TaxTMI 
TaxTMI 
2001 (2) TMI 968
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....ondent No. 1. According to the appellant, the agreement was to repay the loan amount within three years together with interest at 18 per cent per annum. 2. Repayment not having been made and respondent No. 1 having been notified under section 3 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 ('Special Court Act'), proceedings were initiated by the Custodian before the Special Court for the recovery of the said money. 3. There was no dispute before the Special Court with regard to the fact that Rs. 1 crore had been taken on loan by the appellant. The claim against the appellant before the Special Court was for a sum of Rs. 1,57,20,216.24 consisting of principal plus interest. The main contention ra....
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....ch has been placed on record, however, clearly indicates that the respondent had claimed interest at the rate of 21.5 per cent on the loan of Rs. 50 lakhs first advanced and on the balance amount the claim was of 23 per cent. There is no document on the record to show that the amount of interest claimed was immediately refuted, though it was belatedly refuted by the appellant. We do not find any infirmity in the decision of the Special Court in coming to the conclusion that the appellant was liable to pay the rate of interest as claimed by the respondent. 7. Coming to the second question, there is no doubt that the SICA is a Special Act. Section 32(1) of the said Act reads as follows : "Effect of the Act on other laws.-(1) The provisions ....
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....[1993] 2 SCC 144; Sarwan Singh v. Kasturi Lal [1977] 2 SCR 421; Allahabad Bank v. Canara Bank [2000] 4 SCC 406 and Shri Ram Narain v. Simla Banking Industrial Co. Ltd. 1956 SCR 603. 10. We may notice that the Special Court, Bombay had in another case dealt with a similar contention. In Bhoruka Steel Ltd. v. Fairgrowth Financial Services Ltd. [1997] 89 Comp. Cas. 547 #, it had been contended that recovery proceedings under the Special Court Act should be stayed in view of the provisions of the SICA. Rejecting this contention, the Special Court had come to the conclusion that the Special Court Act being a later enactment would prevail. The head-note which brings out succinctly the ratio of the said decision is as follows : "Where there are ....
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.... directions regarding property of a notified party. Under section 11(2), the Special Court is to distribute the assets of the notified party in the manner set out thereunder. Monies payable to the notified parties are assets of the notified party and are, therefore, assets which stand attached. These are assets which have to be collected by the Special Court for the purposes of distribution under section 11(2). The distribution can only take place provided the assets are first collected. The whole aim of these provisions is to ensure that monies which are siphoned off from banks and financial institutions into private pockets are returned to the banks and financial institutions. The time and manner of distribution is to be decided by the Sp....
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....nancial Reconstruction whilst considering a scheme for reconstruction has to keep in mind the fact that it is to be paid off or directed by the Special Court. The Special Court can, if it is convinced, grant time or instalments. There can, therefore, be no stay of any proceedings for recovery against a sick company so far as the Special Court under the 1992 Act is concerned." (p. 547) 11. We are in agreement with the aforesaid decision of the case, more so when we find that whenever the Legislature wishes to do so it makes appropriate provisions in the Act in that behalf. Mr. Shiraz Rustomjee has drawn our attention to section 34 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 wherein after giving an overriding ....