AI Drafter 
TaxTMI 
TaxTMI 
2022 (8) TMI 1552
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion, the third respondent, had availed a short term loan of Rupees Twenty five lakhs from FFSL and agreed to repay it after 180 days with interest at the rate of 20 percent per annum. The first respondent is the custodian appointed by the Central Government under the provisions of the Act of 1992. The custodian notified the second respondent as a "notified person" under the provisions of Section 3(2) of the Act of 1992. Section 3(2) " The custodian many, on being satisfied on information received that any person has been involved in any offence relating to transactions in securities after the 1st day of April 1991 and on and before the 6th June, 1992, notify the name of such person in the Official Gazette." The assets of FFSL stood attached with effect from 2 July 1992. The case of FFSL was that the third respondent had executed a promissory note on 14 October 1991 for the repayment of the loan and a letter of undertaking-cum-indemnity reiterating its commitment to repay Rupees twenty five lakhs. FFSL instituted Miscellaneous Petition No 15 of 2000 against the third respondent for the recovery of an amount of Rupees twenty five lakhs, together with interest at the rate of twenty pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....20 observed that the appellant has been attempting to delay the proceedings. The Special Court held that the claim of the first respondent is not barred by the law of limitation because: (i) The appellant in the letters addressed to the Custodian on 22 February 2018 and 11 August 2018 acknowledged the liability to pay the dues and sought a waiver of interest. The appellant also remitted a sum of Rs 1,00,000 by demand draft drawn from the bank account of Raviraj Housing Corporation in which the balance is alleged to only be in the amount of Rs. 15,036. The Bank account has been selectively used to show minimal balances but funds are made available for issuing Demand Drafts. Thus, the appellant clearly acknowledged liability; and (ii) Even otherwise, the execution application has been filed by the Custodian who is entitled and liable to recover the amounts in accordance with the Act of 1992. 6 Appearing on behalf of the appellant, Mr Huzefa A Ahmadi, learned senior counsel, submitted that: (i) The appellant was not part of the trust when the decree was passed, since he had become a trustee only in 2005 and that, in any event, the personal properties of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f liability by the appellant on 22 February 2018. Learned senior counsel submitted that since the issue of limitation has been concluded against the appellant, the decision of the Special Court cannot, in substance, be regarded as interlocutory in nature. 11 The order which has been passed by the Special Court is for the disclosure of assets. For convenience of reference, the operative part of the directions of the Special Court is extracted below: "(i). Respondent nos. 1 and 2 are directed to disclose their assets. Respondent no. 2 is directed to disclose all personal assets, shares held in jointly and with others as also stocks of limited companies bonds, Mutual Funds, National Savings Certificates, Post Office Savings and other securities all of which will be disclosed in affidavit to be filed within a period of two weeks from today. (ii) Meanwhile respondent no. 2 shall also disclose his Permanent Account number as registered with the Income Tax Authorities within two weeks from today. If such disclosure is not forthcoming the concerned Commissioner of Income Tax shall provide the Custodian with the PAN based on which Custodian is directed to make all neces....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, one or the other of the following four tests was applied. 1. Was the order made upon an application such that a decision in favour of either party would determine the main dispute? 2. Was it made upon an application upon which the main dispute could have been decided? 3. Does the order as made determine the dispute? 4. If the order in question is reversed, would the action have to go on?" 13 An "interlocutory order" denotes an interim or temporary order which does not decide the important rights or liabilities of the parties. Amar Nath v. State of Haryana, (1977) 4 SCC 137 The Special Court in its order dated 6 March 2020 has conclusively held that the execution petition is not barred by limitation. The determination of the issue of limitation affects the rights and liabilities of the parties. Thus, the argument of the first appellant that the appeal is not maintainable in view of Section 10 of the Act of 1992 is rejected. 14 The Special Judge has specifically held against the appellant on the ground that there was an acknowledgement of liability within the meaning of Section 18 of the Act of 1963. The finding that there was an acknowled....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... person stands attached. In other words, the provisions of the Limitation Act would inter alia apply only when a suit is filed or a proceeding is initiated for recovery of an amount and not where a property is required to be applied towards the claims pending before the tribunal for the purpose of discharge of the liabilities of the notified person in terms of Section 11 of the said Act. [...] 41 [...] We are, therefore, of the opinion that the provisions of the Limitation Act have no application, so far as directions required to be issued by the Special Court relating to the disposal of the attached property, are concerned." (emphasis supplied) Section 29(2) of the Limitation Act stipulates that where a special law prescribes a period of limitation for an application different from the period prescribed in the Schedule of Act of 1963, then Section 3 of the Act of 1963 shall apply as if such period was prescribed by the schedule, and the provisions of Sections 4 to 24 shall apply to the extent that it is not expressly excluded by the special Law. The three-Judge Bench in L S Synthetics Ltd (supra) observed that Section 29(2) of the Limitation Act is not appl....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the provisions contained in Sections 4 to 24 "only insofar as, and to the extent to which, they are not expressly excluded by such special or local law". This language, together with our earlier reasoning, particularly with regard to L.S. Synthetics [(2004) 11 SCC 456: (2004) 7 Scale 427] would answer the further question raised by the appellant, namely, whether the question of exclusion of the provisions of the Limitation Act must be separately considered with reference to different provisions of a special/local Act or in connection with the provisions of the special/local Act, as a whole, by affirmation of the first alternative. We are therefore not called upon to decide whether claims either preferred for the first time before the Special Court or transferred to the Special Court under Section 9-A(2) would attract the provisions of Sections 4 to 24 of the Limitation Act. It is enough for the purpose of this appeal to hold that Section 29(2) of the Limitation Act, 1963 does not apply to proceedings under Section 4(2) of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992. Since the appellant's petition of objection had been filed much be....