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CASE NO.:

Appeal (crl.) 688 of 1995

PETITIONER:

HITEN P. DALAL

Vs.

RESPONDENT:

BRATINDRANATH BANERJEE

DATE OF JUDGMENT: 11/07/2001

BENCH:

Ruma Pall, Brijesh Kumar, B.N.Kirpal

JUDGMENT:

RUMA PAL, J

The appellant was found guilty of an offence under

Section 138 of the Negotiable Instruments Act, 1881 by the

Special Court set up under the Special Court (Trial of

Offences relating to Transactions in Securities) Act, 1992

(referred to as, the "Act"). The appellant was sentenced to

rigorous imprisonment for a term of one year and a fine for a

sum of Rs. 1 lakh, in default to undergo further rigorous

imprisonment for a term of three months. Aggrieved by the

judgment and order of the Special Court, the appellant has

preferred this appeal.

In the course of the hearing of the appeal before this

Court, learned counsel for the appellant raised a preliminary

issue based on the language of sub Section 2 of Section 3 of

the Act. It was contended that the jurisdiction of the Special

Court was limited to offences committed between 1. 4. 1991

and on or before 6.6.1992 and the offence alleged having

taken place after 6.6.92, the Special Court had no

jurisdiction to try it. The Bench then hearing the appeal,

recorded in its order dated 7.9.1999:

"... ... ... Prima Facie we are not in agreement

with the contention raised by the learned counsel

for the appellant on first principles but the

learned counsel for the appellant has brought to

our notice a judgment of this Court in the case of

Minoo Mehta vs. Sharak D. Mehta (1998) 2

SCC 418. In the aforesaid judgment on facts of

that case this question possibly did not arise for

consideration but even otherwise Their Lordships

in paragraph 12 have come to the conclusion :

’Therefore, every offence pertaining to any

transaction in securities which is covered by the

sweep of the Act, that is if such transaction has

taken place between 1.4.1991 and on or before

6.6.1992 would be subjected to the provisions of

the Act regarding trial of such an offence.’

Having held so in the later part of the said

paragraph the Lordships have come to the

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conclusion:

’The offence referred to in sub-section (2)

of Section 3 which is within the sweep of Section

7 of the Act must be on 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 1.4.1991 and on

or before 6.6.1992’.

This statement of law is contrary to what

their Lordships have said in the earlier paragraph

as referred to earlier and we are not in agreement

with the enunciation made in the second part of

paragraph 12 quoted above. In this view of the

matter, we think it appropriate that this appeal

should be placed before a 3-Judge Bench."

The matter was thereafter placed before this Bench and

heard.

The apparently contradictory observations in Minoo

Mehta V. Shavak D. Mehta, need resolution with reference

to the provisions of the Act.

The Act was promulgated on 6.6.92 to "provide for the

establishment of a Special Court for the trial of offences

relating to transactions in securities and for matters

connected therewith or incidental thereto."

The jurisdiction of the Special Court was specified in

Section 7 and was limited to offences referred to in section

3(2) of the Act. Section 3(2) insofar as it is relevant

provides:

"....... Any offence relating to transactions

in securities after the 1st day of April 1991

and on and before 6th June 1992....."

The question is - does the period specified qualify the

word "offence" or the word "transactions" ? If it is the

former, the jurisdiction of the Special Court would be, as

contended by the appellant, limited to offences committed

within the period specified whenever t