Sucheta Dalal :Apex court asks special court to assess Harshad Mehta property
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Apex court asks special court to assess Harshad Mehta property  

August 12, 2009


The Supreme Court has asked a special court in Mumbai to assess the liabilities and assets of stockbroker Harshad Mehta, who was involved in the securities scam that rocked the country in the early nineties, reports PTI.
The Special Court in Mumbai, which was set up to try matters relating to the securities scam, has been asked to decide afresh pleas against auctioning property worth over Rs1 billion belonging to Mehta.
The Special Court ordered auctioning eight out of nine flats belonging to Mehta in the massive housing complex 'Madhuli' on the Annie Besant Road in Mumbai.
A Bench headed by Justice SB Sinha (who retired last Saturday) said: "The impugned judgment is set aside and the matter is remanded to the learned Judge, Special Court, for consideration ... in the light of the observations of this Court ... preferably within a period of six months from the date of this judgment. The appeal is allowed ..."
“The learned Judge, Special Court, in his judgment has mainly dealt with the contentions raised by the custodian in terms of the written submission filed on its behalf. The contentions of the appellants have not been considered in the impugned judgment. It is furthermore contended on behalf of the appellants, that out of the twenty six paragraphs of the impugned judgment, 15 paragraphs are near verbatim reproductions,” the apex court said.
Arvind Kumar Tewari, the counsel for the custodian, said that the landmark judgement 'had strengthened the arms of a special court to recover crores of public money siphoned (off) by the Harshad Mehta group and various other notified parties involved in the scam'.
Harshad Mehta, who died of a heart attack in Mumbai in December 2001, faced allegations of diverting huge amounts of public money to the securities market.
Jyoti Harshad Mehta, the late stockbroker's wife, and other family members had challenged the special court's orders which directed attaching Mehta's property on the grounds that it was constructed using the money accumulated during the stock market scam.
Tewari further said that the verdict would not affect the auction of eight flats belonging to the Mehtas in the massive housing complex ‘Madhuli’ on the Annie Besant Road, which were ordered to be auctioned by the Special Court in Mumbai.
"By a separate order on 27th July this year, Justice Sinha ordered that the sale of these eight flats owned by the Harshad Mehta's family shall be confirmed by the special court," Tewari said.
The apex court has asked the special court to consider the two audit reports filed by chartered accountants Vyas and Vyas and Vinod K Agarwala and Company.
According to the apex court, a lot of documents had been filed with regard to audited reports by the chartered accountants, but ‘it does not appear that the special judge had considered this aspect of the matter in great detail’.

-- Sucheta Dalal