KILLICK NIXON LTD Vs. CUSTODIAN

JUDGEMENT

(1.) These appeals are directed against the orders of interlocutory nature passed by the Special Court constituted under the provisions of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 (hereinafter referred to as 'the Act'). They are being disposed of by this common order since the question that arises for our consideration is one and the same.

(2.) M/s. Dhanraj Mills Private Limited in its ordinary course of business had advanced interest free loans to the appellant M/s. Killick Nixon Limited and its group of companies. In the year 1992, the Special Court found that M/s. Dhanraj Mills Private Limited, its Directors and their close associates indulged in fraudulent securities transactions resulting in siphoning of huge funds of various banks. The banks had gone into liquidation as a result of those fraudulent securities transactions. The Special Court also held that the end beneficiaries of the siphoned funds were the Directors of M/s. Dhanraj Mills Private Limited and Director of Bank of Karad which bank was used as a conduit for the fraudulent transactions.

(3.) M/s. Dhanraj Mills Private Limited was accordingly notified under the provisions of the said Act. On and from the date of notification, the properties, movable or immovable, or both belonging to any person notified under Sub-section (2) of Section 3 of the said Act shall stand attached, simultaneously with the issue of the notification. Be it noted that M/s. Dhanraj Mills Private Limited itself owned 33% of M/s. Killick Nixon Limited and the person in ultimate control, ownership and management of M/s. Killick Nixon Limited is one T.B. Ruia (who at all relevant points of time was Managing Director of M/s. Dhanraj Mills Private Limited) who was also notified under the Act.