Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992

The National Housing Bank (NHB) sued State Bank of Saurashtra (later merged with SBI) for recovery of a large cheque amount, alleging that the cheque was drawn for the purchase of IRFC bonds and that the defendant had misappropriated the funds. The case was tried before a Special Court established under the Special Cou…

The Special Director of Enforcement imposed a penalty on Ketan V. Parekh and others under the Foreign Exchange Management Act, 1999. The appellants filed appeals under Section 35 of the Act and sought condonation of a 1,056‑day delay, arguing that the time spent pursuing writ petitions in the Delhi High Court should be…

Standard Chartered Bank (SCB) bought 17% NPCL bonds from Andhra Bank Financial Services Ltd (ABFSL) and later discovered that the bonds had been misappropriated by broker Hiten P. Dalal and Canara Bank Mutual Fund (CMF). SCB filed a suit for conversion and amended it to implead Dalal and CMF, but the Special Court held…

Premanand R. Shenoy became director of Fair Growth Financial Services Ltd after his father's death. The company financed a Mahindra Jeep for him on a hire‑purchase basis, paying Rs 2,83,192 on 22 July 1991 and delivering the vehicle on 15 April 1992 with temporary registration in Shenoy's name. The Custodian, acting un…

State Bank of Saurashtra sold UTI units to P.N.B. and received payment of about Rs 102.65 crore, but failed to deliver the units. P.N.B. sued for specific performance and damages. The Special Court ordered the bank to purchase the units from the open market and deliver them. On appeal, the Supreme Court held that where…

The Supreme Court examined a dispute arising from a money decree that was later set aside, where Citibank N.A. had received 9% IRFC bonds worth Rs.50 crore from Canbank Financial Services Ltd. (Canfina) and subsequently sold them in the market. The issue was how to calculate the restitution amount under Section 144 of …

Standard Chartered Bank sued Canbank Mutual Fund (CMF) for a refund of securities transactions. CMF's written statement, verified by its employee S.R. RamaraJ, claimed the transactions were squared off, a position later contested by the Special Court which held RamaraJ in contempt for allegedly making a false defence a…

The appellant banks entered into ready‑forward (buy‑back) contracts with brokers before June 1992, consisting of a completed ready leg (purchase of securities) and a future forward leg. The Custodian, under the Special Court Act, claimed the contracts were void for violating RBI circulars issued under the Banking Regul…

The Assistant Commissioner of Income Tax sought the release of tax liabilities amounting to Rs. 80,80,198.34 of several notified persons from funds held by a Custodian under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992. The Special Court ordered that the notified persons could …

The Supreme Court examined a dispute arising under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 where Standard Chartered Bank claimed that shares and securities pledged by broker Hiten Dalal were its security against a loss of Rs. 280.80 crore. The Court held that the bank had …

The case concerned the purchase of CANCIGO units worth Rs 33 crore by broker Hiten P. Dalal on behalf of Canbank Financial Services Ltd. (CANFINA) and the alleged involvement of senior CANFINA officials S. Mohan and others. The prosecution alleged that the units, issued in the names of Andhra Bank and its financial ser…

The uncle (complainant) entrusted his 1,200 shares of Great Eastern Shipping Co. to his nephew (appellant) for sale and to remit the proceeds. The nephew sold the shares between December 1991 and January 1992, kept the Rs.1,10,000 sale proceeds and failed to pay the complainant, leading to a criminal breach of trust co…

The case involved five financial transactions between Maruti Udyog Ltd (MUL), a government company, and Harshad S. Mehta (A5), a broker, routed through banks. The CBI alleged that the accused conspired to divert MUL's surplus funds to A5 through fraudulent transactions. The Special Court convicted A1, A3, A4, and A5, a…

The Supreme Court examined the interpretation of Section 11 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, which governs the discharge of liabilities and distribution of attached property of notified persons such as Harshad Mehta. It held that only taxes finally assessed for …

Pallav Sheth was convicted by a Special Court under Section 10 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 for dishonestly misappropriating 20,000 shares and refusing to pay the agreed price of Rs.83 lakh to Canara Bank. The Special Court also ordered a civil decree of Rs.5…

Canbank Financial Services engaged a share broker (Respondent No.2) to sell 10 lakh shares of Reliance Petro Chemicals Ltd. The broker received Rs. 2.90 crores as sale proceeds but failed to remit the amount to the appellant. The broker was later notified under Section 3 of the Special Court (Trial of Offences Relating…

Hiten P. Dalal (appellant) issued four cheques to Standard Chartered Bank between December 1991 and March 1992 for securities transactions. The cheques were dishonoured for insufficient funds and the bank served notices under Section 138 of the Negotiable Instruments Act. Dalal was convicted by a Special Court establis…

Pallav Sheth, a notified company debtor, was ordered by a Special Court to pay a decree and was restrained from alienating his assets. He later set up benami companies and transferred assets, which the Custodian discovered through an Income‑Tax raid. The Custodian filed an application for contempt, alleging Sheth viola…

The Supreme Court considered an appeal by minority shareholders of Bharti Telecom Limited (BTL) who challenged the company’s reduction of share capital under s.66 of the Companies Act, 2013, alleging that the valuation and the notice were unfair and misleading. BTL had cancelled 28.4 million shares held by the appellan…

The appellant, Tej Kumar Balakrishna Rui, was declared a notified person under Section 3(2) of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992. Section 3(3) of the Act provides that any property of a notified person stands attached from the date of notification. After being notifi…

The appellants, who together held over 90 lakh shares in Apollo Tyres, had their holdings attached under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992. The Custodian prepared a scheme for sale of the attached shares, which the Special Court approved, categorising the shares and …

The Supreme Court examined an appeal by the family of the late Harshad Mehta challenging the Special Court's order to sell nine residential flats that had been attached under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992. The appellants argued that Section 4(1) of the Act, which…

The case concerned the discounting and rediscounting of two bills of exchange by UCO Bank, allegedly to provide funds to stock‑broker Harshad Mehta for securities transactions. The Supreme Court examined whether the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 had jurisdiction over…

The case concerned a massive "call money" scam in which Rs 40 crore of National Housing Bank funds were diverted to broker Harshad Mehta’s account through officials of UCO Bank and NHB. The appellants – senior officials of UCO Bank and NHB – were convicted by a Special Court under the Special Court (Trial of Offences R…

Western Press Pvt. Ltd., a company that was not a party to the proceedings before the Special Court under the Securities Act, 1992, sought to prevent its premises from being attached for recovery of public money siphoned through a group of companies. The Special Court had passed a consent decree ordering the respondent…

The appellants, Harshad S. Mehta and others, sought to revoke conditional pardons granted by the Special Court under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, arguing that the Court lacked jurisdiction to grant pardon because the power under Sections 306 and 307 of the Crim…

The Supreme Court examined the validity of the notification of Smt. Rasila Mehta and Smt. Rina Mehta under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, which was based on a complaint by Canbank Financial Services Ltd. The Court held that the notification was proper despite the…

Rahul Subodh Windoor Ltd received a Rs 20 lakh cheque from A.K. Menon (respondent No. 2) for purchase of shares. The Custodian (respondent No. 1), appointed under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, informed the company that the money was liable to be attached as prop…

Canara Bank appealed a decision of the Company Law Board (CLB) that had refused to register bonds purchased from Nuclear Power Corporation of India Ltd. The CLB had been hearing the bank's application under Section 111 of the Companies Act when the Special Court (Trial of Offences Relating to Transactions in Securities…

The appellant, a stock broker, entered into three share purchase contracts with the respondent: two for Reliance Industries Limited (RIL) shares on 14‑Feb‑1992 and 23‑Mar‑1992, and one for Steel Authority of India Limited (SAIL) shares on 27‑Feb‑1992. The respondent delivered only one lakh RIL shares and claimed the fi…

The appellants, Suman L. Shah and Laxmichand Shah, had borrowed money in 1996-1997 from companies later alleged to be benami entities of Pallav Sheth, a notified debtor under the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992. The Custodian sought recovery of Rs.50 lakh and Rs.25 lak…

The appellant, Manjit Singh Sodhi, as trustee of Raviraj Housing Corporation, was sued for repayment of a short‑term loan of Rs 25 lakhs taken from Fairgrowth Financial Services Ltd (FFSL) which resulted in a decree of Rs 63.86 lakhs in 2003. The custodian appointed under the Special Court (Trial of Offences Relating t…

The Supreme Court examined an appeal by the Deputy Commissioner of Income Tax challenging a Special Court order that scaled down the tax priority claim against the assets of Harshad S. Mehta, a notified person under the Special Court Act, 1992. The Income Tax Department argued that the Special Court lacked jurisdiction…

Vinayak Narayan Deosthali, an assistant manager of UCO Bank, was convicted for diverting Rs 7.75 crore of public funds belonging to the Engineering Export Promotion Council (EEPC) to the private account of broker Harshad S. Mehta. The Special Court found that he issued bank receipts for securities that did not exist, f…

The case involved a Rs 65 crore investment in CANCIGO units of Canbank Mutual Fund (CMF) by four subscribers, where B. Raghuvir Acharya (Trustee/General Manager) and Hiten P. Dalal (approved broker) were alleged to have obtained a false brokerage of Rs 32.5 lakhs. The Special Court convicted Acharya and Dalal, but acqu…