{"id":41239,"date":"1998-05-13T00:00:00","date_gmt":"1998-05-12T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/harshad-shantilal-mehta-vs-custodian-ors-on-13-may-1998"},"modified":"2019-02-02T17:12:51","modified_gmt":"2019-02-02T11:42:51","slug":"harshad-shantilal-mehta-vs-custodian-ors-on-13-may-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/harshad-shantilal-mehta-vs-custodian-ors-on-13-may-1998","title":{"rendered":"Harshad Shantilal Mehta vs Custodian & Ors on 13 May, 1998"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Harshad Shantilal Mehta vs Custodian & Ors on 13 May, 1998<\/div>\n
Author: M S V.Manohar<\/div>\n
Bench: Sujata V. Manohar, S.P. Kurdukar, D.P. Wadhwa<\/div>\n
           PETITIONER:\nHARSHAD SHANTILAL MEHTA\n\n\tVs.\n\nRESPONDENT:\nCUSTODIAN & ORS.\n\nDATE OF JUDGMENT:\t13\/05\/1998\n\nBENCH:\nSUJATA V. MANOHAR, S.P. KURDUKAR, D.P. WADHWA\n\n\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
[With C.A.  Nos. 5147\/1995, 5225\/1995, 5325\/1995, 6080\/1995,
\n12574\/1996, T.C. (Civil) No.5\/1998]
\n\t\t      J U D G M E N T
\nMrs. Sujata V.Manohar, J.\n<\/p>\n
     The  Special   Court  (Trial   of\tOffenders   Relating
\nTransactions in\t Securities) Act, 1992 is a special Act with
\nits own special problems. The offences it deals with involve
\namounts of  unusual magnitude procured by brokers from banks
\nand financial  institutions. Unfortunately,  the proceedings
\nbefore the  Special Court,  which was  set up  for  a  quick
\nprosecution or\tadjudication of\t claims have been trapped in
\nunusual legal and interpretational difficulties generated by
\nthe casual  drafting of\t the Act  that leaves  much  to\t the
\nskills and  good sense\tof the\tcourts. The  present appeals
\nbefore us  relate to the interpretation of Section 11 of the
\nAct.\n<\/p>\n
     Civil Appeal No. 5225 of 1995 is filed by the Custodian
\nappointed under\t the provisions\t of the Special Court (Trial
\nof Offences  Relating to  Transactions in  Securities)\tAct,
\n1992 against a judgment and order of the Special Court Judge
\ndated 23.2.1995.  The  appeal  is  filed  by  the  Custodian
\npursuant to  directions contained  in the  impugned judgment
\nitself.\t The  other  appeals  have  been  filed\t by  various
\nnotified persons  under the Special Court (Trial of Offences
\nRelating  to   Transactions   in   Securities)\t Act,\t1992
\n(hereinafter referred  to as  the ‘Special  Court Act’) from
\nthe same  judgment and\torder of  the Special Court Judge. A
\nwrit petition  challenging the\tconstitutional\tvalidity  of
\nSection 11  of the  Special Court  Act pending\tin the Delhi
\nHigh Court  has also  been transferred\tto  this  Court\t for
\nconsideration along  with these appeals, as common questions
\nof law\tarise. All  these appeals along with the transferred
\ncase have  been heard  together. We  have also heard various
\nintervenors in these appeals.\n<\/p>\n
     The  Special  Court  has  observed\t that  it  has\tbeen
\nfunctioning since  June 1992.  In respect  of  two  notified
\nparties, namely,  the Harshad  Mehta  Group  and  Fairgrowth
\nFinancial  Services   Ltd.,  the  time\tis  approaching\t for
\ndistribution of their assets under Section 11 of the Special
\nCourt  Act,   1992.  In\t  view\tof  the\t different  possible
\ninterpretations of the provisions of Section 11, the Special
\nCourt has raised certain questions of law. After hearing all
\nconcerned parties,  the Special\t Court\thas  answered  these
\nquestions in  the impugned judgment, somewhat in the fashion
\nof an  Originating Summons. The Custodian has raised certain
\nadditional  questions\twhich  arise   in  interpreting\t and
\nimplementing Section  11  of  the  Special  Court  Act.\t The
\nquestions raised by the Special Court are as follows:\n<\/p>\n
     “1. Whether the priority created by
\n     section 11\t of  the  Special  Court
\n     (Trial  of\t  Offences  Relating  to
\n     Transactions  in  Securities)  Act,
\n     1992 is  only in respect of amounts
\n     due   prior    to\t the   date   of
\n     Notification  and\/or   whether  the
\n     priority  would   also   apply   to
\n     amounts due  after the  date of the
\n     Notification.\n<\/p><\/blockquote>\n
     2.\t  Whether the  phrase ‘taxes’ as
\n     used in  Section 11  of the Special
\n     Court (Trial  of Offences\tRelating
\n     to Transactions in Securities) Act,
\n     1992 can  only mean  amounts due as
\n     and by  way of  taxes or whether it
\n     would also\t include  penalties  and
\n     interest, if any.\n<\/p><\/blockquote>\n
     3.\t Whether penalty and\/or interest
\n     can be  levied  on\t or  charged  to
\n     Notified Parties  after the date of
\n     Notification.”<\/p><\/blockquote>\n
     To appreciate  the points\tat issue, it is necessary to
\nlook briefly at the provisions of the Special Court Act. The
\nStatement of Objects and Reasons relating to the Act states,
\n“In the\t course of the investigations by the Reserve Bank of
\nIndia, large  scale  irregularities  and  malpractices\twere
\nnoticed in  transactions in  both the  Government and  other
\nsecurities, indulged  in by  some brokers  in collusion with
\nthe employees  of various  banks and financial institutions.
\nThe  said   irregularities  and\t  malpractices\tled  to\t the
\ndiversion of  funds from banks and financial institutions to
\nthe individual accounts of certain brokers, (2) To deal with
\nthe situation and in particular to ensure speedy recovery of
\nthe huge  amount involved,  to punish the guilty and restore
\nconfidence  in\t and  maintain\t the  basic   integrity\t and
\ncredibility of\tthe banks  and financial  institutions,\t the
\nSpecial (Trial\tof  Offences  Relating\tto  Transactions  in
\nSecurities) Ordinance,\t1992, was  promulgated on  6th June,
\n1992. The  Ordinance provides  for the\testablishment  of  a
\nSpecial Court  with a  sitting Judge  of a   High  Court for
\nspeedy\ttrial\tof  offences  relating\tto  transactions  in
\nsecurities and\tdisposal of  properties\t attached.  It\talso
\nprovides for  appointment of  one  or  more  custodians\t for
\nattaching the  property of  the offenders  with\t a  view  to
\nprevent diversion  of such properties by the offenders.” The
\nOrdinance was replaced by the Act.\n<\/p>\n
Under Section 3 of the Special Court Act sub-sections (1),
\n(2), (3) and (4) are as follows :\n<\/p>\n
     “3.   Appointment and  functions of
\n     Custodian\t—   (1)   The\t Central
\n     Government may  appoint one or more
\n     Custodian as  it may  deem fir  for
\n     the purposes of this Act.
\n     (2)   The Custodian  may, on  being
\n     satisfied on  information\treceived
\n     that any  person has  been involved
\n     in any securities after the 1st day
\n     of April,\t1991 and  one and before
\n     6th June  1992, notify  the name of
\n     such   person   in\t  the\tOfficial
\n     Gazette.\n<\/p><\/blockquote>\n
     (3)      Notwithstanding\tanything
\n     contained in the Code and any other
\n     law for the time being in force, on
\n     and from  the date\t of notification
\n     under    sub-section    (2),    any
\n     property, movable\tor immovable, or
\n     both,  belonging\tto  any\t  person
\n     notified  under   that  sub-section
\n     shall stand attached simultaneously
\n     with the issue of the notification.
\n     (4)   The property\t attached  under
\n     sub-section (3) shall be dealt with
\n     by the  Custodian in such manner as
\n     the Special Court may direct.
\n     (5)…………………………..
\n     ……………………”\n<\/p><\/blockquote>\n
The Custodian  has, therefore, the power to notify the names
\nof persons  involved in any offence relating to transactions
\nin securities  after the  1st day  of April,  1991 and on or
\nbefore\t6th   of  June,\t  1992.\t On  such  notification\t all
\nproperties of  the notified  person  stand  attached.  Under
\nSection 4,  the Custodian  is given  the  power,  if  he  is
\nsatisfied that any contract or agreement entered into at any
\ntime after  1st of April, 1991 and on or before 6th of June,
\n1992 in\t relation to any property of the person notified has
\nbeen entered  into fraudulently\t or to defeat the provisions
\nof this\t Act, to  cancel such contract or agreement. On such
\ncancellation the property shall stand attached. Both Section
\n2  and\t4,  therefore,\tdeal  with  the\t Custodian’s  powers
\nrelating to transactions in securities entered into during a
\nvery specific  period, namely,\t1st of April, 1991 and on or
\nbefore 6th  of June,  1992   (hereinafter referred to as the
\nstatutory period).\n<\/p>\n
     Under Section  7 and  8 the jurisdiction of the Special
\nCourt in  respect of  prosecution of offences is confined to
\noffences  referred  to\tin  Section  3(2)  i.e.\t during\t the
\nstatutory period.  Section 9-A\twhich has been introduced by
\nthe Amending  Act  24  or  1994,  deals\t with  jurisdiction,
\npowers, authority  and procedure  of the  Special  Court  in
\ncivil matters.\tUnder sub-section  (1)\tit  is\tprovided  as
\nfollows :-\n<\/p>\n
     “(1)   On and from the commencement
\n     of\t the  Special  Court  (Trial  of
\n     Offences Relating\tto  Transactions
\n     in Securities) Amendment Act, 1994,
\n     the Special  Court\t shall\texercise
\n     all such  jurisdiction  powers  and
\n     authority\tas   were   exercisable,
\n     immediately       before\t    such
\n     commencement, by any civil court in
\n     relation to any matter of claim –\n<\/p><\/blockquote>\n
\t  (a)\trelating to any property
\n     attached under  sub-section (3)  or
\n     Sec. 3;\n<\/p><\/blockquote>\n
\t  (b)\t    arising    out    of
\n     transactions in  securities entered
\n     into after\t the 1st  day  of  April
\n     1991, and\ton or before the 6th day
\n     of June,  1992 in\twhich  a  person
\n     notified under  sub-section (2)  of
\n     Sec.3  is\t involved  as  a  party,
\n     broker, intermediary  or  in  other
\n     manner.\n<\/p><\/blockquote>\n
     (2)……………….
\n     (3)……………….
\n     (4)……………….
\n     (5)……………….<\/p><\/blockquote>\n
     Jurisdiction of  the Special Court in civil matters is,
\ntherefore, in respect of any matter or claim relating to any
\nproperty which is attached under Section 3(2), or any matter
\nor claim  arising out  of transactions in securities entered
\ninto during the “statutory period”.\n<\/p>\n
     Under Section 9-B the jurisdiction of the Special Court
\nin arbitration\tmatters is  also  with\treference  to  those
\nmatters or claims which are covered by Section 9-A (1).\n<\/p>\n
     Therefore, the  jurisdiction of  the Special  Court  in
\ncivil  as   well  as  criminal\tmatters\t is  in\t respect  of
\ntransactions during  t he  statutory period of 1st of April,
\n1991 to 6th of June, 1993; and in relation to the properties
\nattached, of  a notified person. The entire operation of the
\nsaid Act,  therefore, revolves\taround the  transactions  in
\nsecurities during this statutory period.\n<\/p>\n
     Section 11\t deals with  discharge\tof  liabilities\t and
\ndistribution  of  the  property\t attached.  It\tprovides  as
\nfollows :-\n<\/p>\n
     “11.   Discharge of  liabilities  –\n<\/p><\/blockquote>\n
     (1)    Notwithstanding\tanything
\n     contained in the Code and any other
\n     law for  the time\tbeing in  force,
\n     the Special  Court\t may  make  such
\n     order as  it may deem fit directing
\n     the Custodian  for the  disposal of
\n     the property under attachment.
\n     (2)     The  following  liabilities
\n     shall  be\tpaid  or  discharged  in
\n     full, as  far as  may  be,\t in  the
\n     order as under :-\n<\/p><\/blockquote>\n
     (a)   all revenues,  taxes,  cesses
\n     and  rates\t due  from  the\t persons
\n     notified  by  the\tCustodian  under
\n     sub-section (2)  of  Sec.3\t to  the
\n     Central  Government  or  any  State
\n     Government or any local authority\n<\/p><\/blockquote>\n
     (b)    all\t amounts  due  from  the
\n     person so notified by the Custodian
\n     to\t  any\t bank\t of    financial
\n     institution or mutual fund; and\n<\/p><\/blockquote>\n
     (c)   any other liability as may be
\n     specified by the Special Court from
\n     time to time.”<\/p><\/blockquote>\n
     This  Section  obviously  deals  with  disbursement  of
\nproperties attached  under Section  3(3). Since the property
\n(movable or  immovable or  both) which is attached is of the
\nperson notified,  the liabilities  which are  to be  paid or
\ndischarged under  Section 11(2)\t are also liabilities of the
\nperson notified – whether these liabilities be in respect of
\npayment of revenues, taxes, cesses or rates, or whether they
\nbe the\tliabilities to\tany bank,  financial institution  of
\nmutual fund.\n<\/p>\n
     Before the\t Special Court makes any order under Section
\n11(1) the  Special Court must be satisfied that the property
\nwhich is  attached and is being disposed of, is the property
\nbelonging to  the notified persons. If any person other than
\nthe notified  person has  any share,  or any right, title or
\ninterest  in   the  attached   property\t on   the  date\t  of
\nnotification under  Section 3,\tthat right  of a third party
\ncannot be extinguished. There is no provision in the Special
\nCourt Act  which extinguishes  the right, title and interest
\nof a  third party  in any  property which  is attached\tas a
\nconsequence of\ta notification\tunder Section  3.  The\tonly
\nright which  the Custodian  has, in respect of the rights of
\nthird parties  in such properties, is conferred by Section 4
\nunder which, if the Custodian is satisfied that any contract
\nor agreement  which was\t entered into  by the notified party
\nwithin the   “statutory\t period” in  relation to an attached
\nproperty, is  fraudulent or  entered into for the purpose of
\ndefeating the  provisions of  the Special  Court Act, he can
\ncancel\tsuch  contract\tor  agreement,\tThere  is  no  other
\nprovision under\t the Special  Court Act\t which\taffects\t the
\nexisting rights\t of a third party on the date of attachment,
\nin the\tproperty attached.  The attached  property also does
\nnot vest in the Custodian. In this regard, the position of a
\nCustodian is  different from  that of an official liquidator
\nof a  company in  winding up.  Had the\tAct provided for the
\nextinguishment of  any subsisting rights of other persons in
\nthe  attached\tproperty,  the\tAct  could  well  have\tbeen
\nconsidered  as\tarbitrary  or  unconstitutional\t (Vide\tC.B.
\nGautam v.  Union of  India and Ors.<\/a> (1993 (1) SCC 78 at page
\n105 to\t110). dealings ins securities belonging to banks and
\nfinancial institutions\tduring the  relevant  period  and\/or
\nthat there  are no  claims or  liabilities which  have to be
\nsatisfied by  attachment and  sale or  such property, in our
\nview, the  Special court  would have the power to direct the
\nCustodian to release such property from attachment”. Hence a
\nproperty not  having any  nexus with the illegal dealings in
\nsecurities can\tbe released  from attachment  by the Special
\nCourt in an appropriate case.\n<\/p>\n
     The question of distribution of attached property under
\nSection 11(2)  has to be considered thereafter. Before going
\ninto the  questions raised  in\tthat  connection,  one\tmust
\nexamine whether\t Section 11(2)\tlays  down  any\t priorities.
\nAlthough  it   was  contended  before  us  by  some  of\t the
\nappellants  that   Section  11(2)  does\t not  lay  down\t any
\npriorities, the\t language of  Section 11(2)  is quite clear.
\nThe words, “in order as under” in Section 11(2) lay down the
\nproperties for\tdistribution. In  fact, it  has been so held
\nby this\t Court while  interpreting Section 11 in the case of
\nB.O.I. Finance\tLtd. v.\t Custodian & Ors.<\/a> (1997 (10) SCC 488
\nat page\t 497). Referring  to Section  11(2) of the Act, this
\nCourt has  said that  sub-section (2) of Section 11 provides
\nfor the\t priorities in which the liabilities of the notified
\nperson are  to\tbe  discharged\tfrom  out  of  the  attached
\nproperties. Considering that the Act has been passed because
\nof the\tdiversion of  funds from  the  banks  and  financial
\ninstitutions to\t the individual accounts or certain brokers,
\nthe implication of Section 11 (2) (b) clearly is, that after
\nthe discharge of the liabilities under Section 11(2)(a), the
\namounts which  are paid to the banks would probably be those
\nfunds which  were diverted  from  the  banks  by  reason  of
\nmalpractice in\tthe security  transactions. However,  before
\nthe amounts  can be  paid to banks or financial institutions
\nunder  Section\t 11(2)(b)  the\t liabilities  under  Section
\n11(2)(a) are required to be discharged.\n<\/p>\n
     The Special Court has raised three questions pertaining
\nto distribution under Section 11(2). We would, however, like
\nto expand  the three  questions in  order to  bring out\t the
\npoints at  issue which\thave  been  argued  before  us.\t The
\nquestions can be reframed as follows :\n<\/p>\n
(1)  What is meant by revenues, taxes, cesses and rates due?\n<\/p>\n
     Does the  word “due”  refer merely\t to the liability to
\n     pay such  taxes etc.,  or does  it refer to a liability
\n     which has\tcrystalised into  a legally  ascertained sum
\n     immediately payable?\n<\/p><\/blockquote>\n
(2)  Do the taxes (in clause (a) of Section 11(2) refer only
\n     to taxes  relating to a specific period or to all taxes
\n     due from the notified person?\n<\/p>\n
(3)  At what point or time should the taxes have become due?
\n(4)  Does the  Special Court have any discretion relating to
\n     the  extent  of  payments\tto  be\tmade  under  Section
\n     11(2)(a) from out of the attached funds\/property?
\n(5)  Whether taxes include penalty or interest?
\n(6)  Whether the  Special Court\t has the  power to absolve a
\n     notified person from payment of penalty or interest for
\n     a period  subsequent to  the date\tof his\tnotification
\n     under Section  3. In  the alternative,  is\t a  notified
\n     person liable to payment of penalty or interest arising
\n     from his inability to pay taxes after his notification?
\n     The Custodian  has raised certain further questions. We
\npropose to consider one such question which has a bearing on
\nthe questions  which have  been framed by the Special Court.
\nThe question  is whether  in the  case of  mortgaged\/pledged
\nproperties    of     the    notified\t persons     already
\nmortagaged\/pledged to the banks or financial institutions on
\nthe date  of attachment,  the words  of Section\t  3 (3) “any
\nproperty movable  or immovable\tor  both  belonging  to\t any
\nperson notified”  would refer  only to\tthe right,  title or
\ninterest of  the notified  person in  the  mortgaged\/pledged
\nproperty and  not the  entire property\titself. It  so,\t the
\nliabilities mentioned  in Section 11(2) which are to be paid
\nfrom the  proceeds of  the sale\t of the\t attached  property,
\nwould only refer to proceeds of the sale of the right, title
\nand  interest\tof  the\t notified  person  in  the  attached
\nproperty.\n<\/p>\n
     The last  question can  be answered  first.  As  stated
\nabove, Section\t3(3) clearly  provides that  the  properties
\nattached are properties which belong to the person notified.
\nThe words  “belong to”\thave a\treverence only to the right,
\ntitle and  interest of the notified person in that property.
\nIt in the property “belonging to” a notified person, another
\nperson has  a share  or interest,  that share or interest is
\nnot extinguished. Of course, if the interest of the notified
\nperson in  the property\t is not\t a severable  interest,\t the
\nentire property may be attached. But the proceeds from which
\ndistribution will  be made  under Section  11(2) can only be
\nthe proceeds in relation to the right, title and interest of
\nthe notified  person in\t that property.\t The interest  of  a
\nthird party  in the  attached property\tcannot\tbe  sold  or
\ndistributed to\tdischarge the  liabilities of  the  notified
\nperson. This would also be the position when the property is
\nalready mortgaged  or pledged on the date of attachment to a
\nbank or to any third party. This, however, is subject to the
\nright of  the Custodian\t under Section\t4 to  set aside\t the
\ntransaction of\tmortgage or  pledge.  Unless  the  Custodian
\nexercises his power under Section 4, the right acquired by a
\nthird party  in the  attached property\tprior to  attachment
\ndoes not  get extinguished nor does the property vest in the
\nCustodian whether  free from  encumbrances or otherwise. The
\nownership of the property remains as it was.\n<\/p>\n
Question No. 1<\/span><\/p>\n
     The first\tquestion on  which the\targuments have\tbeen
\nadvanced, relates  to the  meaning of  the phrase  “tax due”
\nused in Section 11(2)(a). Block’s Law Dictionary at page 499
\ndefines the  word `due’,  inter alia,  as, “owing;  payable;
\njustly owed……………  Owed or  owing as  distinguished
\nfrom payable.  A debt  is often said to be due from a person
\nwhere he  is the  party owing it, or primarily bound to pay,
\nwhether\t  the\t time\tfor   payment\thas   or   has\t not
\narrived………..The word  `due’ always imports a fixed and
\nsettled obligation  or liability,  but with reference to the
\ntime for  its payment there is considerable ambiguity in the
\nuse of\tthe term, the precise signification being determined
\nin each case from the context.”\t (underlining ours) Jowitt’s
\nDictionary of  English Law  Vol. I,  2nd Edn.  at  page\t 669
\ndefines `due’  as, “anything owing, that which one contracts
\nto pay\tor perform to another……….. As applied to a sum
\nof money,  ‘due’ means either that it is owing or that it is
\npayable; in  other words,  it may  mean\t that  the  debt  is
\npayable at  once or  at a  future time.\t It is a question of
\nconstruction which  of these two meanings the word ‘due’ has
\nin a given case”.\n<\/p>\n
     Wharton’s Law  Lexicon, 14th  Edn. at  page 365 defines
\n‘due’ as  anything owing.  It has the following comment, “It
\nshould be observed that a debt is said to be due the instant
\nthat it\t has existence\tas a  debt; it\tmay be\tpayable at a
\nfuture time”.\n<\/p>\n
     Our attention  has been  drawn to\tSection 530(1)(a) of
\nthe Companies  Act where the language used in “taxes. cesses
\nand rates  due and  payable” and  Section  61(1)(a)  of\t the
\nProvincial Insolvency  Act, 1920  which refers\tto all debts
\ndue to\tthe Crown.  In the  State of  Rajasthan\t &  Ors.  v.
\nGhasilal<\/a> (1965\t(2) SCR\t 805),\tthis  Court  considered\t the
\nprovisions  of\t the  Rajasthan\t Sales\tTax  Act,  1955.  It
\nobserved, that\tSection 3  which is  the charging section of
\nthe Rajasthan  Sales Tax Act, read with Section 1, makes tax
\npayable i.e. creates a liability to pay the tax. That is the
\nnormal function\t of a  charging section in a taxing statute.
\nBut till  the tax  payable is  ascertained by  the Assessing
\nAuthority under\t Section 10 or by the assessee under Section
\n7(2), no  tax can  be said to be due. For till then there is
\nonly a\tliability to  be assessed to tax. A similar view was
\ntaken by  this Court  in its  later decision  in  Associated
\nCement Co. Ltd. v. Commercial Tax Officer, Kota & Ors.<\/a> (1981
\n(48) S.T.C.  466 at  page 480)\tholding that  until the\t tax
\npayable is  ascertained by the Assessing Authority or by the
\nassessee, no  tax can be said to be due; for till then there
\nis only a liability to be assessed to tax.\n<\/p>\n
     The Federal  Court in the case of Chatturam and Ors. v.
\nCommissioner of Income-Tax, Bihar (1947 (15) ITR 302 at page\n<\/p>\n
308) held  that the  liability to  pay the tax is founded on
\nSections 3  and 4  of the  Income  Tax\tAct  which  are\t the
\ncharging  sections.   Section  22  etc.\t are  the  machinery
\nsections to  determine the  amount  of\ttax.  It  cited\t the
\nobservations of\t Lord Dunedin in Whitney v. Commissioners of
\nInland Revenue\t(1926 AC  37) as  follows :- “Now, there are
\nthree stages  in the  imposition of  a\ttax.  There  is\t the
\ndeclaration of\tliability, that\t is the\t part of the stature
\nwhich determines  what persons\tin respect  of what property
\nare liable.  Next, there  is the  assessment. Liability does
\nnot depend on assessment, that ex hypothesi has already been
\nfixed. But  assessment particularizes that exact sum which a
\nperson liable  has to  pay.  Lastly,  come  the\t methods  of
\nrecovery if the person taxed does not voluntarily pay.” (See
\nin this\t connection, Kalwa  Devadattam and  Ors. v. Union of
\nIndia and  Ors.<\/a> (1963  (49) ITR\t 165, 171); Doorga Prosad v.
\nThe Secretary  of  State  (13  ITR  285,  289)\tand  Ramyond
\nSynthetics Ltd.\t and Ors.  v. Union  of India and Ors.<\/a> (1992
\n(2) SCC 255 at 286-288).\n<\/p>\n
     “Tax due”\tusually refers\tto an ascertained liability.
\nHowever,  the\tmeaning\t of   the  words  ‘taxes  due’\twill
\nultimately depend  upon the context in which these words are
\nused.\n<\/p>\n
     In the  present case,  the words ‘taxes due’ occur in a
\nsection dealing with distribution of property. At this stage
\nthe taxes ‘due’ have to be actually paid out. Therefore, the
\nphrase ‘taxes  due’  cannot  refer  merely  to\ta  liability
\ncreated by  the charging  section to  pay the  tax under the
\nrelevant law.  It must refer to an ascertained liability for
\npayment of taxes quantified in accordance with law. In other
\nword, taxes  as assessed  which are presently payable by the
\nnotified person\t are taxes  which  have\t to  be\t taken\tinto
\naccount\t under\t Section  11(2)(a)  while  distributing\t the
\nproperty of the notified person. Taxes which are not legally
\nassessed or  assessments which\thave not  become  final\t and
\nbinding on  the assessee,  are\tnot  covered  under  Section
\n11(2)(a) because  unless it is an ascertained and quantified
\nliability, disbursement\t cannot be  made. In  the context of
\nSection 11(2), therefore, “the taxes due” refer to “taxes as
\nfinally assessed”.\n<\/p>\n
Question No. 2<\/span><\/p>\n
     Do these  taxes relate  to any  particular period or do
\nthey cover  all assessed  taxes of  the notified person? The
\nSpecial Court  Act is quite clear in its intent. It seeks to
\ncover  all   criminal  and   civil  proceeding\trelating  to
\ntransactions in\t securities of a notified person between 1st
\nof April,  1991 and  6th of June, 1992. The Special Court is
\nempowered to  examine  all  civil  claims  and\tto  try\t all
\noffences pertaining  to such  transactions during  the\tsaid
\nperiod. Under  Section 3(2)  it\t is  the  property  of\tsuch
\noffenders which\t is attached  by the  Custodian and which is
\ndisbursed under\t the directions\t of the\t Special Court under
\nSection 11(2).\tClearly, therefore,  as the Special Court is
\nempowered to  examine all  transactions in securities during
\nthe period  1.4.1991 to 6.61992, as also all claims relating
\nto the\tproperty attached,  the Special Court will also have
\nto the\tproperty attached,  the Special Court will also have
\nto examine  the tax liability of the notified person arising
\nduring the period 1.4.1991 to 6.61992. As the purpose of the
\nSpecial Court  Act, inter alia, is as far as practicable, to
\nsafeguard  the\tfunds  to  which  the  banks  and  financial
\ninstitutions may be entitled, and to ensure that these funds
\nare not done away with, there are provisions for attachment,
\nascertainment of  claims and distribution of funds. However,
\nbefore the  liabilities of  a notified\tperson to  banks and
\nfinancial institutions\tcan be\tdischarged, Section 11(2)(a)
\nrequires the  tax liability  of the  notified person  to  be
\npaid. In  this context\tthe tax\t liability can\tproperly  be
\nconstrued as  tax liability  of the  notified person arising
\nout of\ttransactions in\t securities  during  the  “statutory
\nperiod” of  1.4.1991  to  6.6.1992.  If,  for  example,\t any
\nincome-tax is  required to  be paid  in connection  with the
\nincome\taccruing   to  a   notified  person  in\t respect  of
\ntransactions in security during the “statutory period”, that
\nliability will\thave to the banks and financial institution.
\nSimilarly, in  respect of any property which is attached, if
\nany rates  or taxes  are payable  for the “statutory period”
\nthose rates  and taxes\twill have  to  be  paid\t before\t the
\nproceeds of  the  property  are\t distributed  to  banks\t and
\nfinancial institutions.\t In the same manner, the liabilities
\nto banks  and financial institutions in Section 11(2)(b) are
\nalso  liabilities   pertaining\tto   the  statutory  period.
\nHowever,  the\textent\tto  which  liability  under  Section
\n11(2)(a) is to be discharged is dealt with a little later.\n<\/p>\n
     Every kind\t of tax liability of the notified person for
\nany  other  period  is\tnot  covered  by  Section  11(2)(a),
\nalthough the  liability may  continue to be the liability of
\nthe notified  person.\tSuch tax liability may be discharged
\neither under  the directions  of the  Special  Court,  under
\nSection 11(2)(c)  or the  taxing authority  may recover\t the
\nsame from  any subsequently  acquired property of a notified
\nperson (vide  1997 (9)\tSCC 123) or in any other manner from
\nthe notified  person in\t accordance with  law. The priority,
\nhowever, which\tis given  under Section 11(2)(a) to such tax
\nliability only covers such liability for the period 1.4.1991
\nt 6.61992.\n<\/p>\n
Questions No.3
\n     At what  point of\ttime should  this tax liability have
\nbecome quantified  by a\t large assessment which is final and
\nbinding on  the notified  person concerned?  It is contended
\nbefore us  by some  of the  parties that only that liability
\nwhich has become ascertained by final assessment on the date
\nof the\tAct coming  into force\tshould be paid under Section
\n11(2)(a). Others  contended that  it  should  have  been  so
\nascertained on\tthe date  of  the  notification.  The  third
\ncontention is that it should have been so ascertained on the
\ndate of\t distribution. Since we have held that tax liability
\nunder Section 12(2)(a) refers only to such liability for the
\nperiod 1.4.1991\t to 6.6.1992, it would not be correct t hold
\nthat the  liabilities arising during this period should also
\nbe finally assessed before 6.6.1992 (the date of the Act) or
\nthe date  of the  notification. It must refer to the date of
\ndistribution. The  date of  distribution  arrives  when\t the
\nSpecial Court  completes the  examination  of  claims  under
\nSection 9A.   It  on that  date, any  tax liability  for the
\nstatutory period  is legally assessed, and the assessment is
\nfinal and  binding on  the notified  person, that  liability
\nwill be\t considered  for  payment  under  Section  11(2)(a),
\nsubject to what follows.\n<\/p>\n
Question N. 4
\n     The  next\t question  is,\t whether  the  assessed\t tax
\nliability for the statutory period requires to be discharged
\nin full\t under Section 11(2)(a) or whether the Special Court
\nhas any\t discretion in\trelation to the extent of payment to
\nbe made\t under Section\t11(2)(a)? The  banks who  have large
\nclaims against\tthe notified  persons have strenuously urged
\nthat the  Special Court\t is not\t required  to  pay  the\t tax
\nliability in  full, but has some discretion as to the extent
\nto which  such liability  will be paid. They have emphasised
\nthe words `shall be paid or discharged in full as far as may
\nbe’ in\tSection 11(2)  as indicating  some discretion in the
\nSpecial Court regarding payment of liabilities under Section
\n11(2)(a). They\tpoint out that at the time when the said Act
\nwas enacted  or when  the Ordinance  which it  replaced\t was
\npromulgated, the  full\textent\tof  the\t funds\tinvolved  in
\nmalpractices leading  to the  diversion of  funds from banks
\nand financial  institutions to\tthe pockets  of the brokers,
\nwas not\t known. Even  after the\t submission of report by the
\nJanakiraman Committee,\ta special  group known\tas an inter-
\ndisciplinary group  was required  to be\t set up to trace the
\nend use\t of funds  involved in\tthis  fraud.  Auditors\twere
\nappointed  to  check  instances\t of  differences  where\t the
\nattached assets\t were short  of problem\t exposure.  It\twas,
\ntherefore, expected  that the  available funds from attached
\nassets\twould  be  speedily  restored  to  the\tbanks\t and
\nfinancial institutions. It was also expected that even after
\nthe discharge  of tax  liabilities for\tthe relevant period,
\nsubstantial funds  would be  left over for being paid to the
\nbanks and financial institutions concerned.\n<\/p>\n
     It is submitted that the Act was not intended to secure
\ntaxes and,  therefore, if  the Special\tCourt finds that the
\ntax liabilities\t are such, and their manner of assessment is
\nsuch, that  it would  result in\t the entire funds being paid
\nover to the taxing authorities, the Special Court would have
\ndiscretion in  deciding how  much should be paid over to the
\ntaxing authority  and how  much should come to the banks and
\nfinancial  institutions.   It\tis   submitted\t with\tsome
\njustification that  Section 11\tshould be  construed in\t the
\ncontext of  the purpose for which it was framed; as was done
\nby this\t Court in  the case  of Tejkumar Balakrishna Ruia v.
\nA.K. Menon  & Anr.<\/a>  (1997 (9)  SCC 123) where the Court said
\nthat  if   two\tinterpretations\t  are  possible,   purposive
\ninterpretation should be resorted to. The Court in that case
\nheld that  the income  or property  obtained by\t a  notified
\nperson after  the date\tof the\tnotification  could  not  be
\nattached under Section 3(3). The purposive interpretation in
\nthe present  case is  to be  resorted to  for the purpose of
\nensuring that  amounts realised from the properties attached
\ncome back to the banks and financial institutions.\n<\/p>\n
     Our attention  was drawn  to the provisions relating to
\nexamination of\tclaims in  insolvency or  of  a\t company  in
\nwinding up.  Debts have\t to be\tproved in  insolvency before
\nthey can  be considered\t for payment  either in\t part of  in
\nfull. Explaining  the powers  of the  insolvency court, this
\nCourt in  The State  of Punjab\tv. S. Rattan Singh<\/a> (1964 (5)
\nSCR 1098  at page  1109) said,\t“It is well-settled that the
\nInsolvency Court  can, both  at the  time of  hearing  t  he
\npetition for  adjudication of  a person\t as an insolvent and
\nsubsequently at the stage of the proof of debts, re-open the
\ntransaction on\tthe basis  of which the creditor had secured
\nthe judgment of a court against the debtor. This is based on
\nthe principle  that  it\t is  for  the  Insolvency  Court  to
\ndetermine at  the time\tof the\thearing of  the petition for
\nInsolvency whether  the alleged\t debtor does  owe the  debts
\nmentioned by  the creditor  in the petition, and whether, if
\nhe owes them, what is the extent of those debts. A debtor is
\nnot to\tbe adjudged  an insolvent  unless he  owes the debts
\nequal to  or more  than\t a  certain  amount,  and  has\talso
\ncommitted an  act of  insolvency. It  is  the  duty  of\t the
\nInsolvency Court, therefore, to determine itself the alleged
\ndebts owed by debtor irrespective of whether those debts are
\nbased on a contract or under a decree of court. At the stage
\nof the\tproof of  the debts,  the debts\t to be proved by the
\ncreditor are  scrutinised by the Official Receiver or by the
\nCourt in  order to  determine the  amount of  all the  debts
\nwhich the  insolvent  owes  as\this  total  assets  will  be
\nutilised for  the payment of his total debts and if any debt
\nis wrongly  included in\t his total debts that will adversely
\naffect the interest of the creditors other than the judgment
\ncreditor in respect of that particular debt as they were not
\nparties to  the suit in which the judgment debt was decreed.
\nThe decree  is not binding on them and it is right that they
\nbe in a position to question the correctness of the judgment
\ndebt.”\n<\/p>\n
     It is  on\tbehalf\tof  all\t these\tcreditors  that\t the
\nInsolvency Court  or the  Official Receiver  scrutinises the
\ndebts, whether claimed under a decree or otherwise. The same
\nis the position of a company in winding up because the rules
\nof insolvency apply to winding up proceedings
\n     In the  case of  S.V. Kondaskar  v. V.M.  Deshpande and
\nAnr. (1972  (1) SCC 438 at page 449) this Court examined the
\nquestion whether  under the Income Tax Act before commencing
\nre-assessment proceedings, leave was required to be taken by
\nthe income  tax authority of the Company Court under Section
\n446 of\tthe Companies  Act, when the assessee-company was in
\nwinding up.  This Court\t said that  the Income\tTax Act is a
\ncomplete code  with respect  to assessment and re-assessment
\nof income  tax. The  proceedings under\tthe Income  Tax\t Act
\nwould not  fall within\tthe meaning of the expression `other
\nlegal proceedings’  in Section\t446  and,  therefore,  leave
\nwould not   be\trequired of the Company Court for commencing
\nsuch proceedings.  This Court,\thowever, went on to observe,
\n(in paragraph  18) “We\thave not been shown any principle on
\nwhich the  liquidation court should be vested with the power
\nto stop assessment proceedings for determining the amount of
\ntax payable  by the  company which  is being  wound up.\t The
\nliquidation court  would   have full power to scrutinise the
\nclaim of  the Revenue  after income  tax has been determined
\nand its\t payment demanded  from the  liquidator. It would be
\nopen to the liquidation court then, to decide how far, under
\nthe  law,  the\tamount\tof  income  tax\t determined  by\t the
\ndepartment should  b e accepted as a lawful liability on the
\nfunds of  the company  in liquidation.\tAt  that  stage\t the
\nwinding up  court can  full safeguard  the interests  of the
\ncompany and its creditors under the Act”.\n<\/p>\n
     Explaining this  decision, this  Court (a\tbench of two
\njudges) in  the case of Assistant Commissioner of Income Tax
\nv. A.K.\t Menon &  Ors.<\/a> (1995  (5) SCC  200)  held  that\t the
\nSpecial Court  under the  present Act has no power to sit in
\nappeal over  the orders\t of Tax\t Authorities,  Tribunals  or
\nCourts. The claims relating to tax liabilities of a notified
\nperson are,  along with revenues, cesses and rates, entitled
\nto be paid first in the order of priority and in full as far
\nas may be.\n<\/p>\n
     While we  respectfully agree  with the finding that the
\nSpecial Court  cannot sit  in appeal  over the assessment of
\ntaxes by  the Tax  Authorities, we would like to qualify the
\nCourt’s subsequent  observations relating to payment in full
\nof all\tassessed taxes\tunder  Section\t11(2)(a).  There  is
\nundoubtedly no\tquestion of any reopening of tax assessments
\nbefore the  Special Court.  There is also no provision under
\nthe Special  Court Act\tfor proof of debts as in Insolvency.
\nThe provisions\tin the\tSpecial Court Act for examination of
\nclaims are  under Section  9A. A  claim in  respect  of\t tax
\nassessed, therefore,  cannot  be  reopened  by\tthe  Special
\nCourt. The  liability of  the notified person to pay the tax
\nwill have  to be  determined under the machinery provided by
\nthe relevant  tax law.\tThe extent  of liability, therefore,
\ncannot be examined by the Special Court.\n<\/p>\n
     But the  Special Court  can decide\t  how  much of\tthat
\nliability will\tbe discharged  out of the funds in the hands
\nof the\tCustodian. This\t is because  the tax  liability of a
\nnotified person\t having priority  under Section\t 11(2)(a) is
\nonly tax  liability pertaining\tto the\t“statutory  period”.
\nSecondly payment  in full  may or  may not  be made  by\t the
\nSpecial Court  depending  upon\tvarious\t circumstances.\t The
\nSpecial Court can, for this purpose examine whether there is
\nany fraud, collusion or miscarriage of justice in assessment
\nproceedings. The  assessee who\tis before the Special Court,
\nis a person liable to be charged with an offence relating to
\ntransactions  in   Securities.\tHe   may   not,\t  in   these
\ncircumstances, explain\ttransactions before  t he income-tax
\nauthorities, in\t case his position is prejudicially affected
\nin defending  criminal charges.\t Then,\ton  account  of\t his
\nproperty being\tattached, he  may not  be in  a position  to
\ndeposit\t the   tax  assessed  or  file\tappeals\t or  further
\nproceedings under  the relevant\t tax law which he could have
\notherwise done.\t Where the  assessment is  based  on  proper
\nmaterial and pertains to the “statutory period”, the Special
\nCourt may not reduce the tax claimed and pay it out in full.
\nBut if\tthe assessment\tis a “best judgment” assessment, the
\nSpecial Court  may examine  whether, for example, the income
\nwhich is  so assessed to tax bears comparison to the amounts
\nattached by  the Custodian, or whether the taxes so assessed
\nare grossly  disproportionate to  t  he\t properties  of\t the
\nassessee  in  the  hands  of  the  Custodian,  applying\t the
\nWednesbury principle  of proportionality.  The Special Court
\nmay in\tthese cases, scale down the tax liability to be paid
\nout of the funds in the hands of the Custodian.\n<\/p>\n
     Although the  liability of the assessee for the balance
\ntax would  subsist, and\t the  Taxing  Authorities  would  be
\nentitled  to   realise\tthe  remaining\tliability  from\t the
\nassessee, the  same will  not be  paid in  priority over the
\nclaims of  everybody else  under Section  11(2)(a).  If\t the
\nSpecial Court  so decides,  it may  direct  payment  of\t the
\nbalance liability  under  Section  11(2)(c).  Otherwise\t the
\ntaxing authorities  may recover\t the  same  from  any  other
\nsubsequently acquired  property of  the assessee  or in\t any
\nother manner  in accordance  with law.\tSuch  scaling  down,
\nhowever, should be done only in serious cases of miscarriage
\nof justice,  fraud or collusion, or where tax assessed is so
\ndisproportionately high\t in relation  to the  funds  in\t the
\nhands of  the Custodian\t as to\trequire scaling\t down in the
\ninterest  of   the  claims   of\t the   banks  and  financial
\ninstitutions and  to further  the purpose  of the  Act.\t The
\nSpecial Court  must have  strong reasons  for doing  so.  In
\nfact, the  Income Tax  Authorities have\t also accepted\tthat
\nexorbitant  tax\t  demands  can\t be  ignored,  applying\t the
\nWednesbury Principles.\n<\/p>\n
Question No. 5<\/span><\/p>\n
     One other\tconnected question  remains: whether “taxes”
\nunder Section  11(2)(a) would include interest or penalty as
\nwell? We  are concerned in the present case with penalty and
\ninterest under the Income Tax Act. Tax, penalty and interest
\nare  different\tconcepts  under\t the  Income  Tax  Act.\t The
\ndefinition of  “tax” under  Section 2(43)  does not  include
\npenalty or  interest. Similarly,  under Section\t 157, it  is
\nprovided that  when any\t tax, interest, penalty, fine or any
\nother sum  is payable  in consequence  of any  order  passed
\nunder this  Act, the  Assessing Officer shall serve upon the
\nassessee a  notice of  demand as  prescribed. Provisions for
\nimposition of  penalty and  interest are  distinct from\t the
\nprovisions for\timposition of  tax.  Learned  Special  Court
\njudge, after  examining various authorities in paragraphs 61
\nto 70  of his  judgment, has  come to  the  conclusion\tthat
\nneither penalty\t nor interest can be considered as tax under
\nSection 11(2)(a). We agree with the reasoning and conclusion
\ndrawn by the Special Court in this connection.\n<\/p>\n
Question No. 6<\/span><\/p>\n
     The Special  Court has,  in the impugned judgment, also
\ndwelt at  some length on the question whether it can absolve
\na notified  person from\t imposition of\tpenalty or  interest
\nafter the  date of  the notification.  Since the liabilities
\ncovered under  Section 11(2)(a) are only liabilities arising
\nduring the  period 1.4.1991  to 6.6.1992.  and do  not cover
\npenalty and  interest, this  question does not really arise.
\nIn any\tcase, interest\tor penalty for any action or default
\nafter the  date of  the notification, are not covered by the
\nAct. However,  we must\treiterate that a taking statute is a
\ncode in\t itself for  imposition of tax, penalty or interest.
\nThe remedy  of a  notified person who is assessed to penalty
\nor interest, after the notified period, would be to move the
\nappropriate authority  under  the  taxing  statute  in\tthat
\nconnection. If\tit is  open to him under the relevant taxing
\nstatute to  contend that  he was  unable to pay his taxes on
\naccount of  the attachment  of all  his properties under the
\nSpecial Court  Act, and\t that there  is a  valid reason\t why
\npenalty or interest should not be imposed upon him after the
\ndate of\t notification, the  concerned authorities  under the
\nTaxing Statute\tcan take  notice of  these circumstances  in
\naccordance with\t law for  the purpose  of  deciding  whether
\npenalty or  interest can  be imposed on the notified person.
\nThe Special Court is required to consider this question only
\nfrom the  point of  view of  distributing any  part  of\t the
\nsurplus assets\tin the\thands of  the  Custodian  after\t the
\ndischarge  of\tliabilities  under   Section  11(2)(a)\t and
\n11(2)(b).  The\tSpecial\t Court\thas  full  discretion  under
\nSection 11(2)(c) to decide whether such claim for penalty or
\ninterest should\t be paid  out of  any surplus  funds in\t the
\nhands of the Custodian.\n<\/p>\n
     This, we  hope, answers  all questions  which arise for
\ndetermination in the present appeals. Pursuant to an interim
\norder dated  26.8.1996, certain\t payments have\tbeen made to
\nIncome Tax Authorities. The Income Tax Authorities, however,
\nhave given  an undertaking  which is  filed by the Secretary
\n(Revenue) in  the Ministry  of Finance, Union of India, that
\nthe Union  of India  shall, within four weeks f being called
\nupon so\t to do, either by this Court or by the Special Court
\nin this\t or any other proceeding under the Special Curt Act,
\nbring back to Court the moneys s paid r part r parts thereof
\nas directed,  and pay  thereon interest\t at a  rate not less
\nthan 18%  per annum  as this  Court or the Special Court may
\ndirect from  the date  of receipt  until the  date of return
\nthereof. The  Special Court  shall examine  the claim of the
\nIncome Tax  Authorities for taxes due under Section 11(2)(a)
\nin the\tlight of  our judgment and decide whether any amount
\npaid to\t the Income Tax Authorities under the interim orders
\nof this\t Court requires\t to be\treturned. The  Special Court
\nshall pass  appropriate orders\tthereon in  the light of the
\nundertaking given.\n<\/p>\n
     This Court,  by an\t order\tdated  11.3.1996,  had\talso
\ndirected the  Custodian to  draft a scheme in respect of the
\nshares held by the Custodian whereby such shares can be sold
\nfrom time  to time.  The  Custodian  was  also\tdirected  to
\nforwarded the scheme for the approval of the Union of India.
\nPursuant to  these directions,\tthen Custodian\tforwarded  a
\ndraft scheme`  for approval  to\t the  Union  of\t India.\t The
\nMinistry of  Finance, Department f Economic Affairs (Banking
\nDivision) approved  the draft  scheme sent  by the Custodian
\nwith certain  modifications. The  final scheme incorporating
\nthe modifications  by the  Union of  India has been filed in
\nthis Court. This scheme, with further modifications, if any,
\nshall be  considered by\t the Special  Court and\t appropriate
\norders may  be passed  by the Special Curt in respect of the
\nscheme so submitted.\n<\/p>\n
     In view  of the  interpretation which  we have  put  on
\nSection 11  of the Special Court Act and Section 3(3) of the
\nSpecial Court  Act,  the  challenge  to\t the  constitutional
\nvalidity of  Section 11\t read with  Section  3(3)  does\t not
\nsurvive. If,  according to  any of  the banks  or  financial
\ninstitutions, any  of the properties attached belongs to the
\nbank or\t financial institution concerned, it is open to that
\nbank or\t financial institution\tto file\t a claim  before the
\nSpecial Court  in that connection and establish its right to
\nthe property attached or any part thereof in accordance with
\nlaw. Obviously,\t until such  a claim  is  determined,\t the
\nproperty  attached  cannot  be\tsold  or  distributed  under
\nSection 11.  Transfer Case  No. 5  of  1998  is,  therefore,
\ndismissed.\n<\/p>\n
     All the  appeals are disposed of as above with no order
\nas to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Harshad Shantilal Mehta vs Custodian & Ors on 13 May, 1998 Author: M S V.Manohar Bench: Sujata V. Manohar, S.P. Kurdukar, D.P. Wadhwa PETITIONER: HARSHAD SHANTILAL MEHTA Vs. RESPONDENT: CUSTODIAN & ORS. DATE OF JUDGMENT: 13\/05\/1998 BENCH: SUJATA V. MANOHAR, S.P. KURDUKAR, D.P. WADHWA ACT: HEADNOTE: JUDGMENT: [With C.A. Nos. 5147\/1995, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-41239","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nHarshad Shantilal Mehta vs Custodian & Ors on 13 May, 1998 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/harshad-shantilal-mehta-vs-custodian-ors-on-13-may-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Harshad Shantilal Mehta vs Custodian & Ors on 13 May, 1998 - 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