JUDGMENT

B.N. Kirpal, J. - These appeals by special leave are against the judgment of the Special Court constituted under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (hereinafter referred to as the Special Court Act) whereby the appellant has been held to have committed civil contempt as defined under Section 2(b) of the Contempt of Courts Act, 1971 and sentenced to undergo simple imprisonment for a period of one month and a fine of Rs. 2,000/-.

2. M/s. Fairgrowth Financial Services Limited was notified on 2nd July, 1992 under the provisions of the Special Court Act. As a result thereof, all properties belonging to the said notified party stood automatically attached.

3. The Custodian appointed under the Special Court Act filed Misc. Application No. 193 of 1993 and sought a decree for Rs. 50 crores on behalf of the notified party against Pallav Sheth, appellant herein. On 24th February, 1994 the appellant submitted to a Consent Decree for a sum of Rs. 51.49 crores which was to be paid in instalments. Rs. 2.00 crores were paid but thereafter the appellant defaulted in the payment of further instalments.

4. The Custodian then moved an Execution Application No. 343 of 1994 and the Special Court thereupon required the appellant to disclose all his assets and at the same time by an interim order restrained him from alienating, encumbering, selling off or parting with possession or transferring in any manner whatsoever any of his assets movable and immovable including the Bank accounts. On an affidavit being filed by the appellant declaring his assets, the Special Court on 24th August, 1994 passed further interim order of attachment of some of the assets mentioned therein.

5. On 11th November, 1997 the Income Tax Department conducted raids on Pallav Sheth. The newspaper reports indicated detection of assets belonging to Pallav Sheth by the Income Tax Department whereupon the Special Court directed the Custodian to ascertain from the Income Tax Department complete details of all the assets of Pallav Sheth. In response to a letter written by the Custodian, the Commissioner of Income Tax vide its letter of 5th May, 1998 informed that during the search operations, the Income Tax Department detected that Pallav Sheth was the de facto owner of five companies, namely, Anzug Plastics (P) Ltd., Magan Hotels (P) Limited, Klar Chemicals (P) Limited, Malika Foods (P) Limited and Jainam Securities (P) Limited. Pallav Sheth is further reported to have admitted in the statements before the Income Tax Department by him and his wife that several cash deposits amounting to Rs. 2.81 crores make in the bank accounts of the aforesaid five companies were his undisclosed income. According to the Commissioner of Income Tax, the assets of these five companies belong to Pallav Sheth and these companies were to receive substantial amounts from other companies/individuals.

6. It was also stated by the Income Tax Department that Pallav Sheth had admitted that profits were earned from the activities of these companies in buying and selling of shares and bogus transactions of bill discounting were entered into to show loss, in order to offset the profits, and these monies were actually returned by cash and found their way into the bank accounts.

7. The Custodian then on 18th June, 1998 filed Misc. Application No. 276 of 1998 before the Special Court with a prayer that Pallav Sheth should be punished for committing contempt of the Special Courts order dated 24th August, 1994 as despite the said order he had set up benami companies and had transferred and/or alienated his property including cash inter alia with a view to defeat the decree passed against him. Though Pallav Sheth in his reply denied that the said five companies were his benami companies the Special Court directed issuance of the show cause notice to punish Pallav Sheth for contempt. It appears that Pallav Sheth filed an affidavit on 23rd July, 1999 to the eff