Important pointThe Special Court constituted under the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992, does not have power to condone the delay in filing a petition under Section 4(2) of the Act.

Headnote:Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992—Section 4(2)—Limitation Act, 1963—Sections 5 and 29(2)—Time limit for filing a petition for objection u/s 4(2) of the Act—Section 4(2) requires a person objecting to a notification issued u/s 3(2) to file a petition raising such objections within 30 days of issuance of such notification—Mandatory provision—Whether Special Court constituted under the Act has power to condone the delay in filing a petition u/s 4(2) of the Act—(No)—Provisions of Limitation Act have no application in relation to a petition u/s 4(2) of the Act—Section 29(2) of the Limitation Act does not apply to proceedings u/s 4(2) of the Special Courts Act—Appellant was notified along with others u/s 3(2) on 20-11-2001—On 23-11-2001, custodian informed the appellant that it had been notified and its properties stood attached—On 8-10-2002, appellant filed a petition of objection to the notification u/s 4(2) of the Act—Special Court was justified in rejecting the application solely on ground that it was filed beyond the period of limitation prescribed by sub section (2) of Section 4 of the Act.
       Held : The provision prescribing a time limit for filing a petition for objection under Section 4(2) of the Act is mandatory in the sense that the period prescribed cannot be extended by the Court under any inherent jurisdiction of the Special Court. Prescribed periods for initiating or taking steps in legal proceedings are intended to be abided by, subject to any power expressly conferred on the court to condone any delay. Thus the Limitation Act 1963 provides for different periods of limitation within which suits, appeals and applications may be instituted or filed or made as the case may be. It also provides for exclusion of time from the prescribed periods in certain cases, lays down bases for computing the period of limitation prescribed and expressly provides for extension of time under Section 5 in respect of certain proceedings. If the periods prescribed were not mandatory, it was not necessary to provide for exclusion or extension of time in certain circumstances nor would the method of computation of time have any meaning. Section 4(2) of the Act plainly read similarly requires a person objecting to a notification issued under sub-section (2) of Section 3 to file a petition raising such objections within 30 days of the issuance of such notification. The words are unequivocal and unqualified and there is no scope for reading in a power of Court to dispense with the time limit on the basis of any principle of interpretation of statutory provisions. (Paras 8 and 9)
       The mere fact that the Special Court may have been imbued with the same status of a High Court would not alter the situation. We are of the view that it was not necessary for Section 4(2) of the Act to use additional peremptory language such as “but not thereafter” or “shall” to mandate that an objection had to be made within 30 days. The mere use of the word “may” in Sections 4(2) of the Act does not indicate that the period prescribed under the Section is merely directory. The word `may’ merely enables or empowers the objector to file an objection. The language in Section 4(2) of the Act may be compared with Sections 4 and 6 of the Limitation Act, 1963. (Para 10)
       It is not for the Courts to determine whether the period of 30 days is too short to take account the various misfortunes that may be faced by notified persons who wish to file objections under Section 4(2) of the Act nor can the Section be held to be directory because of such alleged inadequacy of time. (Para 12)
       This brings us to the question whether the power to condone the delay in filing a petition under Section 4(2) exists in the Special Court. We have held that the statute itself does not provide for it. A possible source of the power could be Section 5 of the Limitation Act, 1963, provided it applies to the Act. Section 29(2) of the Limitation Act, 1963 provides for the application of the provisions of Section 4 to Section 24 of the 1963 Act including Section 5, to any special or local law which prescribes a period of limitation in respect of any suit, appeal or application different from the period prescribed under the Limitation Act. In other words, the general rule as far as special and local Acts are concerned, is that the specified provisions including Section 5 of the Limitation Act will apply provided the Special or Local Act provides a period of limitation different from that prescribed under the Limitation Act. There is an additional requirement viz that the Special/Local Act does not expressly exclude the application of the Limitation Act. (Para 16)
       It is enough for the purpose of this appeal to hold that Section 29(2) of the Limitation Act, 1963 does not apply to proceedings under Section 4(2) of the Special Courts (Trial of Offences Relating to Transactions in Securities), Act 1992. Since the appellant’s petition of objection had been filed much beyond the period prescribed under that Section, the Special Court was right in rejecting the petition in limine. (Para 23)

Judgment

Ruma Pal, J.—The question raised in this appeal is whether the Special Court constituted under The Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 (hereinafter referred to as ‘the Act’) has power to condone the delay in filing a petition under Section 4(2) of the Act.

2. The object of the Act as stated in the Statement of Objects and Reasons is to deal with the situation created by large scale irregularities and malpractices in transactions in securities indulged in by some brokers in collusion with the employees of various banks and financial institutions. In particular, the Act seeks to ensure speedy recovery of the funds which have been diverted from banks and financial institutions to the individual accounts of brokers. The other objectives of the Act are to punish the guilty and to restore confidence in and maintain the basic integrity and credibility of the banks and financial institutions.

3. With these objectives in view the Act provides for the appointment of one or more Custodians to take action against any person involved in any offence relating to transactions in securities for the period after 1st April, 1991 upto and including 6th June, 1992. In terms of sub-section (3) of Section 3 of the Act, the Custodian may notify the name of the such person in the Official Gazette. From the date of such notification, any property moveable or immoveable or both, belonging to any person so notified stands attached under Sub-section (3) of Section 3. Such attached properties may be dealt with by the Custodian in such manner as the Special Court may direct.

The Special Court was established under Section 5 of the Act. It has the same jurisdiction as a Civil Court inter alia in relation to any matter relating to any property attached under Sub-section (3) of Section 3 of the Act as well as in relation to transactions in securities entered into during the aforesaid period in which the person notified is involved as a party, broker, intermediary or in any other manner (Section 9-A(1)).

4. Sub-Section (2) of Section 4, (in so far as it is relevant) permits any person aggrieved by a notification issued under Sub-section (2) of Section 3 to file a petition objecting to the notification within 30 days of the issuance of the notification. The Special Court after hearing the parties may make such order as it deems fit on such petition. While dealing with such a case, the Special Court is not bound by the procedure laid down by the Code of Civil Procedure, 1908, but shall be guided by the principles of natural justice and, subject to the other provisions of the Act and of any Rules, the Special Court has the power and under Sub-section (4) of Section 9 to regulate its own procedure. Section 10(3) of the Act, provides for an appeal to this Court from any judgment, sentence or order of the Special Court within a period of 30 days from the date of such judgment etc. Under the proviso to Section 10(3) this Court has been empowered to entertain the appeal even after the expiry of a period of 30 days if the court is satisfied that the appellant had sufficient cause for not preferring appeal within the period of limitation. Section 13 provides that the provisions of the Act would have overriding effect over other laws. These, in short, are the provisions of the Act which are material for the purposes of this appeal.

5. The Act came into force on 6th June, 1992. The appellant was notified along with others under Section 3(2) on 20th November, 2001. On 23rd November, 2001, the Custodian informed the appellant that it had been notified under Section 3(2) of the Act and its properties stood attached with effect from the date of the notification. The appellant was requested to furnish the Custodian the details of its properties as on the date of the notification. In answer to the Custodian’s letter, the appellant asked for the reasons and circumstances which formed the basis of the Custodian’s decision to notif

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2004 Supreme(SC) 1318

Important pointThe Special Court constituted under the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992, does not have power to condone the delay in filing a petition under Section 4(2) of the Act.

Cases Referred (18)