The Telegraph
Since 1st March, 1999
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State Bank-NHB deal approved

New Delhi, Nov. 1 (PTI): In a major settlement relating to the securities scam, the Supreme Court today approved a deal in which the State Bank of India agreed to take back only Rs 611 crore of the Rs 707 crore it gave to National Housing Bank way back in 1992.

A three-judge bench headed by Chief Justice B. N. Kirpal put its stamp of approval on the settlement between the two banks by which it was agreed that “NHB shall pay a sum of Rs 353,78,19,500, i.e. 50 per cent of Rs 707,56,39,000 to SBI. NHB shall not be responsible to pay any interest on the said sum of Rs 707,56,39,000, paid by SBI to NHB on June 13, 1992.”

However, appearing for SBI, solicitor general Harish Salve and advocate Sanjay Kapoor moved an application seeking possession of the securities deposited by Harshad Mehta with SBI valued at Rs 258 crore. With this sum, SBI’s net gain from the deal works out to Rs 611 crore.

The court allowed SBI to take possession of “securities along with all accruals thereon handed over by the late Harshad Mehta to the officers of NHB in March 1992 having an aggregate value of Rs 258 crore”.

The settlement noted “SBI shall be entitled to withdraw the said sum of Rs 75,84,55,421 along with all accruals thereon deposited by NHB with the special court with the interest accrued thereon. The aforesaid sum of Rs 353,78,19,500 shall be reduced by the amount i.e. Rs 131,20,23,980 and the interest thereon so withdrawn by SBI. NHB shall pay the balance amount to SBI.”

Disputes and differences had arisen between SBI and NHB relating to an aggregate amount of Rs 707.56 crore on account of 13 cheques drawn on the Reserve Bank of India (RBI) by NHB and issued in favour of SBI during the period October 25, 1991 to March 30 1992. The proceeds of these cheques were utilised by Mehta during the securities scam period.

RBI had directed SBI to pay a sum of Rs 707.56 crore to NHB, pursuant to which SBI paid the same to NHB in June 1992, reserving its right to recover the said amount.

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