MINOO MEHTA versus SHAVAK D. MEHTA

Citation: [1998] 1 S.C.R. 182 · Decided: 15-01-1998 · Supreme Court of India · Bench: S.B. MAJMUDAR · Disposal: Dismissed
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Judgment (excerpt)

A 
MINOO MEHTA 
v. 
SHA V AK D. MEHTA 
JANUARY 15, 1998 
B 
[S.B MAJMUDAR AND M. JAGANNADHA RAO, JJ.] 
Special Court (Trial of Offences Relating to Transactions in Securities) 
Act, 1992-Section 7, 3(2) & 4 and 9-A-Jurisdiction of-Complainant 
C handed over the shares with the transfer forms to accused for arranging the 
sale thereof-Accused failed to pay sale proceeds-Complaint before Special 
Court for criminal breach of trust and dishonest misappropriation of 
securities-Accused though not notified involved in offence relating to 
transact/on in securities during the relevant period-Held, can be tried by 
Special Court even though the accused is not a notified person as per Sec. 
b 3(2) of the Act-Indian Penal Code 1860, Sec. 409. 
The respondent-complainant is the uncle and the appellant-accused is 
his nephew. The complainant handed over his shares along with transfer 
forms to accused for arranging sale thereof and to pay the sale proceeds to 
him. The complainant on various occasions enquired with the accused about 
E the sale but the accused put off the matter saying that the time was no.t 
opportune for the sale. Thereafter the accused started avoiding the 
complainant. On enquiry complainant found that the shares in question were 
already sold out. It was also found that the accused himself arranged the sale 
of the said shares. Complainant filed a complaint before the Special Court 
F againstthe accused for criminal breach of trust and misappropriation of the 
securities. The Special Court registered the case and framed charges against 
the accused. Accused moved an application contending that the special court 
had no,jurisdiction to try the alleged offence against him. The same was 
dismissed. Hence, this appeal. 
G 
The appellant contented that the accused was not a notified person as 
per Section 3(2) of the Act; as such the Special Court would have no 
jurisdiction to try him for the said offence. Dismissing the appeal, this Court 
HELD: 1.1. It cannot be said that the offence referred to in section 
3(2) must be offence committed by a notified person. As the preamble of the 
H Act shows, the Act is to provide for the establishment of a Special Court for 
182 
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MINOO MEHTA v. S.D. MEHTA 
183 
the trial of offences relating to transactions in securities and for matters A 
-': 
connected therewith or incidental thereto. Therefore, every offence pertaining 
to any transaction in securities which is covered by the sweep of the Act, i.e. 
if such transaction has taken place between lst April 1991 and on or before 
6th June 1992 would be subjected to the provisions of the Act regarding trial 
/. 
of such an offence. 1191-A-C] 
1.2. As for as criminal proceedings are concerned if the two 
basic requirements of Section 3, Sub-Sec. (2) are satisfied the Special Court 
will have jurisdiction under Section 7 to deal with the offences alleged even 
B 
if the accused is not notified person. The jurisdiction of the Special Court 
cannot depend upon mere fancy and volition of the custodian. On a conjoint C 
-
reading of Sec. 3 and its relevant provisions, therefore, it must be held that 
once the custodian notifies a person in the Official Gazette under Sub-Sec. 
(2) of Sec. 3, he gets the power and jurisdiction to deal with such person's 
properties and transactions as laid down under Sub-Sec. (4) of Sec. 3 and 
Sec. 4 and in such a case even the civii suits of notified persons would stand D 
transferred as per Section 9-A of the Act. Hut in case of criminal proceedings 
even if the accused is not notified still the Special Court will have jurisdiction 
under Section 7 to deal with the offences. [194-B-DJ 
2. So far as the accused involved in criminal offences contemplated by 
Sec. 3, Sub-Sec. (2) are concerned, the Statutory Scheme under Sec. 11 of E 
the Act can have no application. 1196-C] 
; 
Canara Bank v. Nuclear Power Co1pn. of India Ltd., (1995] Supp. 
3 SCC 81; Kurdremukh 
Iron Ore. 
Co. Ltd. v. Fairgrowth Financial 
Services Ltd., (1994) AIR SCW 2342, distinguished. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 69of1998. 
From the Judgment and Order dated 10.7.97 of the Special Courts for 
Trial of offences relating to transactions in Securities Act, 1992 in Application 
No. 240 of 1997 in Cr!. Case No. I of 1995. 
Raju Ramachandran and Manoj Wad for the Appellants. 
Dhiraj Mirajkar and Rustom B. Hathikhanawala for the Respondents. 
The Judgment of the Court was delivered by 
F 
G 
H 
184 
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