Automatic attachment of notified person's shares under securities law extends to bonus entitlements; misrepresentation bars relief against value payment.

Property of a notified person under the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 attaches automatically on notification, without any further order, and the restraint extends to shares and consequential bonus entitlements. Such attached shares cannot be transferred or dealt with in derogation of the statutory attachment. Where duplicate share certificates are obtained by misrepresentation, especially after the original shares have already been dealt with, relief against an order directing payment of the shares' value with interest is not warranted. In the discussed decision, the appeals failed and the Special Court's orders were affirmed.

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Issues: (i) Whether shares and consequential bonus shares belonging to a notified person under the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 stood automatically attached so as to prevent their transfer; (ii) whether the appellant was entitled to relief against the order directing payment of the value of the shares on the footing that duplicate share certificates had been obtained by misrepresentation.

Issue (i): Whether shares and consequential bonus shares belonging to a notified person under the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 stood automatically attached so as to prevent their transfer.

Analysis: The governing provisions provide that the properties belonging to a notified person stand attached simultaneously with the notification. The attachment is automatic and does not depend on any further finding or separate order. On that basis, shares, dividends and bonus entitlements forming part of the notified person's property are covered by the attachment and cannot be dealt with in derogation of the statutory restraint.

Conclusion: The shares and the related bonus shares stood attached and could not be transferred contrary to the statutory attachment.

Issue (ii): Whether the appellant was entitled to relief against the order directing payment of the value of the shares on the footing that duplicate share certificates had been obtained by misrepresentation.

Analysis: The material showed that duplicate certificates had been procured on the representation that the originals were lost, though the shares had already been dealt with earlier. The Special Court found that the duplicate shares were obtained by misrepresentation and that the first respondent had purchased shares in the open market for value. In these circumstances, the order directing the appellant to pay the value of the shares with interest did not suffer from legal infirmity.

Conclusion: The appellant was not entitled to relief, and the direction to pay the value of the shares with interest was upheld.

Final Conclusion: The appeals failed, and the orders of the Special Court were affirmed without interference.

Ratio Decidendi: Under the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992, property of a notified person stands attached automatically on notification, including consequential share entitlements, and relief will not be granted where duplicate share certificates are procured by misrepresentation to defeat that attachment.

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