Interlocutory recovery orders under the Special Courts Act are not appealable, and group-based appropriation of sale proceeds was upheld.

An appeal under section 10 of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 does not lie from interlocutory orders that merely regulate execution, recovery, or appropriation of sale proceeds without deciding substantive rights, so such a challenge is not maintainable. Where the record shows that related companies were consistently treated as one group and recoveries were pursued on an aggregate basis, the consolidated liability approach and group-wise appropriation of sale proceeds were accepted as proper. The stated reasoning therefore supports dismissal of challenges to interlocutory recovery orders and upholds consolidated appropriation where the companies functioned as front entities within the same notified group.

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Issues: (i) whether appeals lay under section 10 of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 against the interlocutory orders passed by the Special Court in the course of execution and appropriation of sale proceeds; (ii) whether the Custodian was justified in treating the decrees and recoveries relating to the group companies as a consolidated liability and appropriating the sale proceeds on group basis.

Issue (i): whether appeals lay under section 10 of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 against the interlocutory orders passed by the Special Court in the course of execution and appropriation of sale proceeds.

Analysis: Section 10 permits an appeal from a judgment, sentence or order of the Special Court but excludes interlocutory orders. The impugned orders merely regulated realization of decretal amounts already finalised and did not determine any substantive lis or independent rights of the parties. The procedure adopted for recovery and appropriation was therefore not appealable as a matter of interlocutory control.

Conclusion: The appeal was not maintainable against the interlocutory orders, and the challenge failed.

Issue (ii): whether the Custodian was justified in treating the decrees and recoveries relating to the group companies as a consolidated liability and appropriating the sale proceeds on group basis.

Analysis: The record showed that the companies were consistently treated as one group, the recoveries were pursued on an aggregate basis, and the Special Court had found that the companies were controlled by the notified party and functioned as front companies for funds siphoned off from the fraudulent transactions. On that footing, the Special Court accepted the consolidated approach and upheld the appropriation made by the Custodian.

Conclusion: The consolidated appropriation of sale proceeds was upheld as proper.

Final Conclusion: The appeals disclosed no merit because the challenged orders were interlocutory and the group-based appropriation of recoveries was found to be justified.

Ratio Decidendi: An appeal under section 10 of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 does not lie against an interlocutory order that merely regulates execution or appropriation of recoveries without deciding substantive rights.

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