The Hindu Business Line : DRT vacates injunction order on SHCIL properties -- IndusInd evidence `confusing'

THE Debt Recovery Tribunal (DRT) has vacated the order of injunction and appointment of receiver in respect of the properties of the Stock Holding Corporation of India Ltd (SHCIL), which is currently battling with IndusInd Bank in a case involving the Calcutta Stock Exchange broker, Harish Chandra Biyani.

The DRT has also rejected the recalling of injunction, appointment of receiver and attachment of properties against SHCIL.

Referring to the Tribunal's order, Mr S. K. Bajoria, advocate for SHCIL, maintained that a certain letter furnished by IndusInd Bank — a crucial piece of evidence in the case — was "confusing and ambiguous.''

"When a huge amount was to be advanced to Mr Biyani, a broker, by discounting of cheques, the format of the letter should have been clear, without any confusion or contradiction,'' he said.

IndusInd Bank, it may be recalled here, had moved the DRT claiming recovery of over Rs 26 crore — the actual amount is Rs 26,86,24,937.68 — against SHCIL and H. C. Biyani.

On January 8, 2002, it moved an application praying for injunction, appointment of receiver and attachment of property. An order of injunction and appointment of receiver was also obtained. SHCIL applied for vacating the January 8 order and for dismissal of the bank's application.

The Tribunal, according to Mr Bajoria, further noted the "promptness'' on the part of IndusInd Bank to advance a large amount to Mr Biyani "without obtaining proper security.'' SHCIL, he added, had made the following points.

IndusInd Bank knew about the payout programme of the Calcutta Stock Exchange. The condition that cheques would be presented for payment on the next date of the payout (of the rolling settlement) was well known.

There was an "undesirable collusion'' between officials of IndusInd Bank and Mr Biyani.

The only guarantee given to SHCIL was confined to payment of cheques, subject to conditions.

In view of SHCIL's financial status, there does not appear to be any justification for issuing an interim order so as to block its business transactions.

The Tribunal, Mr Bajoria maintained, also observed that the officer of IndusInd Bank, who was appointed receiver, did not take any steps for preparing the inventory of hypothecated and mortgaged properties. Further, Mr Biyani did not take any steps to file his report.

DRT has mandated Mr Shanti Nath Paul, senior Vice-President of the bank, to make an inventory of properties belonging to the stockbroker and file a report within a fortnight. The bank has also been directed to take appropriate measures for the sale of Mr Biyani's properties.

Send this article to Friends by E-Mail

Stories in this Section
`Solicitor's view not subject to litigation'

Rupee gains; gilts decline

MetLife sees market in J&K Bank customers

OM Kotak to offer unit-linked scheme

Geojit arm ties up with MetLife

2 Corpn Bank unions oppose VRS demand

Stir against BoB's downsizing plan

Peerless hopes to complete revamp by August

Housing finance in focus

Hindustan Organic NCD downgraded

HDFC Bank's special pricing for old clients