LAW FOR ALL

Unauthorized Adjustments not valid - Defendant No. 1, the Hongkong & Shanghai Banking Corporation Ltd., a Company incorporated under the laws of Hong Kong, aggrieved by the judgment and decree dated 30th of June, 2004 passed by the Special Court (Trial of Offences relating to Transaction in Securities), Bombay in Suit No. 11 of 2002 decreeing the plaintiff’s suit for a sum of Rs. 18,59,71,808.22/- along with interest at the rate of 15% has preferred this appeal.= Plaintiff Canbank Financial Services Ltd., respondent no. 1 herein filed the suit seeking a decree directing defendant no. 1 to pay to the plaintiff a sum of Rs.33,13,42,781.62/- with further interest thereon at the rate of 24% per annum compounded quarterly from the date of the suit till realization. It is the assertion of the plaintiff that defendant no. 1 was not justified in adjusting the amount paid by the plaintiff for purchase of bonds towards transactions between defendant no. 1 and Canbank Mutual Fund. The plaintiff has alleged that the transaction between defendant no. 1 and Canbank Mutual Fund are totally unconnected with the transaction between plaintiff and defendant no. 1. Whether Defendant prove that the said pay order for Rs. 18,59,71,808.22 was issued by Plaintiffs on behalf of CMF as alleged in para 8 of Written Statement?” whether defendant no. 1 has established that the payment that was made by the plaintiff to it on 24th of June, 1991 was on behalf of the Canbank Mutual Fund? - It is the specific case of defendant no. 1 that the broker informed it that the plaintiff has made payment on behalf of Canbank Mutual Fund. However, the letter dated 25th of February, 1993 of the broker to defendant no. 1 shows that on 24th of June, 1991 the Coal India bonds were sold by defendant no. 1 to the plaintiff and not to Canbank Mutual Fund. From the aforesaid it is evident that defendant no. 1 has not been able to prove that payment was made by the plaintiff on behalf of Canbank Mutual Fund. The natural corollary thereof is that the payment was made by the plaintiff to defendant no. 1 to purchase the bonds. It is not the case of defendant no. 1 that it had delivered the bonds to the plaintiff. Therefore, we are in agreement with the reasoning and the conclusions arrived at by the trial court and find no reason to interfere with the same.