SC allows banks, FIs to recover dues from Parekh

NEW DELHI: The Supreme Court has held that banks and financial institution can claim their dues from stock scam kingpin Ketan Parekh by selling his securities. Upholding the judegment of the Bombay High Court, a bench headed by A K Mathur said: "Whatever dues are due to the banks or financial institutions can be claimed under Section 11(2) of the Special Courts (Trial of Offences relating to Transcations in Securities) Act 1992 which specially empowers that the liabilities can be adjusted out of the securities of the person notified." While dismissing the appeal by the Bank of India, the court said that the view taken by the Bombay High Court appears to be justified and there was no ground to interfere with the same.
Allowing the Oriental Bank of Commerce to sell the seized stocks of Parekh, the Court said, "Therefore, in the present case, the bank can certainly make an application before the Special Court under Section 11(2)(b) of the Act of 1992 for discharge of their liabilities against the securities of the notified person (accused)." Afetr Parekh was held guilty for the scam and was declared a notified party on October 6, 2001, all his properties - movable and immovable - stood attached simultaneously. Parekh was convicted for swindling Rs 250 crore of the Global Trust Bank, which was later merged with the Oriental Bank of Commerce. The bank had filed a petition seeking recovery of its money by selling the shares held by Parekh and his company.
20 May, 2008, 2113 hrs IST, PTI
THE ECONOMIC TIMES