Special Court jurisdiction and cheque dishonour presumptions: statutory period governs securities transactions, and unrebutted evidence sustained liability.

The Special Court's jurisdiction under section 3(2) of the Special Court Act was held to depend on whether the securities transactions themselves fell within the statutory period, not on the later date of the alleged offence; the preliminary objection therefore failed. In relation to the dishonoured cheques, the admitted execution and dishonour triggered the presumptions under sections 118 and 139 of the Negotiable Instruments Act, and the accused failed to rebut them with credible evidence; the defence version remained unproved, so liability under section 138 was established. The conviction and sentence were affirmed.

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Issues: (i) Whether the Special Court had jurisdiction under section 3(2) of the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992 over offences connected with transactions in securities entered into during the statutory period, even if the offence was alleged later; (ii) Whether the appellant rebutted the statutory presumptions arising under sections 118 and 139 of the Negotiable Instruments Act, 1881 so as to displace liability under section 138.

Issue (i): Whether the Special Court had jurisdiction under section 3(2) of the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992 over offences connected with transactions in securities entered into during the statutory period, even if the offence was alleged later.

Analysis: The statutory scheme, preamble, and connected provisions showed that the Act was directed at transactions in securities undertaken within the specified period. The wording of section 3(2) placed the time reference after the expression relating to transactions in securities, and section 4 as well as section 9A(1)(b) reinforced that the legislative focus was on those transactions and the disputes arising from them. The earlier observations in Minoo Mehta were clarified as not laying down that the offence date, divorced from the underlying transaction, controlled jurisdiction. The relevant inquiry was whether the securities transactions themselves fell within the statutory period.

Conclusion: The Special Court had jurisdiction because the transactions in securities were entered into within the statutory period; the preliminary objection failed.

Issue (ii): Whether the appellant rebutted the statutory presumptions arising under sections 118 and 139 of the Negotiable Instruments Act, 1881 so as to displace liability under section 138.

Analysis: The admitted execution of the cheques and their dishonour attracted the mandatory presumptions under sections 118 and 139, placing the evidential burden on the appellant to prove the contrary. The defence evidence did not establish that the cheques were issued for unrealised intended transactions, nor did it satisfactorily explain why the cheques were issued and retained by the Bank. The appellant did not enter the witness box, and the defence material was found insufficient to make the alternative version probable. The presumptions therefore remained unrebutted, and the ingredients of section 138 stood proved.

Conclusion: The appellant failed to rebut the presumptions and the conviction under section 138 was upheld.

Final Conclusion: The statutory forum had jurisdiction and the criminal liability under the dishonoured cheques was proved, so the conviction and sentence were affirmed.

Ratio Decidendi: Under the Special Court Act, the statutory period in section 3(2) qualifies the securities transactions and not the date of the offence, and mandatory presumptions under sections 118 and 139 of the Negotiable Instruments Act can be displaced only by credible proof, not by a mere plausible explanation.

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