9911796707
TMI Blog1992 (7) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... ery which he acquired in January, 1988, and presently he is employed as a lecturer in the Department of Surgery and Surgical Gastroenterology at the Nair Hospital. He is also the brothers of Harshad Mehta, Ashwin Mehta and Sudhir Mehta against whom proceedings are taken before the Special Court. The petitioner has challenged the provisions of the Special Court (Trial of Offences Relating to Transactions in Securities) Ordinance, 1992 (hereinafter referred to as the Special Court Ordinance ). 3. According to the petitioner the classification of offences which are required to be dealt with under the Ordinance is wholly arbitrary and without any rational basis. Under Section 3(2) of the Notification the offences which are referred to are t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g and financial institutions was being seriously eroded. It was, therefore, absolutely imperative to take immediate action not only to punish the guilty persons who were involved is such transactions involving public funds but also to take urgent action to freeze and recover public funds which were siphoned off and were in the hands of such manipulators is securities. It is submitted by the respondents that it is in these circumstances that the classification of offence relating to transactions in Securities after 1st of April, 1991 and before 6th June, 1992 has been arrived at. This has a direct nexus with the object which is sought to be achieved by the Ordinance, namely, not merely to bring the offenders to book speedily but also to take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder sub-section (2), shall stand attached simultaneously with the issuance of the notification. 7. The petitioners contend that these provisions give very wide powers to the Custodian to notify the name of any person on the basis merely of information received by him, and on such notification, the entire property of such a person stands attached. It is contended that this power is a very wide power which can be exercised arbitrarily. There is no provision for any hearing being given to the person who may be affected. There is no provision for giving any reasoned order either. Hence these provisions are contrary to the principles of natural justice and negate the Rule of Law. They must therefore be struck down. 8. Had the provision be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nexus of any sort with the illegal dealings is securities belonging to banks and financial institutions during the relevant period and or that there are no claims or liabilities which have to be satisfied by attachment and sale of such property, in our view, the Special Court would have the power to direct the Custodian to release such property from attachment. In the same way, if ultimately, the Special Court, after looking at all the relevant circumstances, comes to the conclusion that the entire property should be released from attachment, we do not see any reason why such a direction also cannot be given by the Special Court under section 3 sub-section (4). In such a situation, if the entire property is required to be released from att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling with the principles of natural justice, what opportunity may be regarded as reasonable would necessarily depend on the practical necessities of the situation. It may be sophisticated full-fledged hearing or it may be a hearing which is very brief and minimal; it may be a hearing prior to the decision or it may even be post-decisional remedial hearing. The audi alteram partem rule is sufficiently flexible to permit modifications and variations to suit the exigencies of myriad kinds of situations which may arise. In the present case the audi alteram partem rule is not violated by reason of the fact that the powers of the Custodian under section 3(2) and (3) are circumscribed by Section 3(4). 10. The submission of the petitioner that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to attach such property is therefore conferred on the custodian, even when the property is in the hands of a third party, if there is a nexus between such third party, an offender and the property. The submission of the petitioner must therefore be rejected. 12. It was also submitted before us that there is no co-relation between the property attached and the liability which the person concerned, may be ultimately required to discharge. To that extent also the provisions of Section 3 are arbitrary and unreasonable. This submission also, in our view, has no substance. He pointed out earlier, the provisions of Section 9 sub-sections (2) and (3) have been enacted in order to meet the special circumstances relating to the offences concern ..... X X X X Extracts X X X X X X X X Extracts X X X X
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