Special statutory remedy and Article 12 status: writ challenge to attachment failed, and the exchange was not treated as State on the record.
A challenge to a notification and statutory attachment under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 was held to lie before the Special Court, because the Act created an overriding, self-contained scheme for notifications, attachments, cancellations and objections; the writ court was therefore not the proper forum. The Calcutta Stock Exchange had merely acted on the Custodian's communication as an implementing agency, and the Article 12 finding against it was set aside because the point was incidental and the factual record was insufficient to determine State character. The writ petitioner's appeal failed, while the exchange's appeal succeeded.
Issues: (i) whether the writ petition was not maintainable in view of the remedy before the Special Court under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 and the statutory attachment of the notified person's properties; (ii) whether the Calcutta Stock Exchange was a State within the meaning of Article 12 of the Constitution of India.
Issue (i): Whether the writ petition was not maintainable in view of the remedy before the Special Court under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 and the statutory attachment of the notified person's properties.
Analysis: The notification issued by the Custodian under Section 3(2) of the Act, once published, triggered the statutory consequence under Section 3(3) that all movable and immovable properties of the notified person stood attached. The Act conferred an overriding effect by Section 13 and created a complete scheme for dealing with notifications, attachments, cancellations, and objections before the Special Court. The challenge in substance was to the Custodian's action and the attached properties, matters which fell within the special statutory forum and not within writ jurisdiction. The stock exchange had only acted upon the Custodian's communication as an implementing agency.
Conclusion: The writ remedy was not the proper forum, and the grievance lay before the Special Court; this issue was answered against the petitioner and in favour of the respondents.
Issue (ii): Whether the Calcutta Stock Exchange was a State within the meaning of Article 12 of the Constitution of India.
Analysis: The Bench held that this question was incidental to the real controversy because the exchange had merely complied with the Custodian's direction. In the absence of an affidavit-in-opposition and full factual material, there was no adequate basis to decide whether the exchange satisfied the tests applicable under Article 12. The correctness of the learned Single Judge's view on that question could not therefore be sustained on the materials before the Court.
Conclusion: The finding that the Calcutta Stock Exchange was a State under Article 12 was set aside.
Final Conclusion: The appeal of the writ petitioner failed, while the appeal of the Calcutta Stock Exchange succeeded. The judgment affirmed the availability of the statutory remedy before the Special Court and negatived the Article 12 finding against the exchange.
Ratio Decidendi: Where a special statute creates an exclusive forum and an overriding remedial scheme for challenges to notifications and attachments, the writ court should not entertain a direct challenge to the Custodian's action; an implementing authority that merely complies with such statutory directions is not, on that basis alone, liable to be treated as a State for Article 12 purposes.
TaxTMI 
AI Drafter ✕
TaxTMI 
