JUDGMENT

Venkatachaliah, C.J.I.

1. M/s Kudremukh Iron Ore Company Limited, a Government Company, prefers this appeal under Section 10 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (for short the Act) against the order dated 26-8-1993 made by the Special Court at Bombay in Miscellaneous Petition No. 58 of 1993. By the said order the Special Court held that in relation to the transactions referred to and relied on by the appellant, it had no jurisdiction to exercise powers under the Act.

2. The appellant on various dates in July 1992 deposited with the Andhra Bank Financial Services Ltd. under what are called inter-corporate deposits aggregating to about Rs. 55 crores. The deposits were to carry interest ranging from 21% to 22%. It would appear that the Andhra Bank Financial Services Ltd. had, in turn, invested large sums of money said to be in the order of Rs. 240 crores, with a company called the Fairgrowth Financial Services Ltd. When the appellants deposits with M/s Andhra Bank Financial Services Ltd. fell due for repayment, the latter pleaded its inability to make immediate repayment on the ground that its own funds were locked up with the Fairgrowth Financial Services Ltd.

3. The said Fairgrawth Financial Services Ltd. was a notified person under Section 3(2) of the Act and accordingly the Special Court under Section 11 of the Act had jurisdiction to direct repayment of its liabilities. The appellant, it is not disputed, had no privity of contract with the said Fairgrowth Financial Services Ltd. However, on the stand of the Andhra Bank Financial Services Ltd. that its funds were, in turn, locked up with and retained by the said Fairgrowth Financial Services Ltd., the appellant moved the Special Court for a direction that the securities of the Fairgrowth Financial Services Ltd. in the hands of the custodian be directed to be sold and the proceeds disposed of in favour of the Andhra Bank Financial Services Ltd. and that out of the sums so found payable, the sum of Rs. 54 crores which was then due to the appellant together with accrued interest, be appropriated and applied for the discharge of the appellants claims.

4. The Special Court by its order dated 26-8-1993, now under appeal, declined to entertain the appellants prayer. It said :

"In my view, this Court can only adjudicate on claim in respect of properties belonging to notified parties. The petitioners claim against the 2nd respondent does not fall within the purview of the jurisdiction of this Court. This Court has no jurisdiction over such claims or dispute. It is for the petitioners to adopt such proceedings as they may be advised in the normal civil or criminal courts.

Petition disposed of on ground that this Court has no jurisdiction."

5. Shri Ramaswamy Iyengar, learned counsel for the appellant, urges that when financial transactions are so inextricably interwoven it is unrealistic to limit the identity of the notified person so narrowly. What determines the jurisdiction of the Special Court, says counsel, is not a mere technical, distinctive legal entities but the composite character which the degree of the subsumption of the funds impart to them. Learned counsel submits that, in this case, having regard to the nature of the large-scale involvement of Andhra Bank Financial Services Ltd. and its funds with the Fairgrowth Financial Services Ltd., the purpose of the Act would not be fulfilled by ignoring the character of these financial interrelations.

6. We are afraid, it may not be necessary to go into this proposition as to what extent and nature of interdependence may render the two apparently distinct legal entities to be reckoned as one for purposes of the Act. For one thing, the Special Court itself was not treated to any such argument. Secondly, no factual foundations necessary to compel an inference necessary to enable a piercing of the veil were laid before the Court. We do not, therefore, propose to examine this prop