1995 (11) TMI 312 - HC - Companies Law

Transfer to shares Power to refuse registration and appeal against refusal, Special court, Procedures & powers of

Summary

Issues Involved:
1. Jurisdiction of the High Court vs. Special Court
2. Registration of IRFC bonds in the appellant's name
3. Compensation for non-payment of interest on IRFC bonds
4. Transfer of the case to the Special Court

Issue-wise Detailed Analysis:

1. Jurisdiction of the High Court vs. Special Court:

The primary issue was whether the High Court had the jurisdiction to hear the case or if it should be transferred to the Special Court constituted under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992. The appellant argued that the High Court had jurisdiction, while the respondent contended that the case fell under the jurisdiction of the Special Court due to the involvement of a notified person and the transaction period falling between April 1, 1991, and June 6, 1992.

The court referred to the Supreme Court's judgment in Canara Bank v. Nuclear Power Corporation of India Ltd., which clarified that the Special Court has exclusive jurisdiction over matters involving transactions in securities during the specified period if a notified person is involved. The court concluded that since the transaction in question occurred during the interregnum period and involved a notified person, the matter fell within the jurisdiction of the Special Court.

2. Registration of IRFC Bonds in the Appellant's Name:

The appellant, ABN Amro Bank, sought to have its name registered as the holder of 1 lakh 9% tax-free secured redeemable non-convertible IRFC bonds. The appellant argued that the ownership of the IRFC bonds was transferred to them as purchasers in due course and for valuable consideration upon delivery of the letter of allotment and transfer deed.

However, the respondent, Indian Railway Finance Company Ltd. (IRFC), did not register the bonds in the appellant's name, disputing the ownership. The court did not delve into the merits of this issue, as it determined that the jurisdiction to decide this matter lay with the Special Court.

3. Compensation for Non-Payment of Interest on IRFC Bonds:

The appellant also sought compensation for the non-payment of interest on the IRFC bonds from June 26, 1992, to October 1, 1994, and for future interest. The appellant contended that respondents Nos. 1 to 4 should be directed to pay the accrued interest and compensation for the delay in payment.

Again, the court did not address the merits of this issue, as it concluded that the Special Court had the jurisdiction to decide on matters arising out of transactions in securities during the specified period.

4. Transfer of the Case to the Special Court:

The court examined the provisions of Section 9A of the Special Court Act, which grants the Special Court exclusive jurisdiction over civil matters related to transactions in securities during the specified period. The court observed that the intention of Parliament was to have all such transactions dealt with by the Special Court to ensure uniformity and consistency in handling cases arising from the securities scam.

Given that the transaction in question occurred within the specified period and involved a notified person, the court concluded that the case should be transferred to the Special Court. The court allowed the application for transfer and directed that the appeal and other connected applications be transferred to the Special Court.

Conclusion:

The court allowed the application for transfer, concluding that the Special Court had exclusive jurisdiction over the matter due to the involvement of a notified person and the transaction period falling within the specified dates. The appeal and other connected applications were transferred to the Special Court, and the petition was disposed of without any order as to costs.