A.K. MENON CUSTODIAN Vs. T.H. VAKIL

JUDGEMENT

(1.) The applicant in the above petition is the Custodian appointed under the Special Court (Trial of Offences Relating to Transactions in Securities) Act 1992 ("Torts Act"). The respondent no. 1 is a proprietary concern engaged in the stock broking business. Respondent no. 2 is a notified party under the said Act. Respondent no.3 was at all times the Managing Director of respondent no.2 and a notified party. Respondent no.4 was believed to be engaged in transactions with respondent nos. 1 to 3 and is also said to be liable thereunder.

(2.) As originally filed the Custodian sought various reliefs against respondent nos.1 to 3. Respondent no.4 has been impleaded in December 2001 pursuant to an order passed by the Special Court on 27th November, 2001. The petitioner-Custodian sought an order and decree against respondent no.1 directing him to pay to the Custodian on behalf of respondent no.2 a sum of Rs.3,44,12,538/- and interest thereon @ 24% p.a. from 5th August, 1992 or such earlier date when the said sum was believed to have been received by respondent no.1 from respondent no.2. Subsequently, post amendments and impleading respondent no.4, similar prayer clauses were directed against respondent no.3 and respondent no.4 jointly and severally. These reliefs are sought in the event the Court comes to the conclusion that respondent no.1 is not liable to pay the amounts claimed by the Custodian.

(3.) Having briefly dealt with the nature of the Petition, it will be appropriate to narrate the facts as set out by the Custodian. According to the Custodian, respondent no.1 is a debtor of respondent no. 2. Respondent no. 2 was notified under the Act on 5th August, 1992. Upon such notification, all his properties are deemed to be attached. The Custodian had filed Misc. Application no.86 of 1993 against respondent no.2 in which the Custodian sought disclosure of assets. An order came to be passed on 7th October, 1993 whereby a sum of Rs.3,44,12,538/- was shown as receivable by respondent no.2 from respondent no.1 as of 5th August, 1992. Vide a letter dated 30th July, 1994 Exhibit A to the application respondent no.1 was called upon to furnish the following information;