The distance of the arm swing path is much longer for underhand. Therefore, the same acceleration would produce a larger final velocity with the same force. The unofficial record of underhand pitch is well over 100 mph.
The reason that overhand pitching is used in Baseball is for greater spin control, which is nearly impossible in an underhand throw. The strongest professional pitchers can throw up to 105 mph.
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Law 24.1b states "Underarm Bowling shall not be permitted except by special agreement before the match" So no, underarm bowling isn't allowed unless both captains agree to allow it before the game. If the captains did agree the ball could only bounce once before it reaches the batsman (Law 24.6)
Yes you do throw it on the ground to ball it. If it doesn't bounce it's a full toss which makes a batsmen easy to hit.