LexSMT. RASILA S. MEHTA versus CUSTODIAN, NARIMAN BHAVAN, MUMBAI
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A B c [2011] 6 S.C.R. 234 SMT. RASILA S. MEHTA v. CUSTODIAN, NARIMAN BHAVAN, MUMBAI (Civil Appeal No. 2924 of 2008) MAY 6, 2011 [P. SATHASIVAM AND DR. B.S. CHAUHAN, JJ.] Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992: ss. 3(2) and 4(2) and 9-A - Notification of persons involved in Securities Scam - Notification dated 4. 1. 2007 notifying two more family members of the entities initially notified - HELD: When the earlier entities were notified, 0 complete details of their transactions were not known and the appellants were not notified because their involvement and diversion of funds to them was not clear - On the complaint of Canbank Financial Services Ltd., the Custodian rightly notified the appellants and the Special Court was justified in E dismissing the petition of appellants for their de-notification uls 4(2) - Securities Scam. ss.3(2), 3(3), 3(4) and 9-A- Proceedings against persons not involved in offences in transactions in securities -- HELD: With the amendment carried out in the Act on 25.1.1994, by F virtue of s. 9-A, civil jurisdiction has been conferred on Special Court - The object of the Act is not merely to bring the offender to book but also to recover the public funds - Even if there is a nexus between third party, an offender and/or property of the third party can also be notified - The word G "involved" in s.3(2) has to be interpreted in such a manner as to achieve the purpose of the Act - Interpretation of Statutes - Purposive construction - Rule of construction, 'noscitur a sociis' - Applicability of - Maxim 'ut res magis vafeat quam pereat' H 234 RASILA S. MEHTA v. CUSTODIAN, NARIMAN 235 BHAVAN, MUMBAI ss. 3(2), 3(3), 3(4), 9-A and 11 - Notified persons - A Attachment of properties - HELD: From the date of notification u/s 3(2} all movable/immovable properties whether acquired by tainted fund of otherwise, belonging to notified persons shall stand attached simultaneously with the issue of the Notification and are available for distribution u/s 11. s ss. 3(2), 3(4) and 11- Notification uls 3(2) -Attachment of property- Opportunity of hearing - HELD: s.3(2) does not give any right of personal hearing to the person being notified, as a pre-decisonal hearing would frustrate the entire purpose C of the Act - Attachment of property is natural consequence of notification and not sale of property - Power to order sale of property lies with Special Court which is presided over by a High Court Judge - Notified person can file a petition uls 4(2) within 30 days of the issuance of notification - This amounts to post-decisional hearing satisfying the principles D of natural justice. · ss. 3(2), 3(3), 3(4), 9-A and 11 - Notified persons - Property attached - Claim for maintenance, repair charges, interest and penalty for belated payment - HELD: The E attached properties continue to remain with the Custodian - For their upkeep maintenance, repair etc., Custodian is liable to pay to the Housing Societies, and as such his claim as approved by the Special Court is sustained, except that he is not permitted to collect interest and penalty charges on the F arrears of maintenance and repair charges. ·- Special court (Trial of Offences relating to Transactions in Securities) Rules, 1992: · r.2(b/ read with s.1.1(2) - !:Financial institution" - G Complaint by and claim of Canbank Financial Services Ltd. (Canfina) - HELD: For the purp9se of the Special Cowt Act and the Rules, C6nfina is a ';inancia/ institution' - /ts claim /alls uis 11(2)(b) of the Act and complaint falls under r.2(b) - H 236 SUPREME COURT REPORTS [2011) 6 S.C.R. A Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 - s.11(2). Interpretation of Statutes: Purposive construction - Object and reasons of a statute B - Significance of - HELD: It is incumbent on courts to strive and interpret the statute as to protect and advance its object and purpose and to keep the legislative policy in mind while applying the provisions of the Act to the facts of the case - When rule of purposive construction is gaining momentum, C courts should be very reluctant to ignore the legislative intent when the language is tolerably plain what it seeks to achieve. D Harmonious construction - HELD: In the event of any conflict, a har'!'onious construction should be given. Words and Phrases: Expression "involved in the
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