2002 (7) TMI 730 - HC - Companies Law

Summary

Issues Involved:
1. Alternative remedy under Special Court (Trial of Offenses Relating to Transactions in Securities) Act, 1992.
2. Maintainability of writ petition.
3. Whether the Stock Exchange is a 'State' under Article 12 of the Constitution.
4. Justification of deactivation of BOLT terminal by Stock Exchanges.
5. Attachment of properties under the Act of 1992.
6. Jurisdiction of the High Court versus Special Court.

Issue-wise Detailed Analysis:

1. Alternative Remedy under Special Court (Trial of Offenses Relating to Transactions in Securities) Act, 1992:
The learned Single Judge dismissed the writ petition, holding that the petitioner has an alternative remedy under the statute by approaching the Special Court constituted under the Act of 1992. The Act was enacted to deal with large-scale irregularities and malpractices in securities transactions, and it provides for the appointment of Custodians and the establishment of a Special Court for speedy recovery and trial of offenses. The Special Court has exclusive jurisdiction over matters related to the Act, and the High Court directed the petitioner to seek remedy from the Special Court.

2. Maintainability of Writ Petition:
The writ petition was dismissed on the grounds that the petitioner has an alternative statutory remedy. The High Court emphasized that the petitioner should approach the Special Court for redressal of grievances as provided under the Act of 1992. The Act has an overriding effect on other laws, and the Special Court is competent to handle such matters.

3. Whether the Stock Exchange is a 'State' under Article 12 of the Constitution:
The learned Single Judge held that the Stock Exchange is a 'State' within the meaning of Article 12 of the Constitution, making the writ petition maintainable. However, the High Court found that this question does not directly fall for determination in this case. The primary issue was the action taken by the Custodian under the Act of 1992, and the Stock Exchange merely complied with the Custodian's orders. Therefore, the High Court set aside the view of the learned Single Judge on this question.

4. Justification of Deactivation of BOLT Terminal by Stock Exchanges:
The Stock Exchanges deactivated the BOLT terminal of the petitioner-company following the notification by the Custodian under the Act of 1992. The notification attached all properties of the notified persons/entities, including the petitioner-company's director, Ajay Kayan. The High Court held that the Stock Exchanges acted in compliance with the Custodian's orders and had no other option but to deactivate the terminal. The petitioner-company's challenge to this action was found to be without merit.

5. Attachment of Properties under the Act of 1992:
The notification by the Custodian attached all properties of the notified persons/entities, including Ajay Kayan, under Section 3(3) of the Act of 1992. The High Court emphasized that the properties of the notified persons/entities stand attached from the date of notification, and the Custodian deals with these properties as directed by the Special Court. The petitioner-company's assets were attached due to the involvement of its director, Ajay Kayan, in the offenses related to securities transactions.

6. Jurisdiction of the High Court versus Special Court:
The High Court reiterated that the Special Court has exclusive jurisdiction over matters related to the Act of 1992. The petitioner-company's grievance against the Custodian's order should be addressed by the Special Court, not the High Court. The High Court upheld the learned Single Judge's decision to direct the parties to seek remedy under the Act of 1992 and dismissed the appeal filed by the petitioner-company.

Conclusion:
The High Court dismissed the appeal filed by the petitioner-company and allowed the appeal filed by the Calcutta Stock Exchange Association Limited. The view taken by the learned Single Judge that the Calcutta Stock Exchange is a 'State' within the meaning of Article 12 of the Constitution was set aside. The High Court emphasized that the petitioner-company should seek remedy from the Special Court constituted under the Act of 1992.