- (1.) M/s Kudremukh Iron Ore Company Limited, a government Company, prefers this appeal under Section 10 of the Special court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (for short 'the Act') against the order dated 26/8/1993 made by the Special court at Bombay in Miscellaneous Petition No. 58 of 1993. By the said order the Special court held that in relation to the transactions referred to and relied on by the appellant, it had no jurisdiction to exercise powers under the 'act'.
(2.) The appellant on various dates in July 1992 deposited with the Andhra Bank Financial Services Ltd. under what are called inter-corporate deposits aggregating to about Rs. 55 crores. The deposits were to carry interest ranging from 21% to 22%. It would appear that the Andhra Bank Financial Services Ltd. had, in turn, invested large sums of money said to be in the order of Rs. 240 crores, with a company called the Fairgrowth Financial Services Ltd. When the appellant's deposits with M/s Andhra Bank Financial Services Ltd. fell due for repayment, the latter pleaded its inability to make immediate repayment on the ground that its own funds were locked up with the Fairgrowth Financial Services Ltd.
(3.) The said Fairgrowth Financial Services Ltd. was a 'notified person'under Section 3 (2 of the Act and accordingly the Special court under Section II of the Act had jurisdiction to direct repayment of its liabilities, The appellant, it is not disputed, had no privity of contract with the said Fairgrowth Financial Services Ltd. However, on the stand of the Andhra Bank Financial Services Ltd. that its funds were, in turn, locked up with and retained by the said Fairgrowth Financial Services Ltd. , the appellant moved the Special court for a direction that the securities of the Fairgrowth Financial Services Ltd. in the hands of the custodian be directed to be sold and the proceeds disposed of in favour of the Andhra Bank Financial Services Ltd. and that out of the sums so found payable, the sum of Rs. 54 crores which was then due to the appellant together with accrued interest, be appropriated and applied for the discharge of the appellant's claims.;