Nhb-Anz Row

S Venkitaramanan in his reply A Clarification 26th May says the market practice of crediting account payee cheques to the customers account without authorisation is not proved and is quoting minority arbitrators view to prove his point. But Venkitaramanan has chosen to selectively quote minority arbitrators opinion. Given below are relevant extracts from the majority arbitrators award:

There were several transactions in which money passed from Harshad Mehta to NHB and from NHB to Mehta. Even cheques other than nine in dispute were similarly drawn in favour of ANZ Grindlays Bank crediting Mehta which has not been disputed by NHB. NHB had records revealing who the real counterparty was in such high-value transactions.

We deprecate the NHBs attitude in not disclosing the name of the beneficiary of these cheques, if according to NHB the beneficiary was not Mehta. There were several transactions between Mehta and NHB and as cheques were admittedly handed over to Mehta, it is clear that ANZ cannot be said to have acted negligently in crediting the cheques to Mehtas account.

The arbitrators have pointed out that narration on some of the relevant vouchers of NHB covered by transactions were erased or struck off and substituted by other description. Arbitrators have observed System of controls at NHB was grossly inadequate and that Books of Accounts of NHB admittedly contained false entries and that several transactions recorded in the books of accounts of NHB were unsupported by any document.

The findings of majority arbitrators speak for themselves which for obvious reasons Mr Venkitaramanan seems to have overlooked.