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PETITIONER: MINOO MEHTA

       Vs.

RESPONDENT: SHAVAK D. MEHTA

DATE OF JUDGMENT:       15/01/1998

BENCH: S.B. MAJMUDAR, M. JAGANNADHA RA.

ACT:

HEADNOTE:

JUDGMENT:                       J U D G M E N T S.B. Majmudar, J.      Leave granted.      We have heard learned counsel or the parties. The short questions involved  in this  appeal in  as  to  whether  the Special Court,  functioning  under  the  provisions  of  the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (hereinafter referred to as ’the Act), has jurisdiction  to entertain  and try  the  criminal  case filed by respondent complaint against the appellant-accused. The Special  Court consisting of learned Single Judge of the High Court  of Bombay  has held  that  the  proceedings  are within   its   jurisdiction.   The   appellant-accused   has challenged the  said decision  in the  present appeal. A few introductory facts leading to these proceedings are required to be noted at the outset. Background Facts      The  respondent-complainant   is  the   uncle  and  the appellant-accused is  his nephew.  It is  the  case  of  the respondent-complainant who is aged about 85 years that he is an architect  by profession.  That accused is the son of his brother, that  is, his nephew. He filed a criminal complaint under Section 409 of the Indian Penal Code (‘IPC for short). We will  refer to  the respondent as the complainant and the appellant  as  the  accused  in  the  latter  part  of  this judgment. The complainant’s case is that he and his daughter Ms. Feroza Parvez Driver held shares numbering 1200 of Great Eastern Shipping Company Limited. The complainant has no son and the  accused being  his nephew  and close  relative,  he handed over  the shares  with transfer  forms to the accused for arranging  the sale  thereof through reliable broker and to pay  the sale  proceeds to the complainant. This was done somewhere in  the month  of December 1991. It is the case of the complainant that he signed and executed various transfer forms, so  also his  said daughter  Ms. Feroza to facilitate the transfer thereof in the name of prospective buyer.      The complainant  further  proceeds  to  state  that  he expected the  accused to  pay him  the sale  proceeds of the said shares  in due  course. However,  for quite a long time there was  no response  from the accused. The complainant on

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various occasions  made enquiries with the accused about the sale of  the said shares. However, the accused, according to the complainant,  put off and shirked the matter saying that the time  was not  opportune for  the sale  of  the  shares. Thereafter, the  accused began to avoid the complainant. The complainant, therefore,  felt that  something was a miss and enquired with  M/s, Tata Consultancy Services who were Share Registrars of  M/s .  Great Eastern  Shipping Co. Ltd. about the shares  and on  02nd January  1993 the  complainant  was replied that  the shares  in question were already sold out. The complainant also came to know the name of the sub-broker through whom  the said shares were sold, i.e., Mr. Paresh B. Patel who  was originally  named  as  accused  no.2  in  the complaint. The  complainant then  made enquiry with the said sub-broker and from him he came to know that the accused had already  arranged   the  sale   of  the   said  shares.  The complainant  thereafter   enquired  with   the  accused  and confronted him  with the  information which  the complainant had gathered.  The accused  also executed  certain  writings admitting the  receipt of  the shares  from the complainant, sale thereof, etc. He also promised to pay the sale proceeds to the complainant. However, he did not do so.      It is   in these circumstances that the complainant has filed this  complaint with  a  case  that  the  accused  had committed offence  of criminal breach of trust and dishonest misappropriation of  the securities. The compiling was filed by the complainant before the Special Court both against the appellant as  well as  accused no.2 Paresh B. Patel. However no charge  is framed  by the  Special Court  against accused no.2. Hence  he is out of picture. The complaint, therefore, survives only  against the  present appellant,  accused no.1 who is  now the  sole accused.  It may  be  noted  that  the complaint was  filed by  the respondent-complainant  on 13th April 1994  before  the  Special  Court  for  the  aforesaid alleged offence.  The said  case was  registered as  Special Case No.1  of 1995.  The Special Court issued summons of the appellant and framed charge against the appellant as under : "CHARGE      I, Justice  M.S. Rane, Judge, Special Court, Mumbai, do      hereby charge  you Minoo  Mehta, the accused herein, as      under:      That  in   or  about  December.  1991  securities  viz.      distinctive number  of 1200  shares  of  Great  Eastern      Shipping Co.  Ltd., belonging to the complainant Shavak      D. Mehta  and his daughter Ms. Feroza P. Driver, as per      particulars mentioned hereinbelow i.e.      Distinctive No.                 No. of Shares      1   31202266 - 31202415           150      2   31202116 - 31202265           150      3   31202416 - 31202440           25      4   25752406   25752430           25      5   25752431   25752455           25      6   25752456   25752480           25      7    8699052    8699151           100      8   24690929   24691028           100      9     823796     823895           100      10     33201      33300           100      11    405952     406051           100      12    541991     542090           100      13   7720240    7720339           100      14   4715055    4715154           100                                   ---------------                                        1200                                   ---------------      were entrusted  by him  to you  for selling the same on

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    his behalf and paying the proceeds of the sale of those      shares to him which shares you did sell in January 1992      and did dishonestly misappropriate and convert the sale      proceeds of the sale amounting to Rs. 1,10,00/- to your      own use  and you  did thereby  commit  the  offence  of      criminal branch  of  trust  in  deletion  to  the  said      transaction in  the said  securities  punishable  under      Sec. 406  of I.P.C.  and within  my cognizance  and  I,      therefore, direct  that  you  be  tried  for  the  said      offence."      The accused  moved an application No.240 of 1997 in the said case  before the  Special Judge  and contended that the Special Court had no jurisdiction to try the alleged offence against the  appellant.  The  learned  Special  Judge  after hearing the  parties concerned  held by his order dated 10th July 1997 that the complaint as filed by the complainant was maintainable  before   the  Special   Court   and   he   had jurisdiction to try the appellant for the offence with which he was  charged. It is this order of the Special Court which is brought  on the  anvil of  scrutiny of  this Court in the present appeal. Statutory Scheme      In order  to appreciate  the grievance of the appellant accused it is necessary to note the statutory schemed of the Act under  which the  Special Court  is functioning  and has entertained the  complaint of  the respondent - complainant. The Act  No. 27  of 1992 was assented to by the President of India on 18th August 1992. It was brought in force from 06th June 1992  with retrospective  effect as  an  ordinance  had preceded it from that earlier date. It was on 06th June 1992 that a  custodian was  appointed under Section 3 of the Act. The Act  is to  provide for establishment of a Special Court for the  trial  of  offences  relating  to  transactions  in securities and for matters connected therewith or incidental thereto. The  Statement of  objects and  Reasons of the said Act provides as under:      "Statement of Objects and Reasons.-      In the course of the investigations      by the Reserve Bank of India, large      scale      irregularities       and      malpractices   were    noticed   in      transactions in both the Government      and other  securities, indulged  in      by some  brokers in  collusion with      the employees  of various banks and      financial  institutions.  The  said      irregularities and malpractices led      to  the  diversion  of  funds  from      banks and financial institutions to      the individual  accounts of certain      brokers.      (2) To  deal with the situation and      in  particular   to  ensure  speedy      recovery   of   the   huge   amount      involved, to punish the quality and      restore confidence  in and maintain      the basic integrity and credibility      of   the    banks   and   financial      institutions  the   Special   Court      (Trial  of   Offences  Relation  to      Transactions     in     Securities)      Ordinance. 1992, was promulgated on      the 6th  June, 1992.  The Ordinance      previous for the establishment of a      Special Court  with a sitting Judge

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    of a High Court for speedy trial of      offences relating  to  transactions      in  securities   and  disposal   of      properties   attached.    It   also      provides for  appointment of one or      more custodians  for attaching  the      property of  the offenders  with  a      view to  prevent diversion  of such      properties by the offenders.      (3) The  Bill seeks  to replace the      said Ordinance."      Section 2  is  the  definition  section.  Section  2(b) defines ‘Custodian;  to mean, ‘the Custodian appointed under sub-section (1)  of Section  3’, while  Section 2(c) defines ‘securities’ as under:      " "securities" includes,-      (i) shares,  scrips, stocks, bonds,      debentures, debenture stocks stock,      units of  the Unit.  Trust of India      or any  other mutual  fund or other      marketable  securities  of  a  like      nature in  or of  any  incorporated      company or other body corporate;      (ii) Government securities; and      (iii)  rights   or   interests   in      sectaries;"      Section 2(d)  defines ‘Special  Court’  to  mean,  ‘the Special Court  established under  sub-section (1) of Section 5’.  Section   5  sub-section   (1)  empowers   the  Central Government, by  notification in  the  Official  Gazette,  to establish a  court to   be  called the  Special Court.  Sub- section (2)  thereof lays does that ‘the Special Court shall consist of  a sitting  Judge of  the High Court nominated by the Chief  Justice of the High Court within the local limits of whose  jurisdiction the  Special Court  is situated, with the concurrence  of the Chief Justice of India’. The learned Single Judge  who has  passed the  impugned  order  is  duly constituted as  a Special Court as per Section 5 sub-section (2) of  the Act. Section 3 of the Act refers to ‘appointment and functions  of the  Custodian’. The said Section ready as under:      "3.  Appointment  and  function  of      Custodian:-      (1)  The   Central  Government  may      appoint one or more Custodian as it      may deem  fir for  the purposes  of      this Act.      (2) The  Custodian  may,  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  6th 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

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    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   pores   or   for      discharging his  duties under  this      section and sec.4."      Section 4  of the act deals with contracts entered into fraudulently  that   may  be   cancelled  and   under   what circumstances why  can be cancelled. Sub-section (1) thereof empowers  the  Custodian  on  being  satisfied,  after  such enquiry as  he may  think fit,  to cancel  any  contract  or agreement entered  into at  any time  after 1st day of April 1991 and  on and before the 6th June 1992 in relation to any property of  the person  notified under  sub-section (2)  of Section 3  that has  been entered  into fraudulently  or  to defeat the  provision of  the Act.  Section  6  of  the  Act empowers the  Special Court  to have  connivance of  and try such cases  as may be instituted before it or transferred to it as  thereinafter provided. It is obvious, therefore, that the Special  Court can take connivance of and try both civil and criminal  cases which may be instituted before it or may be transferred  to it  under the  Act. Then  comes Section 7 which deals  with the  jurisdiction of the Special Court and on the  true construction  of which  the present controversy can be decided. It reads as under :      "7. Jurisdiction  of Special Court.      -     Notwithstanding      anything      contained in  any  other  law,  any      prosecution  in   respect  of   any      offence referred  to in sub-section      (2) of  Sec. 3  shall be instituted      only in  the Special  Court and any      prosecution  in   respect  of  such      offence  pending  any  court  shall      stand transferred  to  the  Special      Court. "      Section 8  deals the  ‘Jurisdiction of Special Court as to Joint  trials’ and lays down that the Special Court shall have jurisdiction to try any person concerned in the offence referred to  in sub-section  (2) of  Section 3  either was a principal, conspirator or abettor and all other offences and accused persons  as can  be jointly  tried therewith  at one trial in  accordance with   the  Code. Section  9 deals with ‘Procedure and  powers of  Special Court’  with which we are not concerned. However, Section 9-A which was brought on the Statute Book  by Amending Act 24 of 1994 w.e.f. 25th January 1994 is  required to  be noted. Sub-section (1) thereof lays down that ‘on and from the commencement of the Special Court (Trial of  Offences Relation  to Transactions in Securities) Amendment Act,  1994, the  Special Court  shall exercise all such jurisdiction  powers and authority as were exercisable, immediately before  such commencement  by any civil court in relation to any matter or claim (a) relating to any property standing attached  under sub-section  (3) of  Section 3; (b) arising out of transactions in securities entered into after the 1st  day of  April 1991, and on or before the 6th day of June 1992,  in which a person notified under sub-section (2) of Section 3 is involved as a party, broker, intermediary or in other  manner’.  Section  11  deals  with  ‘Discharge  of liabilities’ and  lays down  by sub-section (1) thereof that ‘Notwithstanding anything  contained in  the  Code  and  any

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other law for the time being in forch, the Special Court may make such  order as  it may deem fit directing the Custodian for the  disposal of  the property  under attachment’.  Sub- section     (2)  of   Section  11  provides  for  paying  or discharging in  full, as  far as  may be  in the   order  of priorities laid  down by  that sub-section.  Amongst others, clause (b)  of sub-section  (2) of  Section 11  provides for paying and discharging of all amounts due from the person so notified  by   the  Custodian   to  any  bank  or  financial institution  or   mutual  fund.   Section  13  provides  for overriding  effect  of  the  Act  and  lays  down  that  the provisions of  the Act  shall  have  effect  Notwithstanding anything inconsistent  therewith contained  in any other law for the  time being  in force  or in  any instrument  having effect by virtue of any law, other than, this Act, or in any decree or  order of  any Court, tribunal or other authority. It is  in the  background of  the aforesaid statutory scheme that the  question posed  for our  consideration has  to  be resolved. Consideration of the Question      It is  no doubt  true that  the complaint is filed by a private party  complainant uncle  against  his  nephew,  the present appellant-accused alleging that thought he entrusted the accused  with the  task of selling off his shares during the relevant period of time the accused instead of returning the sale  consideration arising  out of the said transaction to the  complainant had  misappropriated the said amount. It is also true that neither the complainant nor the accused is a notified  person as  per Section  3 sub-section (2) of the Act. However  on a  conjoint reading  of sub-section  (2) of Section 3  and Section 7 of the Act the moot question arises whether an  accused who  is not  a notified  person  can  be proceeded against  before the Special Court if it is alleged that -  (i) he is involved in any transaction in securities: and (ii)  and such  involvement of the accused arises during the relevant  period, i.e., from 1st April 1991 to 16th June 1992. So  far as  there two  requirement for  application of Section 7  read with sub-section (2) of Section 3 of the Act are concerned  there is no dispute between the parties as in the complaint  it is  clearly alleged  that the  accused was entrusted with  the work  of selling  off the  complainant’s shares in  the company  concerned and  that the  accused had allegedly  carried  out  the  said  transaction  during  the relevant period and had realised the proceeds by the sale of these shares  between December  1991 and January 1992. It is also not  in dispute  that  shares  would  fall  within  the definition of  ‘securities’ as mentioned in Section 2 clause (c). However  the short grievance on behalf of the appellant is that  as the appellant - accused is not a notified person as per  Section 3  sub-section (2)  of the  Act the  Special Court will  have no  jurisdiction to try him for the offence under Section  409 of  IPC but  it is  the regular  criminal court which can try such an offender. Rival Contentions      Learned senior counsel, Shri Raju Ramachandran, for the appellant in  this connection  vehemently to  deal with such properties in such manner as Special Court may direct as per sub-section  (4)   of  Section   3  of   the  Act.  On  such notification of  the person  concerned the  Custodian  would also got  jurisdiction and  power to  cancel  contracts  and agreements  entered  into  by  such  notified  person  after following the  procedure of Section 4 sub-section (1). It is also true  that on  end from the commencement of the Special Court  (Trial   Of  Offences  Relating  to  Transactions  in Securities) (Amendment) Act, 1994 as laid down by Section 9-

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A pending  suits against  such notified persons contemplated by the  special provisions  would also stand transferred for adjudication to  the Special  Court. Thus  so far  as  civil suits  are   concerned  the   proceedings  pending   on  the commencement of Amending Act of 1994 would stand transferred provided in the meantime after  the main Act came into force in 1992  such defendants  have got  notified under Section 3 sub-section (2)  of the  Act. But the is a scheme pertaining to civil actions against notified persons. it has also to be kept in  view that  as Section  9-A was inserted with effect from 25th  January 1994.  it was  possible  to  notify  such defendants under Sections 3 sub-section (2) by the Custodian who would  be appointed  on and  after 06th  June  1992.  If during this  period such notifications are made civil causes pertaining to  such notified  persons would get converted by the sweep  of Section   9-A.  No such scheme is envisaged by Section 7.  So far  as  the  offences  are  concerned  on  a conjoint reading  of Section  3 sub-section  (2)  read  with Section 7  of the Act it cannot be said that unless a person is notified  he cannot  be trio for the offence contemplated by Section  3 sub-section  (2) by  the  Special  Court.  The offence referred to in sub-section (2) of Section 3 which is within the  sweep of Section 7 of the act must be an offence committed by  any person  and must  have the  following  two characteristics: 1.   Such offence  must relate to transactions in securities      and 2.   such offence  should be  alleged to have been committed      between 01st  April 1991  and on  or before  06th  June      1992.      These are  the special  classes of  offences which  are carved out  by the  Legislature for being dealt with only by the Special  Court and not by ordinary court. Once these two requirements  are  satisfied  the  Special  Court  will  get jurisdiction to try such offences and, therefore, constantly to try  the  accused  concerned  who  are  alleged  to  have committed such  offences consumable by the Special Court. In this connection one additional aspect is worth nothing. When the principal  accused is  the  notified  person  even  non- notified accused  can be  tried jointly  with such principal accused as  per Section  8 if  they were jointly involved in such offences.  But even  that apart  if the  accused is the sole accused  and he  is not  a notified  person and  if any criminal case  is pending  against such  an accused  in  any court when  the Act can into force then even such a criminal case provided two requirements of sub-section (2) of Section 3 qua  such offence  as  seen  earlier  are  satisfied  will automatically stand transferred to the Special Court as laid down by  the latter  part of  Section 7.  It is obvious that after the  Act  came  into  force  on  06th  June  1992  the Custodians would  get appointed as per Section 3 sub-section (1) but  the offences  contemplated by  sub-section  (2)  of Section 3 fall within the larger period from 01st April 1991 which extends upto 06th June 1992. Therefore, it is possible to visualise  that a criminal case may be pending against an accused involved  in offence  relating  to  transactions  in securities even  prior to  06th June  1992 when the Act came into force  with retrospective  effect. Therefore  from 01st April 1991 till 05th June 1992 the accused who is said to be involved in  such transactions  would be a person who is not notified as  there would  arise no occasion to notify such a person by  the Custodian  as the  latter could not have been appointed at  any time  prior to  06th June 1992. Therefore, such pending  criminal cases against the accused involved in offence relating  to transactions in securities between 01st

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April 1991  and 06th  June 1992  would necessarily  refer to those accused  of such offence who were non-notified persons and still  by force  of Section  7 second  part such pending cases against  non-notified accused if the offences in which they are  said to  have  been  involved  satisfied  the  two requirements as laid down by Section 3 sub-section (2) would automatically stand  transferred for  trial to  the  Special Court. If  learned senior counsel for the appellant is right an anomalous situation would arise regarding jurisdiction of the Special  Court with effect from O6th June 1992. Criminal cases pending  earlier wherein  the accused are not notified persons could be  tried by the Special Court under Section 7 as such  pending cases would automatically stand transferred to the  Special Court.  But in  cases registered  after  the appointment of  the Custodian  under Section  3  sub-section (1), only the notified persons could be tried by the Special Court for  similar  type  of  offences  as  contemplated  by Section 3  sub-section (2).  That would  create  a  patently anomalous situation  and would make the operation of Section 7 a truncated and lopsided one. If the Special Court can try transferred criminal  cases which  were filled prior to 06th June  1992  in  regular  courts  wherein  accused  were  not notified   persons as  such cases would stand transferred to it for  trial automatically on coming into force of the Act, then of necessity it must be held that even if such criminal cases are  filed after coming into force of the Act, against non-notified persons  involved in  similar type  of offences they could  be tried  by the  Special Court.  Any other view would  result  in  creation  of  two  conflicting  types  of jurisdiction for  the Special  Court functioning  as per the same Section 7.      Even apart  from this  aspect it  is also  necessary to note that  under Section  3 sub-section  (2) a Custodian may notify such  person in  Official Gazette.  Take   a case  in which the  Custodian, for  reasons best  known to him, might not have  notified such  a person and still such a person is alleged  to   be  involved   in  an   offence  relating   to transactions in  securities during  the relevant period from 01st  April   1991  and   06th  June   1992.   Under   these circumstances if learned senior counsel for the appellant is right such  a person  would get an immunity from being tried before the  Special Court  for such  an offence only because the Custodian  on account  of his discretion or carelessness or otherwise  has not  thought it fit to exercise his powers under Section  3 sub-section  (2) of notifying such a person in the Official Gazette. In such an eventuality jurisdiction of the  Special Court  will depend upon the volition of  the Custodian under Section 3 sub-section (2) in connection with such an  accused. If  the notifies him, accused can be tried by the  Special Court.  If he  does not  notify him  such an accused cannot  be tried for the offence which may otherwise fulfil basic  requirements of  Section  3  sub-section  (2). Jurisdiction of  the Special Court as laid down by Section 7 cannot depend upon mere fancy and volition of the Custodian. On  a  conjoint  reading  of  Section  3  and  its  relevant provisions,  therefore,  it  must  be  held  that  once  the Custodian notifies  a person  in the  Official Gazette under sub-section  (2)   of  Section  3  he  gets  the  power  and jurisdiction to  deal  with  such  person’s  properties  and transactions as  laid down  under Section  3 sub-section (4) and Section  4 and  in such  a case  even the civil suits of notified persons  would stand transferred as per Section 9-A of the Act. But so far as criminal proceedings are concerned even if  the accused is not notified still the Special Court will have  jurisdiction under  Section 7  to deal  with  the

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offences alleged  to have  been committed by such an accused if the earlier mentioned two basic requirements of Section 3 sub-section 92)  are satisfied.  As the  aforesaid two basic requirements of  section 3 sub-section (2) read with Section 7 are  allegedly satisfied  in the present case and on which there cannot be any dispute it must be held that the Special Court at  Bombay had  jurisdiction to  entertain and try the present criminal case against the appellant.      However one  submission of  learned senior  counsel for the appellant in connection with second part of Section 7 of the Act is required to be noted. He submitted that this part of the  Section can be reconciled with the first part on the basis that  in pending  criminal cases  against non-notified persons and Special Court can have jurisdiction provided the Custodian notifies  them under  Section 3  sub-section  (2). Till that  time transferred  cases  will  have  to  be  kept pending. This  contention  cannot  be  countenanced  on  the express language  of second  part of Section 7 wherein it is laid down  that  there  would  be  statutory  and  automatic transfer of  such pending  criminal cases  on  the  date  of coming into  force of  the Act,  that is, O6th June 1992. On the contention  of learned  senior counsel for the appellant there would  be a hiatus and interregnum during which before transferring such  pending cases the accused concerned HS to be notified  or that  the Special  Court could  proceed with such transferred pending cases only after such notification. Such a  course, on  the express  language of  second part of Section 7 is contra-indicated.      Before parting  with this  case we  may state  that the learned senior counsel for the appellant also submitted that the offence  alleged against  the appellant was not relating to any  transaction in  securities during  the relevant time but qua the sale consideration alleged to have been received by the  appellant out  of the said transaction and for which alleged offence  under Section  409 prosecution is sought to be launched  against the appellant. It is difficult to agree with this  contention. A  conjoint reading of the recitals i the complaint  which obviously must be assumed to be true at this stage  would show  that the  accused is alleged to have entered into  transaction in  securities, namely, the shares during the  relevant period  and out of the said transaction is alleged  to have  received sale proceeds which he has not handed over  or transmitted to the complainant who claims to be entitled  to the said amount. Thus the offence alleged is certainly relating  to the transaction in securities as said to have been entered into by the accused during the relevant period.      Before parting with the present discussion we may refer to two  judgments of this Court on which reliance was placed by learned  senior counsel  for the appellant. A three Judge Bench of  this Court  in the  case of Canara Bank v. Nuclear Power Corporation   of India Ltd. & Ors. [(1995) Sup (3) SCC 81) was  concerned with the interpretation of Section 9-A of the Amending  Act of  1994. In  our view  the said  decision cannot be  of any assistance to the appellant in the present case for  the simple  reason that, as noted earlier, Section 9-A provides  for the  trial  of  civil  cases  wherein  the notified person  is the  defendant. Therefore, so far as the civil actions  are concerned  the statutory scheme reflected by Section  9-A would  operate of  its own and it is in this connection that  the observations  are made by this Court in paragraphs 27  and 33  of the  Report dealing  with notified persons and  how they  are to be proceeded against under the Act. The question with which we are concerned was not before this Court in the aforesaid decision. Our attention was also

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invited to a judgment of two learned Judges of this Court in the case  of Kudremukh  Iron  Ore  Co.  Ltd.  v.  Fairgrowth Financial Services  Ltd. &  Anr.   [(1994) 4  SCC 246]. Even that  case   will  have   no  application   in  the  present proceedings for  the simple  reason that Venkatachaliah, CJ. speaking for  the Court  in that case interpreted Section 11 and Section  3 sub-section  (2)  of  the  Act..  Section  11 regarding discharge  of liabilities  directly deals with the powers of  the  Custodian  for  property  under  attachment. Section 3  sub-section (3)  of the  act deals with automatic attachment of  the properties  of notified person once he is so notified  under sub-section  (2) thereof  and thereof and thereafter the  Custodian becomes entitled to deal with such attached properties  under sub-section  (4) of  Section 3 in such manner as the Special Court may direct. It in the light of this  provision that  Section 11  becomes relevant. Under Section 11  the Special  Court any  direct the  Custodian to dispose of the property under attachment wherein all amounts due from  the person  so notified can be paid to any bank or financial  institutional  or  mutual  fund.  Consequently  a conjoint reading   of  Section 3 sub-section (4) and Section 11 represents  a separate  statutory scheme  in  which  only notified person’s  attached properties can be dealt with for discharging the liabilities as provide in Section 11. So far as the  criminal cases  against accused involved in offences contemplate by  Section 3  sub-section (2)  are concern, the aforesaid  statutory   scheme  can   have  no   application. Consequently even  the judgment of this Court in the case of Kudremukh Iron  Ore Co. Ltd, (supra) cannot advance the case of the appellant any further.      In the  result it  must be held that the learned Single Judge of  the High  Court, as  a Special  Court,  was  quite justified in  passing the  impugned order in connection with the jurisdiction of the Court in entertaining and trying the criminal case  against the  appellant. Appeal is accordingly dismissed.