SUDHIR S. MEHTA & ORS. versus CUSTODIAN & ANR.

SUDHIR S. MEHTA & ORS. versus CUSTODIAN & ANR.

The Supreme Court held that the scheme of sale of attached shares by the Custodian under the directions of the Special Court and Disposal Committee was legally valid, as previous judgments confirmed the binding nature of such sales for discharging notified liabilities. The determination of individual liabilities or consideration of denotification applications did not preclude the sale, especially as no such denotification was pending. The appellants' objections were either previously addressed or without merit, and procedural directions had been complied with by the Custodian and Special Court. Any future sale must comply with Special Court directions and be supervised by the Disposal...

Parties
Appellants: Sudhir S. Mehta & Ors.; Respondents: Custodian & Anr.
Jurisdiction
India
Judgment Date
16 May 2008
Procedural Posture
Civil Appeal / Appeal From the Order of the Special Court
Outcome
Appeals dismissed.
Legal Topics
Jurisdiction of Special Court, Attachment and Sale of Shares, Denotification of Persons, Determination of Liability, Procedural Fairness in Disposal of Seized Assets
Special Courts (trial of Offences Relating to Transactions in Securities) Act, 1992 Securities Law Jurisdiction of Special Court Attachment and Sale of Shares Denotification of Persons Determination of Liability Procedural Fairness in Disposal of Seized Assets

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Parties

Sudhir S. Mehta & Ors.

Appellants

Custodian & Anr.

Respondents

Procedural Posture

Civil Appeal / Appeal From the Order of the Special Court

Legal Issues

  1. 1 Whether the Special Court and Custodian followed the procedure and directions for sale of attached shares as required by previous Supreme Court judgments and the Special Courts Act, 1992.
  2. 2 Whether sale of shares before determination of individual liabilities and prior to disposal of denotification applications is justified.

Ratio Decidendi

The Supreme Court held that the scheme of sale of attached shares by the Custodian under the directions of the Special Court and Disposal Committee was legally valid, as previous judgments confirmed the binding nature of such sales for discharging notified liabilities. The determination of individual liabilities or consideration of denotification applications did not preclude the sale, especially as no such denotification was pending. The appellants' objections were either previously addressed or without merit, and procedural directions had been complied with by the Custodian and Special Court. Any future sale must comply with Special Court directions and be supervised by the Disposal...

Court Disposition

Appeals dismissed.

Orders

  • The Disposal Committee is to reconsider whether and when the shares should be sold, subject to market and legal advice, in accordance with Special Court directions.
  • Appellants may raise objections in the future process, subject to the observations above.