I-T, SBI get Rs 2,195 cr from Harshad Mehta's assets

The Mumbai-based custodian released on Wednesday a payment of Rs 2,195 crore (Rs 21.95 billion), seized from the sale of Harshad Mehta's assets to the Income Tax department and the State Bank of India.

This disbursement, made against the outstanding dues of Harshad Mehta group, is the largest and one of its kind in the country.

At a meeting held in Mumbai, Satish Loomba, custodian, handed over Rs 1,995.6 crore (Rs 19.95 billion) and Rs 199.25 crore (Rs 1.99 billion) to senior revenue and bank officials, respectively.

BP Gaur, director general of investigation (central) and Nilima Mansukhani, chief commissioner of I-T, Maharashtra, received the payment on behalf of the I-T department. SBI's payments were accepted by B Sriram, chief general manager (securities).

The I-T department has a claim of Rs 20,000 crore (Rs 200 billion) on Harsh Mehta and associates, including the compunded interest.

The amount being released now is only principal. More such disbursements will follow.

Harshad Mehta owed Rs 5,200 crore (Rs 52 billion) to the government as income tax and Rs 103 crore (Rs 1.03 billion) as wealth tax.

When the law took its course, Mehta handed over 51,49,214 shares of 130 companies to the custodian under the Special Court's March 1994 order.

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.

The Joint Parliamentary Committee, set up for the 1992 scam, had estimated the quantum of the scam at approximately Rs 4,400 crore (Rs 44 billion).

The custodian said Mehta did not own any off-shore account or property abroad.

Mehta's family tried to get interim stay on the payment disbursement.

However, the Supreme Court on March 14, while admitting a civil appeal from the Mehta family, denied the stay on the high court order.

The apex court, however, had said if the I-T department and financial institutions are required to bring back the entire or part of the amount disbursed in terms of the impugned order, it shall also include the interest at a rate as may be directed by the court.