HARSHAD SHANTILAL MEHTA Vs. CUSTODIAN

JUDGEMENT

(1.) The Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 is a special Act with its own special problems. The offences it deals with involve amounts of unusual magnitude procured by brokers from banks and financial institutions. Unfortunately, the proceedings before the Special Court, which was set up for a quick prosecution or adjudication of claims have been trapped in unusual legal and interpretational difficulties generated by the casual drafting of the Act that leaves much to the skills and good sense of the Courts. The present appeals before us relate to the interpretation of Section 11 of the Act.

(2.) Civil Appeal No. 5225 of 1995 is filed by the Custodian appointed under the provisions of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 against a judgment and order of the Special Court Judge dated 20-2-1995. The appeal is filed by the Custodian pursuant to directions contained in the impugned judgment itself. The other appeals have been filed by various notified persons under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (hereinafter referred to as the 'Special Court Act') from the same judgment and order of the Special Court Judge. A writ petition challenging the constitutional validity of Section 11 of the Special Court Act pending in the Delhi High Court has also been transferred to this Court for consideration along with these appeals, as common questions of law arise. All these appeals along with the transferred case have been heard together. We have also heard various intervenors in these appeals.

(3.) The Special Court has observed that it has been functioning since June 1992. In respect of two notified parties, namely, the Harshad Mehta Group and Fairgrowth Financial Services Ltd., the time is approaching for distribution of their assets under Section 11 of the Special Court Act, 1992. In view of the different possible interpretations of the provisions of Section 11, the Special Court has raised certain questions of law. After hearing all concerned parties, the Special Court has answered these questions in the impugned judgment, somewhat in the fashion of an Originating Summons. The Custodian has raised certain additional questions which arise in interpreting and implementing Section 11 of the Special Court Act. The questions raised by the Special Court are as follows: