January 17, 2007 9:50am CST
Mr. X said to be the common Director in various cos./ firms is a sole steel trader for a leading steel co. maintains accounts in the name of various associates with different Banks as well as with different branches of the same Bank. He lodges cheques worth a fewcrores every day & transfers funds in different accounts. Banker has obtained declaration that these are genuine trade transactions & are not kite flying operations/ accommodative nature. At the timeof opening of an a/c he does not enjoy any cr facility. Banker then sanctions him various need based credit facilities to the subjects upon which these inter firm transfers are discontinued. banker used toallow the drawings against clearing effects & used to charge interest for the same. Will these transactions constitute Kite Flying Transactions as alleged by the Bank & hold the party & Bak Manager responsible??