TMI Blog2009 (5) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... . MUKUNDAKAM SHARMA AND DR. B.S. CHAUHAN, JJ. JUDGMENT Dr. Mukundakam Sharma, J. - By filing the present appeal the appellant has challenged the judgment and order dated 5-3-2004 passed by the Special Court established under sub-section (1) of section 5 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 ( the Act ) whereby and whereunder the Special Court allowed the application filed by the Custodian (respondent No. 1 herein) thereby directing the appellant to pay to the Custodian an amount of Rs. 2,83,192 with interest at the rate of 18 per cent per annum from 22-7-1991 to 29-2-1992 which amount the Custodian would receive for and on behalf of respondent No. 2. 2. Shri B. Ratnakar, the father of the appellant was the Chairman and Managing Director of M/s. Fair Growth Financial Services Limited (for short the Company ) which is respondent No. 2 herein. There is no dispute with regard to the fact that the father of appellant was the Chairman and also In-charge of the aforesaid Company. He died on 2-2-1992. The appellant became the Director of the aforesaid Company immediately after the demise of his father. An order was place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h June, 1992, notify the name of such person in the Official Gazette. (3) Notwithstanding anything contained in the Code and any other law for the time being in force, on and from the date of notification under sub-section (2), any property, movable or immovable, or both, belonging to any person notified under that sub-section shall stand attached simultaneously with the issue of the notification. (4) The property attached under sub-section (3) shall be dealt with by the Custodian in such manner as the Special Court may direct. (5) The Custodian may take assistance of any person while exercising his powers or for discharging his duties under this section and section 4." 4. In terms of the aforesaid provision, M/s. Fair Growth Financial Services Limited was declared as a notified person. Sub-section (3) of section 3 empowers the Custodian to attach any property which could be either movable or immovable, or both, belonging to the notified person. The said property which is attached under sub-section (3) could be dealt with by the Custodian in such a manner as the Special Court direct in that regard. In order to comply with the statutory provisions, the Custodian (responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arked at S-25, Panchsheel Park, New Delhi-110 001. On further enquiry being made by the Custodian, it was found that the registration number found on the body of the vehicle was a fake one and, in fact, the same belonged to a Maruti Van registered. 6. Consequent thereto and pursuant to the statutory responsibility placed on the Custodian under the Act, the Custodian filed an application before the Special Judge. The appellant was served. The Special Court thereafter considered the said application. In the light of the submissions made on behalf of both the parties and on consideration of the records, it was found that the entire transaction was authorised by the appellant and that he was all along aware of the aforesaid transaction. Consequently, the application filed by the Custodian was allowed and the appellant was directed to pay to the Custodian the amount of Rs. 2,83,192 with interest at the rate of 18 per cent per annum from 22-7-1991. The amount of Rs. 10,00,000 was also deposited by the appellant during the course of hearing of the aforesaid application and the amount was directed to adjust from the said deposit. 7. Being aggrieved by the aforesaid order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istered temporarily in the name of the appellant. 11. It is an admitted position that subsequent thereto the jeep was delivered along with Temporary Registration No. HRU 4413 AT which is annexed as Annexure R-4. The name of the appellant appears against the name of the registered owner. In fact, the aforesaid documents were sent by the appellant himself to respondent No. 1 (the Custodian) under his letter dated 4-8-1998 informing the Custodian that one Mahindra Jeep is parked at S-25, Panchsheel Park, New Delhi-110001. The appellant, in that letter, had also stated that the ex-officials of M/s. Fair Growth Financial Services Limited informed him that the vehicle was supposed to be under hire purchase/lease agreement. 12. On appreciation of the aforesaid documents, the Custodian has come to a finding and conclusion that the appellant, being a Director of the M/s. Fair Growth Financial Services Limited of which his father was Chairman and Managing Director, was aware that the jeep had been purchased in his name for which consideration was paid by the M/s. Fair Growth Financial Services Limited. The premises S-25, Panchsheel Park, New Delhi-110 001 was previously occupied by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of respondent No. 2 which is quite evident from the delivery note referred to hereinbefore. Therefore, the nexus between the purchase of the vehicle and the involvement of the appellant in the deal is clearly established. 15. In view of the aforesaid discussion, we find no infirmity in the order passed by the Special Court. We uphold the said order but in the peculiar facts and circumstances of the case and taking into consideration the fact that the appellant himself informed the Custodian about the aforesaid vehicle we modify the order for payment of interest at the rate of 18 per cent per annum by directing that interest on the aforesaid amount of Rs. 2,83,192 shall be paid at the rate of 9 per cent per annum from 22-7-1991 to 29-2-1992. An amount of Rs. 10,00,000 is already lying deposited in terms of order passed which was deposited by respondent No. 1. The amount payable by the appellant, therefore, shall now be calculated in terms of this order and the said amount shall be adjusted out of the amount lying deposited. So far paragraph No. 21 of the judgment and order of the Special Court is concerned, we find no infirmity in the same and, therefore, the same is upheld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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