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SC upholds one-year jail term for Hiten Dalal

The Supreme Court on Wednesday upheld a 1993 judgement of a Bombay Special Court sentencing tainted stock broker Hiten Dalal for defrauding Standard Chartered Bank of over Rs 780 million in connection with transactions in shares during the securities scam in 1991.

Dismissing Dalal's appeal against the special court order, a three-judge Bench comprising Justice B N Kirpal, Justice Ruma Pal and Justice Brijesh Kumar imposed a further cost of Rs 10,000 on him.

With the final court upholding the trial court verdict, Dalal may soon be taken into custody to serve the sentence. The Supreme Court also upheld the trial court order imposing a fine of Rs 100,000 on Dalal.

On April 30, 1993, Special Judge S N Variava, who is now a Supreme Court Judge, had held Dalal guilty under Section 138 of Negotiable Instruments Act and had sentenced him to one-year rigorous imprisonment with a fine of Rs 100,000.

The court had also said that in case of non-payment of fine Dalal would undergo further rigorous imprisonment of three months.

The complaint against Dalal was filed by the bank through its director Badrinath Banerjee alleging that four cheques for Rs 270 million, Rs 145 million, Rs 170 million and Rs 199.5 million given by Dalal to the bank were dishonoured.

The bank had said that these cheques were given by Dalal in discharge of his liability to the bank arising from differences in the contract rates and delivery rates in transaction of securities undertaken by the bank at his instance.

When the cheques were dishonoured, the bank on June 1, 1992 issued a notice to Dalal to pay up the money within 15 days' time.

The prosecution alleged that the accused failed to pay the amounts within 15 days thereafter and thus committed the offence punishable under section 138 of Negotiable Instruments Act.

The Special Court in 1993 had said that it has to take judicial note of the fact that there had been a major fraud in the country following which the court was established.

Terming the securities scam as a major blow to the economy of the country, the special court had said "the accused is guilty under section 138 of the NI Act.

"I, therefore, hold that the accused be punished with rigorous imprisonment for a term of one year and a fine of Rs 100,000, in default of which he would undergo further rigorous imprisonment of three months," Justice Variava had said in 1993.

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