Statutory distribution under the Special Court Act governs attached property; secured and contractual claims must yield to section 11.

Property attached under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 must be dealt with through the statutory distribution scheme in section 11, with liabilities paid in the order prescribed there. The Act's overriding clause in section 13 means inconsistent contractual instruments, decrees and other claims cannot take the property outside that process. Pre-existing rights such as secured interests, liens, set-off, pledge, hypothecation and assignment are not extinguished, but they are enforceable only through the Court and within the section 11 sequence. Claimants with such interests therefore cannot insist on enforcement de hors the statutory distribution mechanism.

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Issues: Whether property attached under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 could be dealt with only under the distribution scheme in section 11, so that prior contractual rights, secured interests, liens, set-off rights, pledges, hypothecations and similar claims did not entitle claimants to stand outside that scheme.

Analysis: The statutory scheme provides for immediate attachment of the property of a notified person, empowers the Special Court to direct its disposal, and requires payment of liabilities in the order stated in section 11(2). The non obstante clause in section 13 gives the Act overriding effect over inconsistent laws, instruments, decrees and orders. On that reading, the Act does not extinguish pre-existing contractual or proprietary rights, but it does require those rights to be worked out through the Court while distribution is undertaken under section 11. The Court rejected the contention that secured creditors or holders of special interests could take the property outside the statutory sequence, and held that claims based on banker's lien, set-off, pledge, hypothecation, assignment or similar rights must yield to the distribution mechanism, though their substance may be taken into account when the property is distributed.

Conclusion: The claims could not be enforced de hors section 11, and all such interests had to be considered only within the statutory distribution process; the contention that secured or special-interest claimants stood outside section 11 was rejected.

Ratio Decidendi: Under the Special Court Act, attachment is followed by compulsory distribution under section 11, and pre-existing contractual or special proprietary rights are not destroyed but are enforceable only subject to the statutory order of priority and the overriding effect of section 13.

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