New Delhi, May 7 (IANS) The Supreme Court Friday dismissed appeals by the three women relatives of late stock broker Harshad Mehta challenging the special court's order directing attachment of their properties to liquidate his liabilities.The apex court bench of Justice P. Sathasivam and Justice B.S. Chauhan said the assets of the family members of Harshad Mehta, who may not be directly linked to illegal transactions, but are the beneficiaries of the same could be attached to recover the outstanding dues to meet his Mehta's liabilities.

While dismissing the appeals by Harshad Mehta's mother Rasila Mehta, widow Jyothi Mehta and sister-in-law Rina Mehta, the court while going through their income-tax assessment from 1988-89 to 1993-94 said that the "appellants are housewives having no independent source of income".

Speaking for the bench, Justice Sathasivam said, "It is impossible for such persons to have such huge amounts of money unless they were the beneficiaries of monies diverted by late Harshad Mehta and his other family members who were notified and firms belonging to the Harshad Mehta Group."

"The appellants have not been able to reveal their source of income either to the Custodian or to the Income Tax authorities (for acquiring these properties)," the judgment said.

In 1988-89 all the three appellants filed an income tax return of Rs.2,005/- only but in 1993-94 it was a whopping Rs.4,46,40,586/, while in 1989-90 the return was zero.

The properties in question for attachment are eight flats Spread over two floors and
10,400 sq ft, these interconnected flats at Madhuli Co-operative Society occupied by the extended Mehta family.

Upholding the orders of the special court that was set up to try cases of securities scam that had hit country's stock market in 1992, the judgment said that the "order of the Special Court does not suffer from any infirmity and there was sufficient material before the Custodian to arrive at a satisfaction that monies had been diverted by late Harshad S. Mehta to the appellants (his family members)."

The judgment further said "The Special Court, therefore, rightly held that the money and assets were diverted to the appellants by the brokerage firms who were notified parties."

It may be recalled that the Special Court in its attachment order had said: "In our opinion, the attachment of all the properties in terms of sub-section (3) of Section 3 of the Special Act is automatic. The said sub-section does not provide for any qualification that the properties which are liable to be attached should relate to the illegal securities transactions in respect of which the Act was enacted."

Dismissing the contention of the appellant ladies of Mehta family that the purchase of these properties had nothing to do with the money involved in clouded transactions in securities, the judgment referred to the letter to income tax authorities to which the appellant Rasila Mehta is a signatory where Harshad Mehta had said that the family is a joint Hindu family where all are living together and that the business is such that it requires very close control at the operational level.

While arriving at its conclusions, the apex court had also drawn on the findings of the Joint Parliamentary Committee, Inter Disciplinary Group and that of Jankiraman Committee.

The operative effect of the apex court verdict is upholding the government's notification to confiscate Harshad Mehta's assets in Mumbai that are valued at Rs.1,000 crore. Harshad Mehta had presided over the country's biggest securities scam in 1992 involving public financial institutions and a number of smaller and cop-operative banks and investors going broke.