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Issues: (i) Whether the Special Court had jurisdiction under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 to entertain the Custodian's application concerning the attached sum and the securities transaction; (ii) Whether there had been a valid allotment of shares to the notified party and, if not, whether the appellant was bound to refund the amount with interest on the footing of a buy-back financial arrangement.
Issue (i): Whether the Special Court had jurisdiction under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 to entertain the Custodian's application concerning the attached sum and the securities transaction.
Analysis: Section 7 of the Act bars the jurisdiction of other courts in relation to offences referred to in section 3(2), and section 9A confers civil-court jurisdiction on the Special Court in matters relating to property attached under section 3(3) and transactions in securities entered into within the statutory period in which a notified person is involved. The claim before the Special Court fell within that statutory field.
Conclusion: The Special Court had jurisdiction, and the objection was rejected.
Issue (ii): Whether there had been a valid allotment of shares to the notified party and, if not, whether the appellant was bound to refund the amount with interest on the footing of a buy-back financial arrangement.
Analysis: The Special Court found that no valid application for membership or allotment was made, the entries in the register of members and the share certificates were suspicious, and the allotment was attempted only after notification to avoid returning the notified money. It also held that the transaction was in substance a financial arrangement on buy-back terms, which in any event justified repayment of the amount with reasonable interest.
Conclusion: No valid allotment was proved, and repayment of the sum with interest was upheld.
Final Conclusion: The appeal failed on both jurisdiction and merits, and the order directing repayment of the notified amount with interest was sustained.
Ratio Decidendi: Where a transaction involving a notified person falls within the statutory scheme of attachment and special-court jurisdiction, and no valid allotment of shares is established, the court may direct refund of the money with interest even if the arrangement is styled as a share transaction or buy-back.
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