If Harshad Mehta will clear Harshad Mehta's head of all worldly matters for a small period each day and sit in meditation, Harshad Mehta will feel much peace and realise that things are not as bad as they seem. The Magistrate accorded the permission to investigate the offences which he presumably did under the provisions of Section 155 2 of the Code of Criminal Procedure and thereafter a case was registered. But not many knew about his fraudulent methods. The mega growth that had been witnessed by the exchange in one year came crashing down in a matter of days. A typical ready forward deal involved two banks brought together by a broker in lieu of a commission.
However, over the years Harshad Mehta rose meteorically to become one of the most influential and powerful brokers on the Bombay Stock Exchange. And that is possible only at the courts. He wants to downsized and completely close several 70 regional branches but it make the employees loss their job and less of customers. And it is easier to forge an allotment letter for Rs. But what intrigues us is that how a single man cleverly exploited the loopholes in banking systems. The brokers were encouraged and abetted by the banks to divert funds from the banking system to the stock market. You can equate this to quarterly minimum balance in our savings bank account of present times.
In that case, during the course of investigation first remand was taken for 15 days. Harshad Mehta had two — three store rooms filled with share certificates and related documents, affirms a lawyer who knew Harshad Mehta even before the scam was uncovered. The management of banks might have been sorely tempted to adopt this route to higher profitability. Everyone from industrialist to road side tea vendor were discussing stocks at that time. The hurdle now was to find a way of crediting the cheque to his account though it was drawn in favor of a bank and was crossed account payee. Therefore, relying on these observations, Mr.
Lifestyle Harshad Mehta was famous for pulling up in front of banks in his 40lakhs + Lexus. The Harshad Mehta case stands out purely on account of its magnitude — the sum of money and the profile of the accused. Therefore, I find no force in the submission of Mr. The next day Harshad went to his brokers and offered the papers of the house as guarantee. Magistrate has no power to delaine an accused after that period. The major implication of raising interest rate on new borrowings is that it would trigger a fall in the market prices of the old loans which are pegged at the old lower interest rates.
Further this provision is a help in aid to the Criminal Court for summoning the accused from another jail for the purpose of answering a charge in Inquiry or trial; and to appear as witness or for giving evidence. What was necessary now was to find a way of eliminating the security itself! However, vide order dated 22nd August, 1992, Mr. It promises to deliver the securities to the buyer. It also states that in the mean time, the seller holds the securities in trust of the buyer. In this regard, he has placed reliance on the decision of Mysore High Court in the case of M. His continuouss detention would be illegal.
Banks never moved the security itself, the Bank receipt acted as the security itself. That is, the seller handed over the securities to the broker, who passed them o the buyer, while the buyer gave the cheque to the broker, who then made the payment to the seller. And it is easier to forge an allotment letter for Rs. Bail was sought because the detention without remand was illegal. Born in a lower middle-class Gujarati Jain family, Mehta spent his early childhood in Mumbai where his father was a small-time businessman. Depression of Big Bulls Life: Depression of Big Bulls Life The bear cartel has exposed the truth behind the constant rise of this Big Bull. In the early eighties he quit his job and sought a job with stock broker P.
The borrowing bank actually sells the securities to the lending bank and buys them back at tenure, at a slightly higher price. To strengthen his arguments he placed reliance on the Full Bench Judgment of the Gujarat High Court in the case of Shardul Bhai Laxman Pancholi Vs. After completing his secondary education Harshad left for Bombay. His youngest brother Hitesh is a practising surgeon at the B. To ascertain the literal meaning it is equally necessary first to ascertain the juxtaposition in which the rule is placed, the purpose for which it is required to subserve and the authority by which is to be used. The minister was eventually sentenced by the court to imprisonment but the sentence has been kept in abeyance on the plea that the Minister wishes to appeal against the sentence.
In sum, it appears that only a small fraction of the funds swindled is recoverable. A rule of thumb which is often quoted throughout the world is that investigation of any fraud will cost as much as the magnitude of the fraud itself. These are: I Whether for the sake of interrogation in connection with the investigation, the prosecuting agency can invoke the provisions of Section 267 Criminal Procedure Code. The broker provided contract notes for this purpose with fictitious counter parties, but arranged for the actual settlement to take place with the correct counter party. Years had gone by and the driving ambitions of a young man in the faceless crowd had been realised. For almost everybody, except those involved in it for pecuniary reasons, this case has lost its relevance.