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Harshad Mehta acquitted in call money case

A special court on Monday acquitted Big Bull Harshad Mehta and three others in a case of alleged misappropriation amounting to Rs 588,000 from the funds of Bank of America in its inter-bank call money transactions, ostensibly with SBI Mutual Fund.

Special Judge S R Mehra, in an oral order, said he was acquitting the accused for reasons to be separately recorded.

Harshad's counsel Mahesh Jethmalani and Prenov Badheka submitted that their client was only a lender and Bank of America had returned the money borrowed from him. They said no wrongful loss was caused to anyone. The bank also was a private one and therefore no public funds were involved.

The trial, involving Harshad and four others, concluded on February 27 with the prosecution examining as many as 12 witnesses to prove their case.

The accused were charged under IPC sections 120-b (conspiracy), 409 (criminal breach of trust), 467 (forgery of

valuable security), 468 (forgery for the purpose of cheating), 471 (using as genuine a forged document), 477 A (falsification of accounts) and 420 (cheating). They are also charged under sections 13(1)(d) and 13(2) of Prevention of Corruption Act.

Besides Harshad, other accused are R Sitaraman, SBI officer, Archana Jog, Officer of Bank of America, and V N Deosthali, assistant manager, UCO Bank.

Defence Lawyers U R Tripathi, M N Rajput and D K Deshmukh, appearing for Deosthali, Sitaraman and Jog respectively, argued that there was no evidence to implicate their clients.

According to prosecution, Archana Jog in conspiracy with other accused, recorded false call money borrow transactions of Rs 265 million and Rs 1.015 billion respectively on two consecutive days from April 8, 1991, with the object of obtaining pecuniary advantage for Harshad.

The counter bank guarantee was shown as SBI Mutual Fund and in respective deal slips notings were made to the effect that the cheques were to be received from UCO Bank and that the repayments were also to be made to it knowing fully well that in genuine call money transaction the lending bank would never send the cheques of a third bank.

Prosecutors P M Pradhan and Raju Mhamane submitted that the cheque for Rs 265 million, dated April 8, 1991 and favouring Bank of America, was issued by accused Deosthali by debiting the current account of Harshad.

Deosthali credited two cheques for Rs 265 million and Rs 1.015 billion dated April 9 and 10, 1991, respectively issued by Bank of America and favouring UCO Bank towards repayments of borrowings unauthorisedly into the account of Harshad without any instructions from Bank of America.

The prosecution alleged that Sitaraman issued banker's cheques for Rs 1.015 billion on April 9, 1991, favouring Bank of America out of funds fraudulently brought by Harshad into SBI's securities division and unauthorisedly discharged call money deposit receipts issued by Bank of America for alleged borrowings from SBI Mutual Fund dated April 8 and 9, 1991.

The prosecution, therefore, alleged that Harshad had lent his funds in call money to Bank of America and thereby obtained pecuniary advantage of Rs 567,000.

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