MANJIT SINGH SODHI Vs. THE CUSTODIAN

JUDGEMENT

(1.) Leave granted.

(2.) The appeal arises from a judgment dtd. 6/3/2020 of the Special Court constituted under the Special Court (Trial of Offences Relating to Transactions in Securities) Act 1992 (Act of 1992). The decision of the Special Court arises out of an execution application filed by the Custodian, the first respondent, being Execution Application No 1 of 2019.

(3.) Fairgrowth Financial Services Ltd (FFSL), the second respondent, is a company registered under the provisions of the Companies Act 1956. Raviraj Housing Corporation, the third respondent, had availed a short term loan of Rupees Twenty five lakhs from FFSL and agreed to repay it after 180 days with interest at the rate of 20 percent per annum. The first respondent is the custodian appointed by the Central Government under the provisions of the Act of 1992. The custodian notified the second respondent as a notified person under the provisions of Sec. 3(2) of the Act of 1992 [Sec. 3(2) The custodian many, on being satisfied on information received that any person has been involved in any offence relating to transactions in securities after the 1st day of April 1991 and on and before the 6/6/1992, notify the name of such person in the Official Gazette.]. The assets of FFSL stood attached with effect from 2/7/1992. The case of FFSL was that the third respondent had executed a promissory note on 14/10/1991 for the repayment of the loan and a letter of undertaking-cum-indemnity reiterating its commitment to repay Rupees twenty five lakhs. FFSL instituted Miscellaneous Petition No 15 of 2000 against the third respondent for the recovery of an amount of Rupees twenty five lakhs, together with interest at the rate of twenty per cent. On 28/3/2003, the Special Court directed the third respondent to pay to FFSL a sum of Rs.63.86 lakhs, together with interest at twenty per cent on the principal sum of Rupees twenty five lakhs from the date of the institution of the petition till payment and/or realization.