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Type of Security Transaction Value 15 Crores units Rs. 200 crores (Karad B. R.) 9% IRFC (1/1) Rs. 385 Crores (Metro B. R.) 9% IRFC (1/4) Missing B. Rs. Rs. 45 crores (various B.Rs) 12.5% GOI 2007 Rs. 80 crores (Karad SGL) 6% GOI 1994 Rs. 50 crores (Metro SGL) 11% IDBI 2002 Rs. 20 crores (Metro B. R.) 11.5% IDBI 2011 Rs. 47 crores (Karad B. R.) 8.75% IDBI 2000 Rs. 23 crores (Karad B.R.) 6 crore units Rs. 90 crores (Metro B.R.) 12% ICICI 2011 Rs. 50 crores (Metro B.R.) Cantriple Rs. 205 crores (Physical) Cantriple (Expected) Rs. 58 crores Rs. 1253 crores The letter further goes on to say that Dalai had delivered to the bank stocks, shares, deposits etc., as listed in the annexure to the said letter by way of securides towards the short-fall and/or any further short-falls which may be ascertained. The stocks and shares which were listed in the annexure to this letter were the one which were handed over by Dalai to the appellant bank between llth and 15th May, 1992 and were stated to be worth Rs. 145 crores, in respect of which, the present suit was filed. By this letter Dalai further agreed to keep the appellant bank indemnified against any loss which it might have incurred and/or suffered upon the appellant bank corapletion of final re-conciliation of its account with Dalal and he undertook to make good any such losses either by payment in cash or by physical delivery of such other assets as the bank might require. The letter also postulated that if on the completion of the re-conciliation, aggregate of the cash paid and the value of the assets delivered exceeded the amount of loss identified, then the Bank was to refund such excess to Dalai. He further confirmed and agreed that the appellant bank was authorised to sell the stocks, shares, debentures etc., which were handed over to the bank and to appropriate the proceeds thereof to partly liquidate his liabilities to the bank. If there was any short fall after such appropriation, Dalal held himself to be personally responsible to pay to the bank such balance as was outstanding.

The loss of Rs. 201 crores qua item No. l in regard to the non-delivery of Rs. 15 crores units of U.T.I. of the face value of Rs. 150 crores was proved through the evidence of Mr. Sanjay Pandit, PW 4. The documents which were produced in evidence for proving that the appellant bank had made payment of Rs. 201 crores for the purchase of the said U.T.I. units, which securities were not received by the appellant bank, was firstly a deal slip No. 7941 which showed purchase of these units from the Bank of Karad. In respect of this transaction, cost memo had been received by the appellants from the Bank of Karad on 8. l. 1992. A transaction slip dated 8. l. 1992 showing the purchase of Rs. 15 crores U.T.I. units at the rate of Rs. 13.40 (Ex. 'B'- Vol. IV) per unit amounting to Rs. 201 crores was proved by PW 4. Also placed on record was the banker's receipt dated 8th January, 1992 for a sum of Rs. 201 crores. Against this, on 8th January, 1992, there was a sale of 9 per cent I.R.F.C. bonds of the face value of Rs. 210 crores. By pay order dated 8th January, 1992 bearing No. 231967, a sum of Rs. 199.79 crores was paid to the Bank of Karad. Another document Ex. M is the receipt dated 8th January, 1992 issued by the Bank of Karad acknowledging the receipt of Rs. 201 crores in respect of said U.T.I. units. In face of the said evidence, Shri Ganesh was unable to persuade this Court that the decision of the Special Court in accepting the loss of Rs. 201 crores was incorrect. This finding regarding the loss of Rs. 201 crores is affirmed.

Now we come to the next item of loss which was accepted by the Special Court, namely, that of Rs. 79.80 crores mentioned as item no. 10 in Ex. 'G'.

During the cross-examination of the appellant bank witness PW 6, the counsel for the Hiten Dalal put him the following question:

"Mr. Rao calls upon the plaintiffs to show any single transaction wherein the plaintiffs' funds have been diverted by Mr. Hiten Dalai through bank of Karad". This question was put to the witness on 6th November, 1998. Thereafter on llth November, 1998, the said PW 6 tendered in evidence Ex. 19 (colly) which was a statement containing details of two transactions which indicated that money had ultimately gone to the account of Dalal. One of the transactions which was listed was item no. 10 of Ex. G. When this statement was tendered in evidence, the Special Court noted that the counsel for the appellants had kept in Court all the Deal Slips, Cost Memos, Pay Orders and Banker Receipts. These were not marked as exhibits because the counsel for Dalal stated that he had not called for these documents and the said counsel had not taken inspection of the said documents. The Special Court observed that this statement Ex. 19 had to be regarded as having been tendered under Section 163 of the Evidence Act and, therefore stood proved and was binding on Dalai. The Special Court then examined the said Ex. 19 which showed that the appellants had purchased six crores units of the U.T.I. of the face value of Rs. 60 crores for Rs. 79.80 crores from the Bank of Karad and had made payment of the same by Pay Order No. 231919 for Rs. 37.63 crores. This payment was made after netting of sale of security to Bank of Karad. Ex. 19 further shows that in respect of said transaction, the appellants had received a banker receipt No. 18 of the Metropolitan Co-operative Bank. Ex. 19 further showed that the money which the appellants paid to the Bank of Karad was credited into the account of one Abhay Narottam in the Bank of Karad and thereafter, from that account, an amount of Rs. 36 crores was transferred/ credited to the account of Dalal with Andhra Bank. The Special Court observed that even though the said statement established that Rs. 36 crores had been transferred into the account of Dalal, no evidence had been led by him to show why he had received Rs. 36 crores and/or that it was under some transaction with the Bank of Karad. In the absence of such evidence, the Special Court came to the conclusion that this money of the appellant bank had been siphoned out by Dalai. The Special Court further noted from Ex. 19 that on 27th November, 1991 the appellant bank purchased 13 per cent M.T.N.L. Bonds of the face value of Rs. 20 crores from the Bank of Karad and by pay order No. 231079, a sum of Rs. 18.71 crores was paid by the appellant bank to the Bank of Karad. A sum of Rs. 29.99 crores, which included the aforesaid sum of Rs. 18.71 crores plus another sum of Rs. 11.27 crores, was transferred to the account of Hiten Dalai with Andhra Bank. The Special Court noted that in this case also it was shown that from the Bank of Karad an amount of Rs. 18.71 crores of the appellant's bank had gone to the account of Hiten Dalai. The Special Court further noticed that in respect of this transaction relating to Rs. 18.71 crores regarding the purchase of 13 per cent M.T.N.L. bonds, the appellant bank had not claimed that they had suffered a loss as the said transaction was not listed in Ex. G. While not accepting the sum of Rs. 18.71 crores as being loss/suffered by the appellant's bank, the Special Court accepted the loss of Rs. 79.80 crores being the face value of six crores Units of the U.T.I. in respect of which Rs. 37.63 crores had been paid but the said units were not received.