its dealings through stock broker Hiten Dalal during the securities scam period, PTI adds.

The bank in its petition before the court, while challenging the Special court verdict, had claimed that it had suffered a whopping loss of Rs 1,253 crore, which was invested through Dalal but was found later that they were not backed by securities or banker receipts.

A division Bench comprising Justice B N Kirpal and Justice R P Sethi partly allowing the appeal of the bank said "the decision of the Special Court holding that the appellants had been able to prove loss to the extent of Rs 280.80 crore is affirmed".

It, however, dismissed Dalal’s appeal against the Special Court’s December 1998 order which had imposed a cost of Rs 30 lakh on him. The Bench modifying the trial court’s order said "In reduction of Dalal’s liability to the appellants, they (the Bank) are entitled to sell the original shares, rights shares and bonus shares as also to retain the dividend and interest accrued on the original shares."

In partial discharge of his liability, it was claimed that Dalal had delivered shares worth Rs 145 crore to the bank in pursuance of an agreement between the two. However, Dalal had later denied any such agreement and alleged that these shares were forcibly taken from him.

Justice Kirpal, writing the judgement for the Bench, said "We hold that the letter of May 11, 1992, addressed by Hiten P Dalal to the Standard Chartered bank created a pledge in their favour not only of the shares and debentures worth Rs. 105 crores but also on the bonus shares, dividend and interest accrued on the said pledged shares and debentures."

He said the Bank was entitled to sell the original shares, rights shares and bonus shares as also to retain the dividend and interest accrued on the original shares to reduce Dalal’s liability to the bank.

The Apex Court ordered return of Cantriple Units referred to in the May 1992 letter to the Custodian and said the retention would be subject to outcome of other proceedings. The Bench affirmed the order of the Special Court awarding a cost of Rs 30 lakh against Dalal but refused to interfere with the critical comments made by the trial court against the conduct of Bank and its employees.