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Court asks warring parties to pay `12L for misusing state machinery

It’s an order that could discourage people from using state machinery to settle private disputes. The Bombay high court has asked financial services and real estate firm India Bulls and industrialist Sanjay Dalmia to pay Rs6 lakh each to the government after the two parties arrived at an out-of-court settlement in a dispute over securities worth more than Rs 200 crore.

mumbai Updated: Mar 31, 2012 01:13 IST
Mohan K Korappath
Mohan K Korappath
Hindustan Times

It’s an order that could discourage people from using state machinery to settle private disputes. The Bombay high court has asked financial services and real estate firm India Bulls and industrialist Sanjay Dalmia to pay Rs6 lakh each to the government after the two parties arrived at an out-of-court settlement in a dispute over securities worth more than Rs 200 crore.

The case concerns various loans provided by India Bulls to Sanjay Dalmia and other companies he was associated with. India Bulls stated that in 2005, it provided loans against security shares and other mortgage deeds provided by companies Dalmia represented. However, some of the mortgage deeds were not sufficiently stamped and by 2008 the outstanding amount was much more than the security provided. The company subsequently lodged an FIR against Dalmia for cheating and criminal conspiracy. Dalmia, in response, filed a petition to have the FIR quashed.

Meanwhile, the Economic Offences Wing (EoW) stated that Dalmia was not cooperating with the probe. In 2009, the police issued a 72-hour notice for arresting Dalmia.

When the matter came up for hearing on Thursday, the court was informed that the parties had reached a settlement and the complaint should be quashed.

Subsequently, justice Abhay Oka quashed the FIR lodged by India Bulls against Dalmia.

However, public prosecutor PA Pol strongly argued that this was a blatant misuse of the police machinery, for which the parties should compensate. The court asked the two parties to pay Rs6 lakh each. “The court has directed them to pay Rs10 lakh to the state government and Rs2 lakh to the high court legal aid cell,” Pol said.

Petitioner’s lawyer Mahesh Jethmalani confirmed that the parties had settled the case and that Dalmia had refunded the amount.

First Published: Mar 31, 2012 01:12 IST