- (1.) These statutory appeals are filed under Section 10 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act 27 of 1992 (hereinafter referred to as 'the Special Court Act'). An appeal both on questions of fact and law under the above-mentioned provision is provided directly to this Court from any "judgment, decree, sentence or order" of a Special Court established under Section 5 of the above- mentioned Act.
(2.) The Special Court Act was made in the aftermath of a scandal in the stock market in the year 1991-1992 when "large scale irregularities and malpractices were noticed in both the Government and other securities, indulged in by some brokers in collusion with the employees of various banks and financial institutions". ( In the course of the investigations by the Reserve Bank of India, large scale irregularities and malpractices were noticed in transactions in both the Government and other securities, indulged in by some brokers in collusion with the employees of various bonds and financial institutions. The said irregularities and malpractices led to the diversion of funds from banks and financial institutions to the individual accounts of certain brokers. 2. To deal with the situation and in particular to ensure the speedy recovery of the huge amount involved, to punish the guilty and restore confidence in and maintain the basic integrity and credibility of the banks and financial institutions the Special Court (Trial of Offences Relating to Transactions in Securities) Ordinance, 1992 was promulgated on the 6th June, 1992. The Ordinance provides for the establishment of a Special Court with a sitting Judge of a High Court for speedy trial of offences relating to transactions in securities and disposal of properties attached. It also provides for appointment of one or more Custodians for attaching the property of the offenders with a view to prevent diversion of such properties by the offenders.)
(3.) Under Section 3(2)(2) of the said Act, the Custodian appointed by the Government of India, if satisfied that any person was involved in "any offence relating to transactions in securities" during the period falling between 01.04.1991 to 06.06.1992 is empowered to notify the name of such person in the official gazette. Upon such notification, all the properties whether movable or immovable belonging to any person so notified stand attached. The custodian is required to deal with such attached properties in such manner as the Special Court may direct. The Act further authorises the Government of India to establish a Special Court to be presided over by a sitting Judge of a High Court to be nominated by the Chief Justice of the High Court within the local limits of whose jurisdiction the Special Court is to be located. The concurrence of the Chief Justice of India is required to be obtained for such nomination of a sitting Judge of the High Court.;