Rs650 crore released from late scamster Harshad Mehta's assets

A Mumbai special court Tuesday ordered the release of Rs.650 crore to the Income Tax department and banks from the liquidated assets of late scamster Harshad Mehta's group, an official said.

Special court's Justice DK Deshmukh, based on a distribution proposal submitted by the finance ministry-appointed custodian, ordered payment of Rs345.76 crore to Standard Chartered Bank and Rs259.65 crore to the State Bank of India (SBI).

Besides, Rs28.34 crore will go to the Income Tax department and another Rs16.25 crore to SBI Caps, totalling Rs650 crore, all coming from the attached accounts of the Harshad Mehta Group, the official said.

“The payments will be released on an interim basis on undertakings to be provided by the receiving entities that the amounts will be brought back to the custodian, if ordered by the special court,” the official said.

The judge ordered the custodian to release the amount to Standard Chartered Bank only after a final court clearance and asked the bank to submit a resolution by the board of directors along with an undertaking from the bank.

This is the second release of its kind to be made against the outstanding dues of the Harshad Mehta Group.

In March this year, custodian Satish Loomba released Rs2,200 crore, of which nearly Rs2,000 crore went to the Income Tax department and the SBI.

The Special Court (Trial of Offences Relating to Transactions in Securities) Act, was enacted by parliament in 1992 to deal with the extraordinary situation arising out of the securities scam with the objective of recovering money lost by banks and for restoration of public confidence in the financial system.

The custodian, the principal administrative officer under the act for the attachment, management and liquidation of assets of the notified entities, functions under a system of concurrent judicial review by the special court, comprising sitting high court judges at Mumbai.