- (1.) Facts leading to this Appeal are as follows : Appellant engaged Respondent No. 2 as a broker to sell 10,00,000 shares of Reliance Petro Chemicals Ltd. at the rate of Rs. 29/- per share. It is said that those shares were sold and the Respondent No. 2 is liable to collect the sale proceeds and pay the same to Appellant. The payment was, however, not made. In the meanwhile, Custodian appointed under Section 3 of Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (the Act) notified Respondent No. 2, whereby all properties belonging to him stood attached. Appellant filed a Petition before the Special Court for a declaration that the sum of Rs. 2.90 crores received by Respondent No. 2 on behalf of Appellant was not property 'belonging to' him and hence the attachment of that amount is void. There was also a plea to release the said sum in favour of the Appellant.
(2.) Special Court dismissed these prayers vide its order dated 14th September, 1993. Dismissal was on the reasoning that the appellants failed to show that the money was credited into or lying in any particular account. The Special Court further held that all that the appellant entitled is only to a charge on the estate of the respondent No. 2 for recovery of their money. But refused to release the money to appellant. This order is impugned herein. It is also the case of respondent No. 2 that the appellant is liable to pay about Rs. 3 crores to his brother and that he is entitled to set off the sum of Rs. 2.90 crores against the amount due to his brother Harshad Mehta.
(3.) Case put forwarded by the appellant is; that the respondent No. 2 merely acted as agent/broker on behalf of the appellant; that the amounts he received from the sale of their shares should have been handed over to them; that as long as the amounts are not handed over, the respondent No. 2 holds the same in trust for and on behalf of the appellant; that the same is not his property; that the respondent No. 1/custodian ought not to have attached the property since it is not property 'belonging to' respondent No. 2.;