Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992: Certification of tainted shares by Custodian and its release and payment of accruals - Application for - Filed by investor before Special Court - Dismissed on the ground of filing of the application after the cut off date - Justification of - Held: Not Justified - Custodian is justified in filing an application before the Special Court requesting to fix a cut off date for certification of the tainted shares - However, the cut off date fixed by the Special Court cannot be construed so as to have a binding effect of statutory nature under the provisions of the Transaction of Sale of Securities Act, 1956, wherein there is no fixed time limit for encashment of shares nor there is prescribed procedure for certification - Custodian cannot shirk away from his function and the duty cast upon him - Special Court is duty bound to guard the interest of the bonafide investors through the Custodian - On facts, investor had no role or involvement in treatment of the alleged equity shares as tainted which required certification before payment of dividend on the same - Investors cannot be denied his due on the ground of delay in filing the application for certification specially when they sought certification of his shares only after two months of the cut off date which had no statutory force - Transaction of Sale of Securities Act, 1956. Application and interpretation of the provisions under the 1992 Act - Held: Salutary object and reasons of the Act are to be taken into consideration - Different provisions are required to be construed so that each provision will have its play - In case of conflict, a harmonious construction should be adopted so that an honest and bonafide investor is not duped of his hard earned money which he invests by purchasing the equity shares - Interpretation of statutes Object and reasons of the 1992 Act - Explained The appellant - investor purchased 100 equity shares of the respondent No. 2 Company and made payment through respondent No. 4, the share broker. The appellant approached respondent No. 2 Company seeking dividend and other benefits on the shares, however, the appellant was informed that the shares were tainted and thus, his request was rejected. The appellant then filed an application before the Special Courts under the provisions of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992 seeking certification of the tainted shares by the respondent No. 1-Custodian and its release and the payment of accruals. The appellant was informed by the office of the Special Court that the application could not be entertained since it was filed after the cut off date to submit application for certification. The appellant then filed an application before the Special Court that he was not aware of any cut off date regarding the filing of the application for certification of shares as also the procedure for the same. The Special Court dismissed the application. Therefore, the appellant filed the instant appeal u/s. 10 of the Act. Allowing the appeal, the Court HELD: 1.The order of the Special Court is set aside. The respondent- Custodian would entertain the application filed before the Special Court for certification of the shares and verify the claim of the appellant in regard to the shares and ensure payment of dividends on those shares after certification by respondent No. 2. [Para 26] [290-E-F] 2.1 It is admitted by respondent No. 1 - Custodian himself that the appellant who had purchased the shares of respondent No. 2 through respondent No. 4 whose affairs were later taken care of by respondent No. 3 also and perhaps respondent No. 5, would clearly be deemed to be bonafide purchase. However, since the shares were held to be tainted by order of the Government of India due to which it was not honoured by respondent No. 2, the need arose for its certification through the Custodian under the control and supervision of the Special Court constituted under the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992. Meanwhile, long time had elapsed between the date of purchase and the application for certification of the shares and obviously during this long period it is the respondent-Custodian in co-ordination with the notified company and respondent Nos. 3 and 4- share brokers who was responsible to certify the shares of the notified company so that the dividends accruing on the shares could be paid. In the process, no doubt, respondent No. 1- Custodian encountered several procedural hassles as the claim of payment were made at frequent intervals by large number of investors holding the shares which were informed to be tainted and thus, required certification by the Custodian. [Para 20] [285-E-H; 286-A-B] 2.2 Respondent No. 1-Custodian although might have been justified in filing an application before the Special Court requesting to fix a cut off date during which it could facilitate certification of the tainted shares, the cut off date sought by the custodian and accepted by the Special Court cannot be construed so as to have a binding effect of statutory nature under the provisions of the Transaction of Sale of Securities Act, 1956, wherein there is no fixed time limit for encashment of shares nor there is prescribed procedure for certification which emerged only on account of extra-ordinary situation when certain shares were found to be tainted which were floated by respondent No. 5 for respondent No. 2 and were traded through share brokers like respondent No. 3 and 4. [Para 21] [286-C-E] 2.3 The salutary object and reasons of the Act also would have to be taken into consideration while interpreting and applying the provisions of a statute wherein efforts are required to be made in construing the different provisions so that each provision will have its play and in the event of any conflict, a harmonious construction is required to be made so that an honest and bonafide investor is not duped of his hard earned money which he invests by purchasing the equity shares of a company. The Act of 1992 had been enacted and given effect to in order to prevent undesirable transactions in securities by regulating the business of dealing therein as also certain other matters connected therewith which also provided for the establishment of a special court for the trail of offences relating to transaction in securities and for matters connected therewith or incidental thereto. The courts specially the Special Courts has to bear in mind the objects and reasons of the Act which clearly indicate that in course of the investigations by the Reserve Bank of India, large scale irregularities and mal practices noticed in transactions by both the Government and other securities through some brokers in collusion with the employees of banks, companies and financial institutions. The other irregularities and malpractices led to the divergence of funds from banks and financial institutions to the individual accounts of certain brokers. In order to deal with the situation and in particular to ensure speedy recovery of the huge amount involved, to punish the guilty and restore confidence and to maintain the basic integrity and credibility of the banks and financial institutions, the Act of 1992 was enacted for speedy trial of offences relating to transactions in securities and disposal of properties attached. This Act envisages the appointment of one or more custodians to take steps for guarding the interests with a view to check the diversion of funds invested in the form of shares by the offenders which may be in the form of companies or share brokers. Therefore, the duty of the Custodian as also the Special Court is to take into consideration that while the plea of the Custodian for facilitating certification of shares by fixing cut off date might have been reasonable in the given situation where large number of investors were filing applications for certification of the tainted shares time and again and thus, cut off date might have been justified, it was also expected to take care and guard the interest of the investors who are based and live not merely within the geographical boundaries of the Special Court which had fixed the cut off date but also live far and wide even across the boundaries of the country which is the fact in the instant matter also. [Para 22] [286-F-H; 287-A-H] 2.4 It was obligatory on the part of the Special Court and the Custodian to notice an important fact that when the shares purchased by the appellant were reported to be tainted which was issued through respondent No. 5 Company by the share broker companies i.e. respondent No. 4 and 5 and the same was ordered to be attached by the Custodian in view of the Government of India Regulation, it was clearly nefarious and dubious activity on the part of the respondent No. 5 due to which the unnecessary hassle of certification of the shares issued in the name of respondent No. 5 became essential. The investors like the appellant had absolutely no role in such activity and thus, even if the cut off date was fixed by the Special Court for certification of such shares, the same could not have been enforced oblivious of its repercussion on those investors who could not approach the Special Court for certification for reasons beyond their control as it has happened in the case of the appellant who could not approach the Special Court for certification of his tainted shares for aforestated reasons. [Para 22] [286-H; 288-A-D] 2.5 The appellant had filed an application before the Special Court seeking a direction for certification of the shares on 27.8.2005 which even if counted from the cut off date, would at the most was delayed by two months as the appellant had not received any notice which could be proved, indicating that the application for certification had to be filed by 27.6.2005 although the same is asserted by the Custodian, which cannot be accepted in absence of appearance of respondent Nos. 3, 4. But even it if were so, the court should have certainly considered the circumstance whether a bonafide purchaser of shares could be denied his due merely on the ground of violation of a cut off date which clearly did not have its existence in the statue, and thus, had no statutory force. The order sought from the Special Court to fix a cut off date for receiving application for certification was, thus,based merely on the theory of convenience of the Custodian clearly ignoring its ramification on the bonafide investor. It is common knowledge that when public at large invest in securities by purchasing shares of a notified company, it purchases through various modes including the modern tools and technique of internet and many other modern modes and methods. But thereafter, if the shares are held to be tainted which is clearly beyond the control of the investor and its certification is required, it is surely the custodian in co-ordination with the company floating shares as also the share broker company or the stock exchange, which has the onus and responsibility to take care of the interest of the investors under the supervision of the Special Court in view of the provision of the 1992 Act. Thus, the Custodian cannot shirk away from his function and the duty cast upon him by limiting his responsibilities and seeking a cut off date during which only he could perform the duty of certification, oblivious of its consequence and other ramification on the investors which include small investors also who put in their hard earned money in the shares of the company and later comes to know that the shares were tainted on which they have absolutely no role or control.[Para 23] [288-E-H; 289-A-E] 2.6 The Special Court clearly had the duty to ensure that in absence of statutory time limit prescribed for certification of shares under the Act of 1956, read with the Special Courts Act of 1992, the Special Court was duty bound to guard the interest of the investors through the Custodian at least in case of those investors who had bonafide purchased the shares of a notified company which for reasons beyond the control of investors, was held to be tainted. [Para 24] [288-F-G] 2.7 The appellant on the one hand was saddled with the tainted shares for no-fault on his part through respondent Nos. 4, 5 and 6 on which he had no control or any role to play and on the top of it, when he sought a remedy of certification for claiming dividends, he had to suffer an order by which his application was rejected on the ground that he had not moved an application within the cut off date which had no statutory force as the same had been fixed at the instance of the Custodian seeking approval from the Special Court. [Para 25] [290-B-D] CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No. 948 of 2006. From the Judgment & Order dated 28.11.2005 of the Special Court Constituted Under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 in Misc. Application No. 536 of 2005. Pravin Satale, Naresh Kumar for the Appellant. Subramonium Prasad, Shyam D. Nandan, Shweta Mazumdar, Rajat Khattri for the Respondents.

                                                    Reportable


            IN THE SUPREME COURT OF INDIA
           CRIMINAL APPELLATE JURISDICTION

            CRIMINAL APPEAL No. 948 OF 2006


Varghese K. Joseph                                  .. Appellant
                            Versus

The Custodian & Ors.                              ..Respondents




                JUDGMENT



GYAN SUDHA MISRA, J.



          This appeal has been filed under Section 10 of

the   Special   Courts   (Trial   of   Offences     Relating   to

Transactions in Securities) Act, 1992 (hereinafter referred to

as `the Special Court Act of 1992') challenging the order

dated 28.11.2005 passed by the Special Court constituted

under the Special Courts Act 1992 bearing Miscellaneous

Application No. 536 of 2005 whereby the Special Court was

pleased to reject the application summarily indicating that

the application of the appellant for certification of shares by
the respondent - Custodian had been received on 27.8.2005

after the cut off date for the certification due to which it

could not be entertained.

2.        The    question    inter   alia   which   arises   for

consideration in this appeal may be crystallised and stated

as to whether the Special Court was right in rejecting the

application of the appellant-investor seeking certification of

the tainted shares on the ground of delay due to violation of

cut off date in spite of absence of a statutory provision to

that effect as also the fact that the appellant-investor

admittedly had no role or involvement in treatment of the

alleged equity shares as tainted which required certification

before payment of dividends on the same.

3.        The substantial details and circumstances under

which this appeal arises indicate that the appellant herein

who is a small investor had purchased 100 equity shares of

the respondent No.2 Company namely Reliance Industries

Ltd. on 12.6.1989 and       payment of the same was made

through his share broker - respondent No.4 - Abex and

Company which perhaps is not in existence now. However,

the payment for purchase of the shares had admittedly been



                              2
made through Union Bank of India by way of a demand

draft.   It is the case of the appellant herein that the

respondent No.4 despite repeated enquiries never informed

the appellant regarding the status of his shares and hence

the appellant was absolutely in dark and had no clue about

the same.     The appellant in the meantime was also living

abroad due to his professional obligation and could not

ascertain the fate of his shares.

4.           However, when the appellant finally approached

respondent No.2 - Reliance Industries Ltd.                 seeking

dividend and other consequential benefits like issue of

rights and       bonus on shares, it was informed to the

appellant by the respondent No.2 that the shares of the

appellant on which dividend was claimed, were found to be

tainted and hence it was unable to consider the request of

the appellant for payment of dividends.            The appellant,

thereafter    also   learnt   that   there   had    been   mutual

correspondence between the share broker companies i.e.

respondent No.3 Karvy Consultants Ltd.             and respondent

No.4 - Abex and Company for taking the accounts of the

shares in question vide Annexure-P1 in order to complete



                                3
certain procedural formalities. But as per the case of the

appellant, neither the respondent No.3 nor respondent No.4

cared to inform the appellant about the said development

through which he had purchased the shares. The appellant

has annexed the copy of the letter dated 12.7.1995 vide

annexure P-1 which was written by the respondent No.4 -

Abex     and   Company    to   Respondent     No.3   -   Karvy

Consultants Ltd.

5.         Since the appellant had been informed by the

respondent No.2 - Reliance         Industries Ltd. that the

dividends could not be paid to him as the shares were held

to be tainted, the appellant also tried to ascertain the status

of his shares purchased by him through respondent Nos. 3

and 4.   However, it is alleged by the respondent No.3 -M/s.

Karvy Consultants Ltd. that it had informed the appellant to

submit appropriate application seeking certification of the

tainted shares as the equity shares in question stood in the

name of M/s. Fair Growth Financial Service Ltd.          which

subsequently became the subject matter of attachment as

per the order of the Government of India since it was found

to be involved in some scam and hence the shares issued by



                               4
this company required certification by the Custodian as per

order of the Special Court (Trial of Offences relating to

Transactions in Securities) Act, 1992. But the appellant's

case is that he never received the said communication nor

the said letter indicated anything about the cut off date for

making application for certification of the tainted shares.

Annexure P-2 is the copy of the letter dated 5.1.2001 which

is allegedly written   by the respondent No. 3- M/s. Karvy

Consultants Ltd. to the appellant directing him to file the

application seeking certification of shares.

6.         The appellant in the meantime had also made

further enquiries in regard to the certification of the tainted

shares and also for consequential benefits which accrued on

the shares in question. He then learnt that he would have

to file an application before the Special Court seeking

direction to the Custodian for certification of shares as it

was reiterated that the shares in question stood in the name

of M/s. Fair Growth Financial Services Ltd. - respondent

No.5 which were the subject-matter of attachment as per

the Government of India order since they were found to be

tainted.   A clarification also is alleged to have been issued



                              5
by the respondent No.3 -Karvy Consultants Ltd. that in

order to do justice to the bonafide investors, the Special

Court in its orders dated 27.7.1992 and 31.7.1992 bearing

Misc. Application Nos. 1, 2 and 3 of 1992 laid down a

procedure for certification of the tainted shares through the

representative of the Custodian. It was informed that the

said Hon'ble Court had fixed the last date for submission of

such application for certification which was 16.8.1995 and

the Special Court had further directed that whoever fails to

submit application for certification on or before 16.8.1995,

the party would have to approach the Special Court directly

for certification. Subsequently, the cut-off date appears to

have been extended to 27.06.2005 as per order of the

Special Court on application having been made by the

custodian. Hence, it claims to have requested the appellant

- Mr. Joseph that he should file an application/petition

mentioning therein the reliefs/directions intended to be

sought from the Hon'ble Special Court (Torts) through the

advocate along with the documents, papers at the address

of the Special Court which was stated therein.        It was

further requested to the appellant to forward the relevant



                             6
order from the Special Court along with original share

certificates and transfer deeds to enable it to do the needful.

But the appellant's case is that he never received the said

communication etc.

7.         As per the appellant's version the original shares

and transfer deeds had been       delivered to the respondent

No.4 -Abex and Company - the share broker company

through whom the appellant had purchased the shares as

under the rules, the share certificates were not issued from

the company to the appellant but the same was lying in the

hands of    respondent No.3 i.e. Karvy Consultants Ltd.

through respondent No.4 and so the        appellant could not

produce the share certificates.     However, the respondent

No.4 -Abex and Company had assured the appellant that it

would return the share along with the Clearance Certificate

from the Stock Exchange but the respondent No. 3 i.e.

Karvy Consultants Ltd. was unable to process the share

through respondent No.6 - Madras Stock Exchange as they

were tainted.   The appellant, therefore, stated that he is a

bonafide purchaser and the owner of 100 tainted shares of

respondent No. 2 and the said shares were required to be



                              7
transferred in the name of the appellant along with all the

accrual till dates after certification.    The appellant as

already stated also learnt that the tainted shares required

certification through respondent No.1 - the Custodian and

for this purpose he would be required to seek permission

from the Special Court under the Special Courts Act of

1992.

8.          In view of the aforesaid position, the appellant

filed an application before the Special Court under the

provisions of Special Courts Act of 1992 wherein he prayed

for   certification of the shares by the respondent No.1 -

Custodian and its release and payment of accruals but as

per the letter from the office of the Special Court it was

intimated      that the last date to submit application for

certification was 27.6.2005 and hence it could not be

entertained.

9.          The appellant, therefore, filed an application

before the Special Court on 27.08.2005 stating that he was

not aware of any cut off date regarding the filing of the

application for certification of shares by the Custodian and

was also not aware of the procedure or the last date of filing



                              8
any application for certification until he received the letter

on 22.8.2005. Hence, the appellant/applicant was not able

to file any application for certification of the tainted shares

within the time fixed by the Special Court.

10.        The learned Judge of the Special Court however,

was pleased to dismiss the application on 28.11.2005

stating that the plea of the applicant that he was not aware

of the procedure laid down          by the Special Court     for

certification   of the tainted securities   etc. was devoid of

merit   and     the   application     seeking   permission   for

certification which was received on 27.8.2005 i.e. after the

cut off date which was subsequently extended to 27.6.2005

was not found fit to be entertained. Hence, the application

was dismissed by the Special Court against which this

appeal has been filed by the appellant under Section 10 of

the Special Courts Act of 1992 as already indicated

hereinbefore.

11.        A show cause notice was issued to all the

respondents in this appeal but no one appeared except

respondent No.1 - the Custodian based at Mumbai who has

filed reply in this appeal. As per the reply of the Custodian



                                9
- Respondent No.1 herein, the process of certification was

being done       on a    regular basis.   But on    31.1.2005, the

Custodian gave a          report to the Special Court that the

Custodian/Notified party receives accrual on shares which

were in the name of the notified party but the same were not

physically with the Custodian since such shares were with

the 3rd party. Further, in respect of shares which may not

be in the name of the notified party but which may have

been dealt with by the notified party, the dividends on such

shares were either kept in abeyance by the company or were

passed on to the Custodian by the companies pending

certification.

12.        It is in view of the aforesaid procedure as also the

fact that the shares were found to be tainted, the

certification    of     the    shares   purchased    through    an

intermediary which in this case is respondent No.4 - Abex

and Company and respondent No. 3 -Karvy Consultants

Ltd., became necessary. But it appears that the Custodian

had been receiving            applications for certification of the

tainted shares off and on which dividend was to be paid to

the party holding the shares and was to be disbursed to



                                    1
them through the Custodian. It has been admitted by the

Custodian in his reply that the dividends which were

received by the Custodian came automatically         from the

company either by way of dividend warrants or through the

Electronically Clearing System (ECS). The Custodian stated

that these dividends were not kept separately from other

moneys      of the concerned notified party in the attached

accounts.     It was therefore suggested that bonus shares

may be kept in abeyance by the companies or may be sent

to the Custodian     by the concerned companies.      In such

case also bonus shares received by the Custodian were

disposed of by the Custodian as per the procedure for sale

of shares laid down by the Special Court.

13.         It was further stated by the custodian in his reply

that the distribution/ad hoc payments from the attached

account of the     notified parties admittedly   were made in

accordance      with the order passed by the Special Court

from the moneys that were available in the attached bank

account of the notified parties as these attached accounts

also included    accruals (dividends/sale proceeds of bonus

shares) which was not separate from other moneys         in the



                               1
attached account.          It was, therefore, submitted before the

Special Court        by the Custodian in Miscellaneous Petition

No.1    in Bombay Stock Exchange vs. The Custodian and

Assistant Commissioner of Income Tax along with a batch of

several other analogous petitions that as there was no time

limit   for the   affected persons to approach the           Hon'ble

Special Court for certification and such certification could

be directed by the Hon'ble             Court (Special Court) at any

point   of   time,    it    was   apprehended       that    in   such

circumstance a situation might arise where shares may be

allowed to be certified        by the Hon'ble Court        even after

substantial       payments were made either by way of

distribution or ad hoc payments due to which it would be

difficult for the Custodian to pay over the accruals              on

certified shares for want of             moneys    in the attached

accounts.     A direction, therefore, was sought by the

Custodian from the Special Court to the following effect:-



         "(a) That a Pubic Advertisement be issued
         by the Custodian calling upon all persons
         holding "Tainted" shares (i.e. shares either
         standing in the name of a notified party or
         dealt with by the notified party) to submit
         their applications for certification of such


                                   1
       shares to this Hon'ble Court within such
        period as this Hon'ble Court considers
        appropriate.

        (b)                That no applications for
        certification will be entertained by the
        Custodian or by this Hon'ble Court on the
        expiry of such period as the Court may direct
        under Clause (a).

        (c)        That no claims shall lie against the
        Custodian or against a notified party for
        payment of accruals on shares with the third
        party unless such third party has filed his
        application for certification within the period
        specified in Clause (b).

        (d)      Any other orders/directions as
        deemed fit by this Hon'ble Court in the
        matter."


14.          The Special Court taking an overall view of the

matter granted the request in terms of prayer clause (a), (b)

and (c).     However, for the purpose of clause (a) 60 days

period was fixed.

15.          Pursuant to the   order dated 16.3.2005 notices

were issued in 32 dailies which stipulated that the

application for certification by the purchasers must be

made       within 60 days from the date of issuance of the

notice. It was also clearly stipulated that no application for

certification would be entertained after the period of 60 days



                               1
from the date of notice and that no claims shall lie against

the Custodian or against the notified party after the lapse of

60 days of the     notice.   The public notice which were

published in 32 different newspapers is dated 29.4.2005.

Thus, according to the respondent - Custodian no claim for

certification could have been entertained after the expiry of

60 days period which expired on 27.6.2005.

16.       The appellant, however, filed an application

bearing Misc. Application No.536/2005 in the Special Court

at Bombay on 27.8.2005 praying therein for a direction to

the Custodian      that the 100 shares purchased by the

appellant herein    bearing Certificate Nos. 3489027 and

8170517, Distinctive Nos. D-915292605 to 654 and D-

114196259 to 308 of the notified company may be declared

as    bonafide purchaser/owner of the said shares.          A

direction was sought to the Custodian and/or company to

release/pay all the accruals declared from time to time till

date on the said 100 shares.        As already stated, the

application was rejected by the Special Court by a

summary order indicating that the application could not be




                              1
entertained since the same had been received after the cut

off date of 27.6.2005.

17.       Challenging the order passed by the Special

Court, the counsel for the appellant submitted that the

application filed by the appellant for certification of his

shares and thereafter granting consequential         benefits

accruing on the 100 shares which were purchased by the

appellant, could not have been rejected only on the ground

that it had been filed beyond the cut off date i.e. 27.6.2005

as the appellant who was     not in the country throughout

and was living abroad had not been informed at all by any

of the concerned respondents that the shares were tainted

which required certification within a cut off date and when

he made enquiries on his own, he could know of the

developments.

18.       Learned counsel for the respondent - Custodian

however sought to justify when he submitted that the

rejection of the application by the Special court for

certification of the shares of the appellant was absolutely

correct as the     Special Court itself had permitted the

Custodian to publish     a notice inviting applications   for



                             1
certification of the shares held by the           public at large in

which   60 days time was granted to file such application

which   expired    on     27.6.2005.       The    counsel    for   the

respondent - Custodian        submitted that        the cut off date

having been laid down by the Special Court fixing a cut off

date for filing application for certification of the shares

through the Custodian, could not have been entertained

beyond the cut off date and hence even though the

appellant might be a bonafide purchaser of the shares of

respondent No. 2 - Reliance Industries Ltd.              which was

purchased through respondent No.4 - Abex and Company,

the same could not have been entertained for certification

after the cut off date.

19.        While    testing    the     relative   strength    of   the

submission of the learned counsel for the parties in the

light of the background,       facts and circumstances of the

case, it could not be overlooked that the transaction of sale

of securities (as defined under the Securities               (Control)

Regulation Act, 1956) by a notified person either as a

registered holder or as an intermediary purchaser is

deemed to be bonafide provided such a transaction under



                                1
the provisions of      Securities Contracts (Regulation) Act,

1956 is effected through a         number of stock exchanges

recognised under the provisions of Securities Contract Act

and is in accordance with      the rules and bye-laws of the

stock exchanges. It further lays down that the purchase

will be deemed to be bonafide provided the sale      is at the

price which is lower than the lowest price for which the

securities    were traded     on the date of the transaction

except in cases of discount given on bulk purchased by

the institutions and     the full sale price   relating to the

transaction is proved to have been received by the notified

persons.

20.          The aforesaid position is clearly admitted by the

Custodian - Respondent No.1 himself which is borne out

from the reply filed by him. Thus the appellant who had

purchased the shares of the respondent No.2 - Reliance

Industries Ltd.      through respondent No.4 - Abex and

Company       whose affairs    were later taken care of    by

respondent No.3 - Karvy Consultants Ltd. also and perhaps

respondent No.5 - M/s. Fair Growth Financial Service Ltd.

would clearly be deemed            to be bonafide   purchase.



                               1
However, since the shares in question were held to be

tainted by order of the Government of India due to which it

was not honoured by the respondent No.2 - Reliance

Industries Ltd., the need arose for its certification through

the Custodian under the control and supervision of the

Special   Court   constituted       under   the   Act   of   1992.

Meanwhile, long time had elapsed between the date of

purchase and the application for certification of the shares

and obviously during this long period it is the respondent -

Custodian in coordination with the notified company and

the share brokers respondent Nos. 3 and 4 (Karvy

Consultants Ltd. and Abex and Company)                  who was

responsible to certify the shares of the notified company so

that the dividends accruing on the shares could be paid.

In the process, no doubt, the respondent No.1 - Custodian

encountered several procedural         hassels as the claim of

payment were made at frequent intervals by large number

of investors holding the shares which were informed to be

tainted and hence required certification by the Custodian.

21.       The respondent No.1 - Custodian, therefore,

although might have been justified in filing an application



                                1
before the Special Court requesting to fix     a cut off date

during which it could facilitate certification of the tainted

shares, the cut off date sought by the custodian and

accepted by the Special Court cannot be construed so as to

have a binding effect of statutory nature under the

provisions of the Transaction of Sale of Securities Act, 1956,

wherein there is no fixed    time limit   for encashment of

shares nor there is prescribed procedure for certification

which emerged only on account of extraordinary situation

when certain shares were found to be tainted which were

floated by Respondent No.5 M/s. Fair Growth Financial

Services for Respondent No.2 - Reliance Industries and

were traded through share brokers like Respondent No.3

and 4 herein.

22.       At this stage the salutary object and reasons of

the Act also will have to be taken into consideration while

interpreting and applying the provisions of a statute

wherein efforts are required to be made in construing the

different provisions so that each provision will have its play

and in the event of any conflict, a harmonious construction

is required to be made so that an honest and bonafide



                              1
investor is not duped of his hard earned money which he

invests by purchasing the equity shares of a company.

Admittedly, the Trial of Offences Relating to Transactions in

Securities Act, 1992 had been enacted and given effect to in

order to prevent undesirable transactions in securities by

regulating the business of dealing therein as also certain

other matters connected therewith which also provided for

the establishment of a special court for the trial of offences

relating to transactions in securities and for matters

connected therewith or incidental thereto.      The    courts

specially the Special Courts under the Act of 1992 has to

bear in mind the objects and reasons of this Act which

clearly indicate that in course of the investigations by the

Reserve Bank of India, large scale irregularities     and mal

practices    were noticed in transactions by both the

Government and other securities through some brokers in

collusion with the employees of      banks, companies and

financial   institutions.   The   other   irregularities   and

malpractices led to the divergence of funds from banks and

financial institutions to the individual accounts of certain

brokers.    In order to deal with the situation and in



                              2
particular to ensure speedy recovery of the huge amount

involved, to punish the guilty and restore confidence and to

maintain the basic integrity and credibility of the banks and

financial institutions, the Special Courts (Trial of Offences

Relating to Transactions in Securities) Act, 1992 was

enacted for speedy trial of offences relating to transactions

in securities and disposal of properties attached. This Act

envisages the appointment of one or more custodians to

take steps for guarding the interests with a view to check

the diversion of funds invested in the form of shares by the

offenders which may be in the form of companies or share

brokers. Therefore, the duty of the custodian as also the

special court is to take into consideration that while the

plea of the custodian for facilitating certification of shares

by fixing   cut off date might have been reasonable in the

given situation where large number of investors were filing

applications for certification of the tainted shares time and

again and hence cut off date might have been justified, it

was also expected to take care and guard the interest of the

investors who are    based and live not merely within the

geographical boundaries of the Special Court which had



                              2
fixed the cut off date but also live far and wide even across

the boundaries of the country which is the fact in the

instant matter also. Hence, in our considered view, it was

obligatory on the part of the Special Court and the

Custodian to notice an important fact that when the shares

purchased by the appellant were reported to be tainted

which was issued through Respondent No.5-M/s. Fair

Growth Company by the share broker companies i.e.

Respondent No. 4 and 5 and the same was ordered to be

attached by the Custodian in view of the Government of

India Regulation it was clearly nefarious and dubious

activity   on the part of    the Respondent No.5-M/s. Fair

Growth     Financial   Service       Ltd.   due   to   which     the

unnecessary hassle of certification of the shares issued in

the name of M/s. Fair Growth Company became essential.

The investors like the appellant herein had absolutely no

role in such activity and hence even if the cut off date was

fixed by the Special Court for certification of such shares,

the same could not have been enforced oblivious                of its

repercussion on those investors who could not approach

the Special Court for certification for reasons beyond their



                                 2
control as it has happened in the case of the appellant

herein who could not approach the Special Court for

certification of his tainted shares for reasons which have

been elaborated hereinbefore.

23.         In the instant matter, we have noticed that the

appellant/applicant had filed    an application before the

Special Court seeking a direction for certification   of the

shares on 27.8.2005 which even if counted from the cut off

date, would at the most was delayed by two months as the

appellant    had not received any notice which could be

proved, indicating that the application for certification had

to be filed by 27.6.2005 although the same is asserted by

the respondent-Custodian, which cannot       be accepted in

absence of appearance of respondent Nos. 3 and 4. But

even if it were      so, the Court should have certainly

considered the circumstance whether a bonafide purchaser

of shares could be denied his due merely on the ground of

violation of a cut off date which clearly did not have its

existence in the statute and hence had no statutory force.

The order sought from the Special Court to fix a cut off date

for receiving application for certification was, therefore,



                             2
based merely on the theory of convenience of the custodian

clearly ignoring its ramification on the bonafide investor. It

is common knowledge that when public at large invest in

securities by purchasing shares of a notified company, it

purchases through various modes including the modern

tools and technique of internet and many other modern

modes and methods. But thereafter, if the shares are held

to be tainted which is clearly beyond the control of the

appellant/investor and its certification is required, it is

surely the custodian in co-ordination with the company

floating shares as also the share broker company or the

stock exchange, which has the onus and responsibility to

take care of the     interest       of the investors under the

supervision of the Special Court in view of the provision of

the Special Courts Act of 1992. The `Custodian'       therefore

cannot   shirk away from his function and the duty cast

upon him by limiting his responsibilities and seeking a cut

off date during which only he could perform the duty of

certification, oblivious of its consequence         and other

ramification   on the investors         which include    small

investors also who put in their hard earned money in the



                                2
shares of the company and later comes to know that the

shares were tainted on which the investor has absolutely no

role or control.

24.        Even if we were to appreciate certain limitations

on the discharge of duties of certification by the Custodian,

the Special Court clearly   had the duty to ensure that in

absence of a statutory time limit prescribed for certification

of shares under the Act of 1956, read with the Special

Courts Act of 1992, the Special Court was duty bound to

guard the interest of the investors through the Custodian

at least in case of those investors who had bonafide

purchased     the shares of a notified company which for

reasons beyond     the control       of investors, was held to be

tainted.

25.        Hence, in our considered opinion, the appellant

under the facts and existing         circumstances   of the case

where he ended up buying tainted shares for no fault on

his part but had to seek its certification from the Custodian

under compelling circumstance which was not his creation

and also had no control, could not have been denied           his

due on the ground of delay in filing the application for



                                 2
certification specially when the appellant had sought

certification of his shares only after two months of the cut

off date for reasons beyond his control which cut off date

has no statutory effect or legal force. The appellant on the

one hand was saddled with the tainted shares for no fault

on his part through respondent Nos. 4, 5 and 6 on which he

had no control or any role to play and on the top of it, when

he sought a remedy of certification for claiming dividends,

he had to suffer an order by which his application was

rejected on the ground that he had not moved an

application within the cut off date which had no statutory

force as the same had been fixed at the instance of the

Custodian seeking approval from the Special Court.

26.       As a consequence of the aforesaid discussion, we

set aside the impugned order of the Special Court and allow

this appeal as a result of which the respondent - Custodian

shall entertain the application filed before the Special Court

for certification of his shares and verify the claim   of the

appellant in regard to the shares bearing Certificate Nos.

3489027 and 8170517       Distinctive Nos. D-915292605 to

654 and D-114196259 to 308 and ensure payment of



                              2
dividends   on   those   shares   after    certification       by    the

respondent No.2.     If necessary the Custodian may co-

ordinate with the concerned stock exchange and the share

broker companies i.e. respondent No.4 - Abex and Company

as also respondent No.3 - Karvy Consultants Limited for

ensuring release of payment accruing as dividend on the

shares noted hereinbefore. In case of default in any manner,

it shall be the duty of the Custodian to take recourse to the

remedy against any defaulting party in accordance with law.

The appeal accordingly is allowed.



                                     ....................................J
                                           (Markandey Katju)



                                  ....................................J
                           (Gyan Sudha Misra)


New Delhi,
January 31, 2011




                              2

By depositing an agreement of sale, no valid deposit of title deeds can be created

THE HONOURABLE MR JUSTICE B.PRAKASH RAO AND THE HONOURABLE SRI JUSTICE R.                    
C.C.C.A.No. 301 OF 2007

17-04-2009

M/s Bharat Tubes & Tins Printers
A Partnership Firm rep. By its partner Smt. Anita Kedia

The Andhra Pradesh State Financial Corporation Ltd.,
A Govt. Corporation, havings its office at C hirag Ali Lae, Nampally,
Hyderabad being rep. By its Managing Director and Others

Counsel for the Appellant :SRI V.RAMA KRISHNA REDDY    
Counsel for Respondents No. 1 to 4:
Counsel for Respondent NO.4-KONDAPUR VIJAYA KUMAR REDDY          
Counsel for Respondent No.5- A.V.SARNAM  
:JUDGMENT: ( Per the Hon'ble Sri Justice B.Prakash Rao)

        The plaintiff who is unsuccessful, is the appellant in this appeal which
is sought to be filed against the judgment and decree in O.S.No. 177 of 2000,
dated 30-8-2007 on the file of the IX Additional Chief Judge ( Fast Track
Court), City Civil Court, Hyderabad in dismissing the suit filed by him seeking
for declaration as against the document in question namely the alleged deposit
of title deeds dated 24-11-1982 as illegal, void and unenforceable and for a
permanent injunction restraining the
1st defendant-1st respondent namely the Andhra Pradesh State Financial
Corporation Ltd.,  from interfering with possession and enjoyment over the suit
schedule property and for further direction against the defendant No.1 to pay a
sum of Rs.12,00,000/- with interest at 24% per annum from 9-8-1999 till the date
of realization and the costs.
        Heard Sri D. Prakash Reddy, learned Senior Counsel appearing for the
appellant and Sri Challa Sitaramaiah, learned Senior Counsel appearing on behalf
of the respondents.
        The case of the appellant-plaintiff as per the averments contained in the
plaint which has been filed on 23-8-1999 is to the effect that the appellant (
herein after called as the "Plaintiff" ) is a registered partnership firm
constituted on 2-4-1994 for the purpose of manufacturing pipes, tubes, cycle
parts, hospital equipment etc., which has been carrying on business in
LUX-1 Shed, Industrial Estate, Sanathnagar, Hyderabad admeasuring to an extent
of 8319.11 sq. yards  of land together with Industrial Shed in Plinth area of
3126.66 square yards.   The Shed was purchased by the 2nd Defendant and 3rd
defendant under the Sale Deed, dated 28-3-1987 and subsequently partners of the
said firm purchased the said property under two different sale deeds and shown
them as the joint stock property of the firm.  The said property was mortaged
with the  State Bank of  Hyderabad for obtaining working capital loan to a tune
of Rs.2 Crores.  It is the case of the plaintiff that at the time of the
purchase, though sufficient enquiries were made, but nothing has come to their
notice nor disclosed by the defendants. Hence, the plaintiff is a  bona-fide
purchaser.  However, on 14-12-1992 some of the officials of the defendant No.1
came to the premises in the afternoon and stated that the property would be
seized for realization of the goods.  Further, the seizure was effected against
the property without any notice.   It is further pointed out that the defendant
No.1 never visited or inspected the suit premises from 1987 to till 1992.  The
plaintiff had  approached  before this court by filing W.P.No. 16269 of 1992
challenging the said action, where in the counter affidavit filed by defendant
No.1, it is stated that the defendant No.2 had created a mortgage by deposit of
title deeds namely depositing the agreement of sale on 24-11-1982.  Therefore,
the writ petition was disposed of on 23-6-1999 directing the plaintiff to go to
civil Court for appropriate reliefs.  In the said proceeding as per the
direction given by this Court, the plaintiff deposited Rs.12,00,000/-  with
defendant No.1 on 9-8-1999.  It was stated that the alleged agreement of sale
dated 23-11-1982 was preceded by letter dated 23-11-1982.   As such, they have
no objection to defendant No.2 to mortgage with defendant No.1 provided the
balance amount is paid.
        The Defendant No.1 has not paid the balance and cost to the said defendant
No.3.   Therefore, on the face of it, according to the plaintiff the alleged
deposit of title deeds does not create a mortgage, since it is unstamped,
unregistered and quite contrary to the provisions of the Stamp Act and
Registration Act and therefore, the 1st defendant Corporation cannot proceed
against the said property under the foot of the said mortgage.  Hence, the suit
for declaration that the said transaction does not amount to a  valid mortgage
and unenforceable and for consequent relief as stated as above.
        Defendant No.1 contested the suit claim and the relief as sought for inter
alia denying the various allegations made in the plaint and further pointed out
the plaint property alleged by Defendants No.2 and 3 and that the financial
assistance provided by Defendant No.1 acquiring the same.  However, the amount
was paid to Defendant No.3 directly, therefore, a formal agreement of sale was
executed by Defendant No.3 in favour of defendant No.2, who in turn confirming
the deposit of sale agreement.  Having regard to the said nature of transaction,
defendant No.1 has charged over the property which is within the knowledge of
defendant No.2 who confirmed the said transaction. Therefore,  the grievance of
the plaintiff could only be against defendant Nos. 2 and 3, but not against the
Defendant No.1. Apparently, the plaintiff and the defendant No.2 are in
collusion and the plaintiff is not a bona fide purchaser.  Since plaintiff
committed default in payment of the loan, defendant No.1 proceeded against the
property by seizing.  The allegation that the defendant No.1-Corporation did not
make any visit cannot be correct, since there was no necessity, having regard to
the fact that the amounts are being paid to a tune of Rs. 29.75 lakhs  till
1987.  It was further pointed out that CBI charged the Director of defendant
No.1 for cheating the financial institution and freezed the accounts of
Defendant No.2., the very fact that defendant No.3 addressed a letter to the
Defendant No.1 on 23-11-1982 shows that the plaintiff is aware of the mortgage
by defendant No.2 in favour of defendant No.1.  In fact, the plaintiff could
have obtained 'No Objection' from both the defendants 1 and 3 prior to his
purchase.  The sale consideration was paid by defendant No.3 by cheque No.
l619359, dated 26-11-1982 drawn on the State Bank of India.  Therefore, in view
of the peculiar circumstances the liability can only be fastened against
defendant No.2 for any loss sustained by the plaintiff and not by defendant
No.1.   Further, it was pointed out that it is due to the action on the part of
the defendant No.3 in delivering the sale directly to defendant No.2, the said
defendant No.3 is answerable and liable to be paid by defendant No.1. therefore,
as against defendant No.1 no cause of action arose and the suit is liable to be
dismissed.
        Defendant No.2 remained absent and set ex-parte.
        Defendant No.3 which is the Andhra Pradesh State Infrastructure
Development Corporation Limited filed separate written statement denying the
allegation and the claim of the plaintiff and reiterated its own activities.
It was pointed out that the defendant No.3 conveyed the title under the
registered sale deed, dated 28-3-1987 in favour of defendant No.2, but the
defendant No.3 is not aware of subsequent purchase made by the plaintiff from
defendant No.2,  the plaintiff did not exercise due diligence prior to his
purchase nor make any proper enquiries.   The plaintiff is having full knowledge
of the subsisting mortgage created by defendant No.2 in favour of defendant No.1
and also defendant No.4.    It was also pointed out that the mortgage of the
property in favour of defendant No.5 by deposit of original sale deed.   The
steps have already taken in this regard for bringing to the notice about the
said mortgage to avoid multiplicity of the proceedings.  Thus the defendant No.3
is no way liable for any cause of the plaintiff.
        Defendant NO.4  filed a separate written statement which is inter alia
reiterating about its providing with the credit facility to defendant No.2 and
creating a Memorandum dated 27-8-1987.  He has filed O.S.No. 488 of 1990  on the
file of the II Senior Civil Judge, City Civil Court, Hyderabad for recovery of
Rs. 68,60,236-32  as against defendant No.2, which was subsequently transferred
to Debt Recovery Tribunal and registered as O.S.No. 475 of 1999.  Therefore, the
liability of the defendant No.4 is quite independent and defendant No.3 is
liable to be paid.
        Defendant No.5 filed its written statement reiterating about the mortgage
in its favour by obtaining loan of Rs.2 Crores and pleaded total lack of
knowledge of other transaction including the seizure of the property by the
defendant No.1.
        On the aforesaid allegations contain in the respective pleadings the Court
below framed the following issues.
i) Whether the plaintiff is entitled for a declaration that the Memorandum of
deposit of title deeds dated 24-11-1982 is void, illegal and unenforceable and
does not create any mortgage?
ii) Whether the plaintiff is entitled for a declaration in the alternative that
the defendants 2 and 3 are alone to pay the amounts due to the 1st defendant
without effecting their title, possession and enjoyment of the plaintiff over
suit property?
iii) Whether the plaintiff is entitled for permanent injunction, restraining the
1st defendant from interfering with the peaceful possession and enjoyment of
plaintiff over suit property?
iv) Whether the plaintiff is entitled for rs. 12,00,000/- together with interest
at 24% per annum from 9-8-1999.
v) To what relief?
Additional issues: -
1) Whether there is a cause o faction for the suit?
2) Whether the plaintiff is entitled to seek any relief against the 3rd
defendant?

Subsequently, the parties went into trial and the plaintiff examined PW-1, the
G.P.A. Holder of the firm and marked Exs. A-1 to A-16.  The defendants examined
DW-1 and DW-2 the officials of the defendant No.1 Corporation and marked Exs. B-
1 to B-21.
        On a consideration of the evidence and material on record, the Court below
dismissed the suit inter alia holding that the plaintiff is not entitle for
declaration as sought for, nor for permanent injunction.  Hence, this appeal.
        Learned counsel appearing for the appellant by taking us through the
entire evidence and material on record contended that, having regard to the very
nature of transaction which is incomplete and not complying to the provisions of
the Stamp Act and Indian Registration act and thus  there being no valid and
legal mortgage, the defendant No.1 cannot enforce the same.  Therefore, the
relief as sought for is perfectly sustainable, which the court below did not
properly consider from proper perspective.
        Learned counsel appearing on behalf of the respondents submitted that
dehors the absence of Stamp or Registration, there is a valid charge created
under the law which can be enforced by the defendant No.1 and therefore, the
Court below was right in rejecting the suit and thus, there are no merits in the
submissions advanced by the learned counsel for the appellant.
        On these and other submissions made across the Bar in detail from both the
counsel and on a perusal of the material, the point, which arises for
consideration is:-
"Whether under the facts and circumstances the transaction in question
constitutes a  valid and enforceable mortgage?"
        On behalf of the plaintiff, PW-1 one of the partners was examined who has
given entire narration of events and stated that the property was purchased on
13-4-1987 by the plaintiff from the defendant No.2, who in turn purchased the
same on
28-3-1987.   However, the plaintiff was not aware of any suh encumbrances or
charges whatsoever in nature, nor it was disclosed to them and not stated in the
sale deed dated 28-3-1987.  Further, there was no inspection by the Corporation
from 1987  till 1992.  It is only in the writ proceedings filed in this Court
from the counter affidavit the alleged deed of mortgage by deposit of agreement
of sale by defendant No.2  in respect of the property came to its notice.  But
the same is not a valid one since admittedly, the said mortgage transaction is
stamped or registered. There is no serious dispute on behalf of defendant No.1
with regard to the fact that there is no such mortgage stamped and registered.
However, it has been pointed out by the defendant No.1 that the said agreement
by defendant No.3 in favour of defendant No.2, dated 24-11-1992 which was marked
as Ex.B-14 was deposited by the defendant No.1 and the same was confirmed by  
him.  Defendant No.3 had issued a 'No Objection Certificate' on
26-11-1982 and the defendant No.2 acknowledged the receipt of the amounts on 2-
12-1982.  Defendant No.2 has created a charge on the property on 24-11-1982
under  Ex.B-15 with the Registrar of Company for the money advanced by defendant
No.1. Therefore, it is this act whereby the  Corporation gets its charge in due
conformity with Section 125 of the Companies Act r/w Rule 6 and Form 8 of
Appended-1.    And the charge created under section 125 of the Companies Act can
be treated as knowledge to every one and especially to a person seeking to
acquire the property who shall be deemed to have a notice as per under Section
126 of the Companies Act. Therefore, there is a due enforceable and valid charge
and accordingly, defendant No.1 Corporation is rightly proceeding with the same.
That apart, the plaintiff was aware of the said mortgage and therefore cannot
claim to be a bona fide purchaser nor entitled to any indulgence either under
law or facts, but is equally bound by it.
        Coming to the first aspect of the question on the alleged mortgage not
having been stamped or registered and thus there is no valid mortgage which can
be enforced by the Corporation, there is no dispute on the facts.  Admittedly,
there is no stamp nor registration. The question is, whether such a transaction
would amount to a valid mortgage and can be enforced.  On this issue learned
counsel on either side referred to a decision of the Apex Court in Syndicate
Bank vs. Estate Officer & Manager, APIIC Limited1  where considering the
provisions of sections 58,54,100, 5 and 6 of Transfer of Property Act, in
similar circumstances and on same questions whether a mortgagor having
incomplete or inchoate title ( having allotment letter, licence as to use of
land, and possession thereof without any sale deed having been executed or
registered) in mortgaged property, to the knowledge of mortgagee - validity and
enforceability - wherein, it was held as under;
( 28) THE requisites of an equitable mortgage are : (i) a debt; (ii) a deposit
of title deeds; and (iii) an intention that the deeds shall be security for the
debt. The existence of the first and third ingredients of the said requisites is
not in dispute. The territorial restrictions contained in the said provision
also does not stand as a bar in creating such a mortgage. The principal
question, which, therefore, requires consideration is as to whether for
satisfying the requirements of Section 58 (f) of the Transfer of Property Act,
it was necessary to deposit documents showing complete title or good title and
whether all the documents of title to the property were required to be
deposited. A' fortiori the question which would arise for consideration is as to
whether in all such cases, the property should have been acquired by reason of a
registered document.
( 29 ) EACH case will have to be considered on its own facts. A jurisprudential
title to a property may not be a title of an owner. A title which is subordinate
to an owner and which need not be created by reason of a registered deed of
conveyance may at times create title. The title which is created in a person may
be a limited one, although conferment of full title may be governed upon
fulfilment of certain conditions. Whether all such conditions have been
fulfilled or not would essentially be a question of fact in each case. In this
case a right appears to have been conferred on the allottee by issuance of a
valid letter of allotment coupled with possession as also licence to make
construction and run a factory thereon, together with a right to take advances
from banks and financial institutions; subject, of course, to its fulfilment of
condition may confer a title upon it in terms of section 58 (f) of the Transfer
of Property Act, but the question would be whether such a right is assignable.
......
.......
( 39 ) THERE cannot be any doubt whatsoever that in absence of a registered deed
of sale, the title to the land does not pass, but then what would not be
conveyed is the title of the estate and not the allotment and possession itself.
( 40 ) IT would, therefore, appear that there is no clear authority on the
question as to whether in absence of any title deed in terms whereof the
mortgagee obtained title by reason of a registered deed can be a subject-matter
of mortgage. Section 58 of the Transfer of Property Act does not speak of
mortgage of an owner's interest. If any interest in property can be created by
reason of a transaction or otherwise which does not require registration, in our
opinion, it may not be necessary to have a full title before such a mortgage is
created by deposit of title deeds. A person may acquire title to a property
irrespective of the nature thereof by several modes e. g. a lease of land which
does not require registration; (ii) by partition of a joint family property by
way of family settlement, which does not require registration.
( 41 ) IN a case of this nature where valuable right is created which may or may
not confer an assignable right, the question requires clear determination having
regard to the equitable principle in mind, and would have far reaching
consequences, as a large number of banks and financial institution advance a
huge amount only on the basis of allotment letters. If such allotment letters
are to be totally ignored, the same may deter the banks in making advances which
would in effect and substance create a state of instability.
( 42 ) APART from the said question, the effect of an admission by an authorized
representative of the State having regard to the rules of executive business or
otherwise vis-'-vis the Appellant-Bank also requires consideration.
( 43 ) WE, therefore, are of the opinion that keeping in view the importance of
the questions raised at the Bar, as noticed hereinbefore, and in the context of
the factual matrix involved in the matter, the questions require consideration
by a larger bench so that an authoritative pronouncement can be made thereupon.


        From the principles as laid down and reiterated, it was held that such
mortgages are to be treated necessarily as unenforceable and invalid, since
there is no valid mortgage.  However, having regard to the larger importance in
question effecting various financial institutions, the Apex Court has referred
the matter to the Larger Bench.  An attempt was made on behalf of the counsel
appearing for the respondents to the effect that since reference was made to the
Larger Bench this case be adjourned awaiting the said decision.  However, on the
undisputed prepositions as to the requirement of stamp and registration, this
Court is bound by the same under Act 141 of the Constitution of India.  This
will however subject to any charge in the proposition.
        Learned counsel appearing for the respondents herein submits that dehors
the said question it can sustain the charge on the other grounds and that aspect
alone would not be a criteria, which of course, is being dealt in later paras.
However, we are of the view that though subject to the view taken and the
principles that would be laid down by the Larger Bench, such transaction would
not amount to a valid mortgage and cannot be enforced.
        Coming to the other aspect of the matter, on which the learned counsel for
the respondent sought to take us on a different claim to sustain the legality of
the charge and its right to proceed against the property.   It is their case
that having regard to
Ex. B-2, dated 23-11-1982 and terms and conditions contained therein treating
the financial agency to be the first mortgagee and the defendant No.3 falling to
the 2nd charge, as per the clause contained therein putting a restraint against
the Defendant No.2 against alienation or otherwise to create any liabilities and
especially "No Objection Certificate" issued by the defendant No.3  under Ex.B-5
on     23-11-1982, the due charge was created under
Ex.B-15 with the Registrar of companies, as provided  under section 125 of the
Companies Act r/w Rule 6 Form-A pointing it.   According to the learned counsel,
notice to all concerned including any purchaser has to be deemed as contemplated
under section 126 of the Companies Act.
        Having given due consideration to the submissions made and the scope and
the object behind the said provisions, it is to be seen that the charge as
provided under section 125 of the Companies Act totally stand on a different
footing and cannot be equated with the charge or rights or obligations and
liabilities that arise from a valid mortgage,  as per the provisions of section
58 of Transfer of Property  Act vis--vis Stamp and Registration.  At the
outset, it is to be stated that the provisions of the Companies Act does not
override the provisions of the Transfer of Property Act or with Stamp Act or
Indian Registration Act on this count, nor would they exclude or make
inapplicable and dispense with these requirements.   Further, the provisions of
the Transfer of Property Act or Stamp Act or Indian Registration Act does not
make any exception to the alleged charge contemplated under Section 125 of the
Companies Act. Therefore, it follows that for any such charge, registered under
Section 125 of the Companies Act, necessarily it has to be under a valid
transaction as contemplated under law for its enforcement.  And the only law
which provides for creation of valid charge or mortgage is the Transfer of
Property vis--vis compliance of Stamp Act or Indian Registration Act.
        Thus, we are of the view, that a charge registered with the Registrar of
the Companies under section 125 of the Companies Act to be valid one and
enforceable, necessarily it should be in consonance with the Transfer of
Property Act vis--vis Indian Registration Act or Stamp Act.    Hence, we do
not find any reason to accept the submissions made on behalf of the respondents-
defendants in this regard.
        For the foregoing reasons, we hold that there being no valid and
enforceable mortgage, the plaintiff would be entitled for the declaration in
respect of the deed or transaction dated 24-11-1982 as invalid and
unenforceable.  Secondly, we hold that the registration with Registrar of
Companies Act under Section 125 of Companies Act, of the charge would constitute
a valid and enforceable mortgage.
        The appeal accordingly is allowed and  the suit is decreed both for the
declaration and injunction as prayed.  However, this will be subject to the
condition that it is open for the defendant No.1 Corporation to take other
proceedings as contemplated under law for the purpose of recovery of the amount.
No order as to costs.

?1 (2007) 8 Supreme Court Cases 361

complainant obtained a Householders insurance policy and a Vyavasayi/AdhikariSuraksha Kavach policy, based on pre-insurance inspection of the household articles like clothing, kitchenware/crockery/cutlery, furniture and fixtures, miscellaneous house-hold items, electrical/mechanical appliances, articles of personal use, jewellery and electronic goods. The sums insured for different categories of goods were different, including Rs.2,68,000/- covering all risks for jewellery and other valuables under the Householders policy and Rs.6,000/- for a mobile hand phone set under the Vyavasayi/Adhikari Suraksha Kavach policy. Ordinarily, this proposition cannot be faulted. However, on careful perusal of the assessment of the loss by the surveyor we find that he applied deduction by way of depreciation to the insured amount of Sony Handycam video camera and Kodak digital camera (total Rs.61,000/-) @ 331/3% and Rayban sunglasses @ 25% under the Householders policy and @ 50% on Rs.6,000/- for the mobile phone handset and the baggage containing clothing, etc., under the Suraksha Kavach Policy. In all, the surveyor reduced the value of the loss by Rs.30,058/- on account of depreciation at the rates mentioned above. It is noteworthy that the policies were taken in September 2004 and the loss occurred in November 2004. Moreover, a qualified surveyor had subjected each of the items covered under the two policies to detailed pre-insurance inspection. Therefore, the contention that the surveyor applied depreciation on account of failure of the insured to produce the original bills does not carry conviction. The surveyor who conducted the pre-insurance inspection would have looked all the original bills before agreeing to specific insured sums noted against each item. Therefore, to apply depreciation within a matter of just two months of the pre-insurance inspection and that too at such high rates was surely not warranted. However, in our considered opinion, the reasoning given by the surveyor in disallowing the claim for the alleged loss of Mangalsutra is sound. 7. In conclusion, in respect of the amount the order of the District Forum (as affirmed by the State Commission) cannot be sustained in its entirety. In our view, the amount payable by the insurance company towards indemnification of the loss would be Rs. 1,49,342/- as assessed by the surveyor plus Rs.30,058/- deducted by way of depreciation (vide the surveyor’s report for items no. 8 & 9 under the Householders’ policy and items no. 1 & 3 of the Suraksha Kavachpolicy) without any justification (including Rs. 1,000/- less allowed under item no. 3 (Gold Kada’s)). This total sum of Rs. 1,79,400/- should also carry interest @ 9% per annum, as awarded by the District Forum, from the date of filing of the complaint till its actual payment, because the insured/complainant has not challenged the order of the District Forum on the point of date of commencement of interest payment. However, the award of compensation of Rs.5,000/- in addition to the interest is not permissible. 8. The revision petition is, therefore, partly allowed and the orders of the Fora below are modified to the extent that the petitioner insurance company shall pay to the respondent/complainant Rs. 1,79,400/- with interest @ 9% per annum from the date of filing of the complaint till its payment. In addition, the insurance company shall pay cost of Rs.10,000/- to the respondent/complainant for all proceedings, including this. The payment may be made within six weeks. On the payment being so made by way of demand draft, the insurance company will be at liberty to get refund of the amount deposited with the District Forum with interest, if any, accrued thereon.

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

REVISION PETITION No. 3205 OF 2008

(From the order dated 24.03.2008 in First Appeal No. 68 of 2008 of the Delhi State Consumer Disputes Redressal Commission, Delhi)

New India Insurance Company

87, M. G. Road

Mumbai- 400 001

2. Regional Office at Level V, Tower II

Jeevan Bharati Building                                                        Petitioners

Connaught Circus

New Delhi – 110 001

3. And Also at 10^th Floor

Core I, SCOPE Minar

District Centre, Laxmi Nagar

New Delhi – 110 092

versus

Sachin Bhardwaj

Resident of B – 108, PMO Society

Sector – 62, NOIDA                                                             Respondent

District Gautam Buddha Nagar

Uttar Pradesh

BEFORE:

HON'BLE MR. JUSTICE K. S. CHAUDHARI              PRESIDING MEMBER

HON’BLE MR. ANUPAM DASGUPTA                         MEMBER

For the Petitioner                                              Mr. Niraj Singh, Advocate

For the Respondent                                           In person

 

Pronounced on  30^th May, 2012

ORDER

ANUPAM DASGUPTA

        This revision petition is directed against the order dated 24.03.2008 of the Delhi State Consumer Disputes Redressal Commission, Delhi (in short, ‘the State Commission’) in First Appeal no. 68 of 2008. By this order, the State Commission dismissed the appeal filed by the petitioner against the order dated 29.11.2007 of the District Consumer Disputes Redressal Forum (Central), Delhi (in short, ‘the District Forum’) in complaint case no. 543 of 2006 by which, the District Forum, in turn, had allowed the complaint of the complainant/respondent and directed the petitioner (which was the opposite party–OP before the District Forum) to pay Rs.2,48,500/- towards the insurance claim of the respondent/complainant along with interest @ 9% per annum from29.03.2006 (date of filing of the complaint), compensation of Rs.5,000/- and cost of Rs.2,000/- within sixty days from the date of the order. Thus, the petitioner is before us against the concurrent orders of the two Fora below.

2(i)   The undisputed facts are that in September 2004, the respondent/complainant obtained a Householders insurance policy and a Vyavasayi/AdhikariSuraksha Kavach policy, based on pre-insurance inspection of the household articles like clothing, kitchenware/crockery/cutlery, furniture and fixtures, miscellaneous house-hold items, electrical/mechanical appliances, articles of personal use, jewellery and electronic goods. The sums insured for different categories of goods were different, including Rs.2,68,000/- covering all risks for jewellery and other valuables under the Householders policy and Rs.6,000/- for a mobile hand phone set under the Vyavasayi/Adhikari Suraksha Kavach policy.

(ii)    The respondent, with his wife and child, went from NOIDA to Aligarh to attend a family wedding. On their return journey on 13^th November 2004, the complainant’s car got overheated and had to be stopped midway. As they were carrying valuables including jewellery, video camera, digital camera, etc., the complainant packed these in a suitcase in the car and leaving the car locked where it had stopped, he took his wife and child by bus (which was passing by) to a regular bus stop from where his wife and child were in a position to take a bus and reach home.

(iii)    After dropping them at the bus stop the complainant returned to the spot where he had left his car and found that he could now start the car as the engine had cooled down. After driving for a kilometer or so, his car was suddenly hit from behind by an Ambassador car. The complainant stopped the car and came out to inspect the damage and talk to the driver of the Ambassador car. In a matter of seconds, however, some people alighted from the Ambassador car, got into the complainant’s car and drove it away. The ambassador car also was driven off.

(iv)   The complainant went to the Police Station by taking a ride in someone else’s car and registered his complaint. He also lodged an insurance claim with the petitioner company.

(v)    The petitioner appointed a surveyor who conducted a detailed survey and assessed the loss at Rs.1,49,342/- under the two insurance policies (Rs.1,36,342/- for loss of jewellery, camera and sunglasses under the Householders insurance policy and Rs.13,000/- for mobile handset, cash loss and baggage/clothing loss under the Suraksha Kavach policy), after applying depreciation at rates varying from 50% to 25%. However, observing that the complainant/insured did not take adequate care in safeguarding the insured property, the surveyor recommended that the claim was not payable. The insurance company wrote a detailed letter dated 03.08.2005 seeking clarification from the insured complainant. After further consideration, the petitioner repudiated the claim by its letter dated 09.03.2006 on the following grounds:

“The company on receipt of intimation has got the investigation carried out. The documents as available and report submitted by the surveyor confirmed that there was negligence on your part while leaving the suitcase containing jewellery and other items in the car. As per the condition no. 3 of the policy it is expressly agreed that the insured shall take all reasonable steps to safe guard the property against any loss or damage. The sequence of events confirms that you have not exercised reasonable care while leaving the valuables in the car at the time of boarding the bus. Moreover, you have failed to spell out the reasons for not carrying the bag while leaving the car”.

3.     Aggrieved by the repudiation, the insured filed a consumer complaint before the District Forum, which allowed the complaint as summarised above and the petitioner’s appeal against the said order was also dismissed by the State Commission.

4.     We have heard Mr. Niraj Singh, learned counsel for the petitioner and the respondent in person and considered the documents placed before us.

5(i)   As regards the ground for repudiation of the insurance claim that the insured/complainant/respondent was negligent in leaving the suitcase containingjewellery, valuables and other items in the car where it had stopped while he went to drop his wife and child by bus to the nearest bus stop (from where they could go home), we are in agreement with the findings of the Fora below that, in the facts and circumstances of the case, the steps the insurer took were reasonable enough to protect the insured property. Further, as emphasised by the respondent/complainant during the hearing, the loss of the suitcase containing the insured articles like jewellery, etc., did not take place while he was away to drop his wife and child at the nearest bus stop and his car was unattended (but duly locked). The theft took place after his car was banged by an Ambassador car from behind and then driven off by the miscreants who later abandoned the car somewhere close by but decamped with the suitcase containing the insured valuables. In other words, the claim of the insured for indemnification of the loss ought not to have been repudiated by the insurance company on the ground of lack of adequate steps on the part of the insurer to safeguard the property.

(ii)    As regards the second contention that the insured should not have alighted from his car (when it was hit by the Ambassador car from behind) with the ignition key in the socket, the stand of the insurance company is hardly acceptable. It is totally impractical to contend that the insured should have, after alighting from the car to see the extent of the damage and have a word with the driver of the offending vehicle, first securely locked the windows and doors of the car. The complainant/respondent has rightly pointed out that the theft of the suitcase, valuables, etc., took place only after the car was driven off by several miscreants over which he could possibly not have any control.

6.     Learned counsel for the petitioner has also emphasised that even if the claim were to be admitted for payment, the amount could not exceed the loss assessed by the surveyor in his report. Ordinarily, this proposition cannot be faulted. However, on careful perusal of the assessment of the loss by the surveyor we find that he applied deduction by way of depreciation to the insured amount of Sony Handycam video camera and Kodak digital camera (total Rs.61,000/-) @ 33¹/₃% and Rayban sunglasses @ 25% under the Householders policy and @ 50% on Rs.6,000/- for the mobile phone handset and the baggage containing clothing, etc., under the Suraksha Kavach Policy. In all, the surveyor reduced the value of the loss by Rs.30,058/- on account of depreciation at the rates mentioned above. It is noteworthy that the policies were taken in September 2004 and the loss occurred in November 2004. Moreover, a qualified surveyor had subjected each of the items covered under the two policies to detailed pre-insurance inspection. Therefore, the contention that the surveyor applied depreciation on account of failure of the insured to produce the original bills does not carry conviction. The surveyor who conducted the pre-insurance inspection would have looked all the original bills before agreeing to specific insured sums noted against each item. Therefore, to apply depreciation within a matter of just two months of the pre-insurance inspection and that too at such high rates was surely not warranted. However, in our considered opinion, the reasoning given by the surveyor in disallowing the claim for the alleged loss of Mangalsutra is sound.

7.     In conclusion, in respect of the amount the order of the District Forum (as affirmed by the State Commission) cannot be sustained in its entirety. In our view, the amount payable by the insurance company towards indemnification of the loss would be Rs. 1,49,342/- as assessed by the surveyor plus Rs.30,058/- deducted by way of depreciation (vide the surveyor’s report for items no. 8 & 9 under the Householders’ policy and items no. 1 & 3 of the Suraksha Kavachpolicy) without any justification (including Rs. 1,000/- less allowed under item no. 3 (Gold Kada’s)). This total sum of Rs. 1,79,400/- should also carry interest @ 9% per annum, as awarded by the District Forum, from the date of filing of the complaint till its actual payment, because the insured/complainant has not challenged the order of the District Forum on the point of date of commencement of interest payment. However, the award of compensation of Rs.5,000/- in addition to the interest is not permissible.

8.     The revision petition is, therefore, partly allowed and the orders of the Fora below are modified to the extent that the petitioner insurance company shall pay to the respondent/complainant Rs. 1,79,400/- with interest @ 9% per annum from the date of filing of the complaint till its payment. In addition, the insurance company shall pay cost of Rs.10,000/- to the respondent/complainant for all proceedings, including this. The payment may be made within six weeks. On the payment being so made by way of demand draft, the insurance company will be at liberty to get refund of the amount deposited with the District Forum with interest, if any, accrued thereon.

Sd/-

…………………………………

[K. S. Chaudhari]

Sd/-

…………………………………….

[Anupam Dasgupta]

satish

From a conspectus of the facts and circumstances of the case and material obtaining on record, there cannot be denial of the factual position that faced with the recovery proceedings initiated by the Bank, the complainant had filed consumer complaint alleging deficiency in service on the part of the Opposite Party Bank. The District Forum unmindful of the provisions of section 34 of the said Act had passed an adinterim order directing the opposite party bank not to take any steps for recovery of the loan dues from the complainant by taking coercive measures. In our view, to say the least, such an order was clearly without jurisdiction and amounted to the usurping of the jurisdiction which was legally vested in another statutory tribunal under a particular statute. The State Commission has done well in setting aside the said order and dismissing the complaint because once it is found that the complainant had already approached the Appropriate Tribunal which was ceased of the entire gamut of controversy. The complainant could not agitate the said question before a consumer fora established under the Consumer Protection Act, 1986. Various tribunals constituted under the statute are expected to exercise their jurisdiction in accordance with the provisions of the Act under which they have been constituted. There is a clear cut demarcation of the jurisdiction and powers amongst various tribunals and no attempt should be made by one Tribunal to usurp the powers and jurisdiction of other either directly or indirectly. Such a situation may lead to anomalous situation because the orders passed by the two or more tribunals on the same controversy may vary. The question would then arise as to which of the order is binding and valid on the parties. Such a situation has to be avoided in all circumstances. In the case in hand, what we have found is that the District Forum has exercised a jurisdiction which was not vested in it. Rather such a jurisdiction was specifically taken away from any other Court / Tribunal / Forum under section 34 of the Act, 2002. 5. On a consideration of the matter, we are of the clear opinion that the impugned order passed by the State Commission is eminently justified and is in consonance with the settled legal position and suffers from no illegality, material irregularity much less any jurisdictional error which warrants interference of this Commission. Revision petition is accordingly dismissed on both the counts.

NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION

NEW DELHI

REVISION PETITION NO. 995 OF 2012

(From the order dated 27.04.2011 in Appeal No. 91/2010

of Orissa State Consumer Disputes Redressal Commission)

 

Harianandan Prasad

S/o Late Sradhanandan Prasad

Through Special Power of Attorney Holder

Baladev Bhawan, Station Road

P.O. / Distt. Puri, Proprietor of

M/s. Oceanic Colour Lab.

At – Ratnakar Road,

P.O. / Town / Distt. / Puri                                  ...     Petitioner

Versus

State Bank of India

Station Bazar Branch

At – Station Road,

Town / PO / Distt. – Puri

Represented by its Branch Manager                …     Respondent

BEFORE

HON’BLE MR. JUSTICE R.C. JAIN,

PRESIDING MEMBER

HON’BLE MR. S.K. NAIK, MEMBER

For the Petitioner(s)

Mr. S. Mishra, Advocate

PRONOUNCED ON : 31^st MAY 2012

O R D E R

PER JUSTICE R.C. JAIN, PRESIDING MEMBER

          Challenge in these proceedings is to the order dated 27.04.2011 passed by the Orissa State Consumer Disputes Redressal Commission (for short ‘the State Commission’) in Revision Petition No. 91 / 2010.  The revision petition before the State Commission was filed by the opposite party State Bank of India against an interim order dated 10.11.2010 passed by the District Consumer Disputes Redressal Forum, Puri in CD No. 193 / 2010.  By the said order, the District Forum had directed the opposite party Bank not to take any step for recovery of loans / dues from the complainant by taking coercive measures till the complaint was heard and disposed of on merits. 

2.      It would appear from the record that the respondent / complainant had filed a complaint alleging deficiency in service on the part of the Opposite Party Bank in regard to certain loan which the complainant had taken from the bank.  The Bank initiated proceedings for the recovery of the loan by taking recourse to the provisions of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 by filing application under section 13(2) of the Act.  It clearly showed that the complaint was filed after the bank had initiated the recovery proceedings.  Apprehending adverse order, the complainant approached the consumer forum with the complaint and an application for ad-interim stay order on the ground that no notice of the original petition filed by the bank was received by the complainant.  The Bank challenged the jurisdiction of the Consumer Forum in the revision petition filed before the State Commission.  The Bank pleaded that in view of section 34 of the Securitisation and Reconstruction Act, 2002, no other court or tribunal except the Debt Recovery Tribunal or an appellate tribunal was empowered to grant any injunction in respect of any action taken or to be taken by the said Tribunal or Appellate Tribunal in pursuance of any power conferred by or under the said Act or under the Recovery of Debts Due to Bank and Financial Institution Act, 1993.  This contention was upheld by the State Commission by holding as under:-

“In view of the fact that proceeding has already been initiated under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 and notice has duly been served on the debtor-complainant, the learned District Forum has gone wrong in entertaining the prayer and injuncting the Bank from taking any coercive step for recovery of the loan.  Such an order was without jurisdiction and is not at all tenable. As such, we allow the revision and set aside the impugned order dated 10.11.2010 passed by the District Forum in CC No. 193 of 2010.

    Since on going through the copy of the complaint petition we find that the complaint is filed with allegation of settlement of dues of the opposite party-Bank and the Band has already initiated recovery proceeding and when admittedly the complainant has gone to the Debt Recovery Tribunal, as submitted by Mr. Mishra,  which is the appropriate forum to take care of the same, we think it just and proper to direct dismissal of Consumer Complaint No. 193 of 2010 pending before the District Consumer Disputes Redressal Forum, Puri, which we hereby do.”

3.      It may be noted at the outset that the present petition has been filed after a delay of 211 days along with an application for condonation of delay.  The reason for this undue delay in filing the present petition is sought to be explained on the premises that the impugned order dated 27.04.2011 passed by the State Commission was challenged by the petitioner before the Hon’ble High Court of Orissa in Civil Writ Petition No. 18677 / 2011 under bonafide legal advice.  The said writ petition was disposed of vide order dated 3.11.2011 thereby granting liberty to the petitioner to file the present petition before this Commission.  Assuming that the complainant under some bonafide mistake for filing those proceedings in the High Court of Orissa, which was in fact not maintainable as an alternative efficacious remedy was available to the petitioner to challenge the said order of the State Commission before this Commission, still there is undue delay in filing the present petition which was filed only on 6.05.2012.  In our opinion, the complainant has failed to explain the subsequent delay in filing the present Petition.  The petition is, therefore, liable to be dismissed on this count alone.

4.      Even then we have heard learned counsel for the petitioner on merits and have considered his submissions.  From a conspectus of the facts and circumstances of the case and material obtaining on record, there cannot be denial of the factual position that faced with the recovery proceedings initiated by the Bank, the complainant had filed consumer complaint alleging deficiency in service on the part of the Opposite Party Bank.  The District Forum unmindful of the provisions of section 34 of the said Act had passed an adinterim order directing the opposite party bank not to take any steps for recovery of the loan dues from the complainant by taking coercive measures.  In our view, to say the least, such an order was clearly without jurisdiction and amounted to the usurping of the jurisdiction which was legally vested in another statutory tribunal under a particular statute.  The State Commission has done well in setting aside the said order and dismissing the complaint because once it is found that the complainant had already approached the Appropriate Tribunal which was ceased of the entire gamut of controversy.  The complainant could not agitate the said question before a consumer fora established under the Consumer Protection Act, 1986.  Various tribunals constituted under the statute are expected to exercise their jurisdiction in accordance with the provisions of the Act under which they have been constituted.  There is a clear cut demarcation of the jurisdiction and powers amongst various tribunals and no attempt should be made by one Tribunal to usurp the powers and jurisdiction of other either directly or indirectly.  Such a situation may lead to anomalous situation because the orders passed by the two or more tribunals on the same controversy may vary.  The question would then arise as to which of the order is binding and valid on the parties.  Such a situation has to be avoided in all circumstances.  In the case in hand, what we have found is that the District Forum has exercised a jurisdiction which was not vested in it.  Rather such a jurisdiction was specifically taken away from any other Court / Tribunal / Forum under section 34 of the Act, 2002.

5.      On a consideration of the matter, we are of the clear opinion that the impugned order passed by the State Commission is eminently justified and is in consonance with the settled legal position and suffers from no illegality, material irregularity much less any jurisdictional error which warrants interference of this Commission.  Revision petition is accordingly dismissed on both the counts.

..……………………………

(R. C. JAIN J.)

PRESIDING MEMBER

..……………………………

(S.K. NAIK)

MEMBER

RS/