IMPORTANT POINT
Delay, if for reasons beyond control of the applicant, should be considered.

JUDGMENT

Gyan Sudha Misra, J. —

This appeal has been filed under Section 10 of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 (hereinafter referred to as ‘the Special Court Act of 1992’) challenging the order dated 28.11.2005 passed by the Special Court constituted under the Special Courts Act 1992 bearing Miscellaneous Application No. 536 of 2005 whereby the Special Court was pleased to reject the application summarily indicating that the application of the appellant for certification of shares by the respondent - Custodian had been received on 27.8.2005 after the cut off date for the certification due to which it could not be entertained.

2. The question inter alia which arises for consideration in this appeal may be crystallised and stated as to whether the Special Court was right in rejecting the application of the appellant-investor seeking certification of the tainted shares on the ground of delay due to violation of cut off date in spite of absence of a statutory provision to that effect as also the fact that the appellant-investor admittedly had no role or involvement in treatment of the alleged equity shares as tainted which required certification before payment of dividends on the same.

3. The substantial details and circumstances under which this appeal arises indicate that the appellant herein who is a small investor had purchased 100 equity shares of the respondent No.2 Company namely Reliance Industries Ltd. on 12.6.1989 and payment of the same was made through his share broker - respondent No.4 - Abex and Company which perhaps is not in existence now. However, the payment for purchase of the shares had admittedly been made through Union Bank of India by way of a demand draft. It is the case of the appellant herein that the respondent No.4 despite repeated enquiries never informed the appellant regarding the status of his shares and hence the appellant was absolutely in dark and had no clue about the same. The appellant in the meantime was also living abroad due to his professional obligation and could not ascertain the fate of his shares.

4. However, when the appellant finally approached respondent No.2 - Reliance Industries Ltd. seeking dividend and other consequential benefits like issue of rights and bonus on shares, it was informed to the appellant by the respondent No.2 that the shares of the appellant on which dividend was claimed, were found to be tainted and hence it was unable to consider the request of the appellant for payment of dividends. The appellant, thereafter also learnt that there had been mutual correspondence between the share broker companies i.e. respondent No.3 Karvy Consultants Ltd. and respondent No.4 - Abex and Company for taking the accounts of the shares in question vide Annexure-P1 in order to complete certain procedural formalities. But as per the case of the appellant, neither the respondent No.3 nor respondent No.4 cared to inform the appellant about the said development through which he had purchased the shares. The appellant has annexed the copy of the letter dated 12.7.1995 vide annexure P-1 which was written by the respondent No.4 - Abex and Company to Respondent No.3 - Karvy Consultants Ltd.

5. Since the appellant had been informed by the respondent No.2 - Reliance Industries Ltd. that the dividends could not be paid to him as the shares were held to be tainted, the appellant also tried to ascertain the status of his shares purchased by him through respondent Nos. 3 and 4. However, it is alleged by the respondent No.3 -M/s. Karvy Consultants Ltd. that it had informed the appellant to submit appropriate application seeking certification of the tainted shares as the equity shares in question stood in the name of M/s. Fair Growth Financial Service Ltd. which subsequently became the subject matter of attachment as per the order of the Government of India since it was found to be involved in some scam and hence the shares issued by this co