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TMI Blog2022 (8) TMI 1552X X X X Extracts X X X X X X X X Extracts X X X X ..... 18 of the Act of 1963. The finding that there was an acknowledgement of liability within the meaning of Section 18 is premised on the hypothesis that the Act of 1963 would stand attracted. However, it has also been held in the judgment of the Special Court that in any event the Custodian is entitled and liable to recover the amount under the Act of 1992. Section 29(2) of the Limitation Act stipulates that where a special law prescribes a period of limitation for an application different from the period prescribed in the Schedule of Act of 1963, then Section 3 of the Act of 1963 shall apply as if such period was prescribed by the schedule, and the provisions of Sections 4 to 24 shall apply to the extent that it is not expressly excluded by the special Law. The three-Judge Bench in LS. SYNTHETICS LTD. VERSUS FAIRGROWTH FINANCIAL SERVICES LTD. [ 2004 (9) TMI 384 - SUPREME COURT] observed that Section 29(2) of the Limitation Act is not applicable to the Act of 1992 since in terms of the provisions of the Act, no period of limitation is prescribed . In the present case, the Special Court has proceeded on the basis that there was an acknowledgement of liability by the letter of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 1992. The custodian notified the second respondent as a notified person under the provisions of Section 3(2) of the Act of 1992. Section 3(2) The custodian many, on being satisfied on information received that any person has been involved in any offence relating to transactions in securities after the 1st day of April 1991 and on and before the 6th June, 1992, notify the name of such person in the Official Gazette. The assets of FFSL stood attached with effect from 2 July 1992. The case of FFSL was that the third respondent had executed a promissory note on 14 October 1991 for the repayment of the loan and a letter of undertaking-cum-indemnity reiterating its commitment to repay Rupees twenty five lakhs. FFSL instituted Miscellaneous Petition No 15 of 2000 against the third respondent for the recovery of an amount of Rupees twenty five lakhs, together with interest at the rate of twenty per cent. On 28 March 2003, the Special Court directed the third respondent to pay to FFSL a sum of Rs 63.86 lakhs, together with interest at twenty per cent on the principal sum of Rupees twenty five lakhs from the date of the institution of the petition till payment and/or realization. 4 On 28 A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liability to pay the dues and sought a waiver of interest. The appellant also remitted a sum of Rs 1,00,000 by demand draft drawn from the bank account of Raviraj Housing Corporation in which the balance is alleged to only be in the amount of Rs. 15,036. The Bank account has been selectively used to show minimal balances but funds are made available for issuing Demand Drafts. Thus, the appellant clearly acknowledged liability; and (ii) Even otherwise, the execution application has been filed by the Custodian who is entitled and liable to recover the amounts in accordance with the Act of 1992. 6 Appearing on behalf of the appellant, Mr Huzefa A Ahmadi, learned senior counsel, submitted that: (i) The appellant was not part of the trust when the decree was passed, since he had become a trustee only in 2005 and that, in any event, the personal properties of the appellant cannot be attached in satisfaction of the decree; (ii) The appellant s letter dated 22 February 2018 does not acknowledge liability, but, in substance, is only a without prejudice offer to pay; and (iii) In any event, the acknowledgement which was issued on 22 February 2018 is beyond the period of limitation since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rative part of the directions of the Special Court is extracted below: (i). Respondent nos. 1 and 2 are directed to disclose their assets. Respondent no. 2 is directed to disclose all personal assets, shares held in jointly and with others as also stocks of limited companies bonds, Mutual Funds, National Savings Certificates, Post Office Savings and other securities all of which will be disclosed in affidavit to be filed within a period of two weeks from today. (ii) Meanwhile respondent no. 2 shall also disclose his Permanent Account number as registered with the Income Tax Authorities within two weeks from today. If such disclosure is not forthcoming the concerned Commissioner of Income Tax shall provide the Custodian with the PAN based on which Custodian is directed to make all necessary inquires and seek disclosure of assets from the aforesaid parties. (iii) The Custodian shall address letters to NSDL and CDSL calling upon them to furnish copies of statement of accounts of all transactions in shares and stocks and bonds and Mutual funds that may be held in the name of respondent no. 2 in his own name and jointly with any third party, respondent no. 1 and 2 jointly and separately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h does not decide the important rights or liabilities of the parties. Amar Nath v. State of Haryana, (1977) 4 SCC 137 The Special Court in its order dated 6 March 2020 has conclusively held that the execution petition is not barred by limitation. The determination of the issue of limitation affects the rights and liabilities of the parties. Thus, the argument of the first appellant that the appeal is not maintainable in view of Section 10 of the Act of 1992 is rejected. 14 The Special Judge has specifically held against the appellant on the ground that there was an acknowledgement of liability within the meaning of Section 18 of the Act of 1963. The finding that there was an acknowledgement of liability within the meaning of Section 18 is premised on the hypothesis that the Act of 1963 would stand attracted. However, it has also been held in the judgment of the Special Court that in any event the Custodian is entitled and liable to recover the amount under the Act of 1992 in view of the decision of this Court in L S Synthetics Ltd (supra). 15 In L S Synthetics Ltd (supra), the appellant had obtained short term loans from a notified party. The Custodian had called upon the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equired to be issued by the Special Court relating to the disposal of the attached property, are concerned. (emphasis supplied) Section 29(2) of the Limitation Act stipulates that where a special law prescribes a period of limitation for an application different from the period prescribed in the Schedule of Act of 1963, then Section 3 of the Act of 1963 shall apply as if such period was prescribed by the schedule, and the provisions of Sections 4 to 24 shall apply to the extent that it is not expressly excluded by the special Law. The three-Judge Bench in L S Synthetics Ltd (supra) observed that Section 29(2) of the Limitation Act is not applicable to the Act of 1992 since in terms of the provisions of the Act, no period of limitation is prescribed . 16 In Fairgrowth Investments Ltd (supra), the issue before this Court was whether the Special Court constituted under the Act of 1992 has the power to condone the delay in filing a petition under Section 4(2) of the Act. In that case, on 23 November 2001, the appellant was notified under Section 3(2) of the Act of 1992. On 8 October 2002, the appellant filed a petition of objection to the notification under Section 4(2) of the Act of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the special/local Act, as a whole, by affirmation of the first alternative. We are therefore not called upon to decide whether claims either preferred for the first time before the Special Court or transferred to the Special Court under Section 9-A(2) would attract the provisions of Sections 4 to 24 of the Limitation Act. It is enough for the purpose of this appeal to hold that Section 29(2) of the Limitation Act, 1963 does not apply to proceedings under Section 4(2) of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992. Since the appellant's petition of objection had been filed much beyond the period prescribed under that section, the Special Court was right in rejecting the petition in limine. The appeal is accordingly dismissed but without any order as to costs. 17 At this juncture, Section 18 of the Act of 1963 also needs to be noted. Section 18 of the Act of 1963 stipulates that if an acknowledgment of liability in writing is made before the expiration of the prescribed period for a suit or application in respect of any right, a fresh period of limitation shall be computed from the time when the acknowledgment was signed. Explanation ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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