Trust money and broker-held sale proceeds remain the principal's property, with a charge on mixed funds available for refund.

Money received by a broker on behalf of a principal remains the principal's property and cannot be treated as the broker's assets for attachment under the Special Court Act. A third party's share, title or right in the property is not extinguished by attachment proceedings. Where trust money is mixed with the trustee's own funds, section 66 of the Indian Trusts Act, 1882 allows the principal to claim a charge on the composite fund without tracing a specific bank account. The attached amount was therefore not liable to be treated as the broker's property, and refund to the principal was directed.

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Issues: Whether the sale proceeds received by a broker on behalf of the appellant could be treated as property belonging to the notified person and attached under the Special Court Act, and whether the appellant was entitled to refund of the amount notwithstanding the mixing of funds.

Analysis: The proceeds of shares sold by the broker on behalf of the appellant did not belong to the broker and were held by him in trust. Property in which a third party has an interest, share, title or right cannot be extinguished by attachment proceedings under the Special Court Act. The inability of the broker to identify a particular bank account did not defeat the appellant's claim, because where a trustee mixes trust money with his own money, section 66 of the Indian Trusts Act, 1882 permits a charge on the whole fund to the extent of the amount due.

Conclusion: The attached amount of Rs. 2.90 crores was not liable to be treated as the broker's property, and the appellant was entitled to recover that amount from the assets under attachment.

Final Conclusion: The appeal succeeded and the order of the Special Court was set aside with directions to work out the modalities for refund of the appellant's money.

Ratio Decidendi: Money received by an agent or broker on behalf of a principal remains the principal's property, and if such trust money is mixed with the trustee's own funds, the principal is entitled to a charge on the composite fund rather than being required to trace a specific account.

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