Bhupen Dalal vs A.K. Menon

G.D. Kamat, J.—These two appeals can be disposed of under a common order.

The Special Court under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992, in Suo Motu Contempt Notice No. 1 of 1995 by its order dated June 22, 1995, convicted the appellant, Bhupen Dalal, a notified person for not having complied with the order of the court for disclosing his assets on affidavit and upon having held him guilty, imposed a sentence of simple imprisonment for a period of three months and to pay a fine of 2,000. The court also observed while passing the order that undergoing imprisonment and payment of fine shall not absolve the appellant from filing the affidavit disclosing all his assets. This order is the subject-matter of challenge in Appeal No. 856 of 1995.

An affidavit disclosing his assets was filed by the appellant and upon that event, a review petition, being Review Petition No. 1 of 1995, was instituted seeking to get the order of June 22, 1995, reviewed. The learned judge disposed of the review petition by the order dated July 24, 1995. The learned judge, refusing to set aside the earlier order made by him holding the appellant guilty, observed that the appellant could be given an opportunity to prove his sincerity and if the directions earlier given are complied with and all assets are disclosed as directed by the earlier order within 12 weeks from the date of the order, the question of the appellant undergoing simple imprisonment shall not take effect. The court also further observed that in the event of there being no such disclosure within the time, the order was to automatically take effect. The second order dated July 24, 1995, is the subject-matter of challenge in Appeal No. 925 of 1995.

Mr. Setalwad, learned counsel appearing for the respondent-custodian, raised a preliminary objection to the maintainability of these appeals on the ground that even when the appellant has been convicted under the Contempt of Courts Act inasmuch as such orders are made by the Special Court, no appeal can be entertained by the High Court and the remedy, if any, is to the Supreme Court. In support of this proposition, Mr. Setalwad, relies upon sections 10 and 13 of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (for short "the Special Court Act"). Mr. Setalwad urged that under the Special Court Act, appeal against any judgment, order, decree or sentence directly lies to the Supreme Court, both on questions of facts and on law and this is amply clear according to him by reading the provisions of section 10(1) and section 13 of the Act. He further contended that section 13 of the Act is and overriding provision with non-obstante clause, viz., notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law, other than this Act, or in any decree or order of any court, tribunal or other authority. He, therefore, urged that there can be no scope for any appeal being entertained u/s 19 of the Contempt of Courts Act, 1971. He says that these two appeals are not maintainable and are liable to be summarily rejected.

Mr. Zaiwalla in answer to the point of maintainability of these appeals, contends that section 11A has been for the first time incorporated in the Special Court Act on January 25, 1994. According to him, it is, therefore, clear that prior to the incorporation of section 11A, the Special Court had no power to punish a person for having committed contempt of the Special Court. Relying on section 11A, Mr. Zaiwalla contends that a reference has been specifically made to the Contempt of Courts Act, 1971, in that section and further regard being had to section 11A(a) he says that section 11A shall have effect subject to the modification that the references therein to the High Court shall be construed as including a reference to such Special Court. He says that it is clear that a person who has been dealt with under the Contempt of Courts Act is entitled to prefer an appeal as a matter of right as expressed in section 19(a). He, therefore, urged that once the Special Court exercises the power u/s 11A and holds a person guilty and punishes him, as a matter of right, he can institute an appeal which can only be heard by the Division Bench of the High Court.

He then says that section 10 of the Special Court Act will have to be read along with section 11A. According to him, the non-obstante clause of section 10 which bars appeals except to the Supreme Court is restricted only in so far as appeals arising out of the Code of Criminal Procedure, the CPC and the Arbitration Act, 1940, are concerned. He urged that the Contempt of Courts Act, 1971, is clearly excluded. He, therefore, says that when a person has committed contempt under the Contempt of Courts Act regard being had to section 10 read with section 11A, there can be no bar on the appeal being heard by the Division Bench of the High Court u/s 19 of the Contempt of Courts Act.

Mr. Zaiwalla in support of the contention that section 19 of the Contempt of Courts Act governs the field in respect of intra court appeal and the appellant has the right of appeal under that provision, took us through the provisions of section 2(d) of the Special Court Act which defines "Special Court" and sections 5(2), 6, 8, and 9 thereof. According to him, the Special Court is a sitting judge of the High Court and is otherwise to follow the procedure prescribed for trial of warrant cases before the Magistrate. He says that inasmuch as the Special Court is to consist of the sitting judge of the High Court nominated by the Chief Justice for all purposes, he is a judge of the High Court and, therefore, section 19 of the Contempt of Courts Act is attracted which pertains to a right of appeal to a Division Bench of a High Court. There can be no doubt that an appeal lies to a Bench as of right from any order or decision of the single judge of the High Court in exercise of its jurisdiction to punish for contempt u/s 19(1)(a) of the Contempt of Courts Act, 1971.

In our opinion, the question as to the maintainability of the present appeals is one of interpretation of the provisions of the Special Court Act. A Special Court is established for trial of offences relating to transactions in securities and matters connected therewith or incidental thereto. Section 2(d) defines "Special Court" to mean the Special Court established under sub-section (1) of section 5. Section 5 speaks of establishment of a Special Court, by which the Central Government, by notification in the Official Gazette, has established a court to be called the Special Court. Sub-section (2) thereof says that the Special Court shall consist of a sitting judge of the High Court nominated by the Chief Justice of the High Court within the local limits of whose jurisdiction the Special Court is situated with the concurrence of the Chief Justice of India.

Section 6 speaks of cognizance of cases by the Special Court which may be instituted before it or transferred to it as provided in the Act. Section 8 provides jurisdiction to the Special Court to try any person concerned in the offence referred to in sub-section (2) of section 3 either as a principal, conspirator or abettor and all other offences and empowers joint trial also. In so far as procedures and powers of the Special Court are concerned, they are spoken to in section 9. In that the Special Court shall in the cases of trial before it follow the procedure prescribed by the court for the trial of warrant cases before the Magistrate. "Code" has been defined u/s 2(b) to mean Code of Criminal Procedure, 1973.

Section 10 of the Special Court Act provides for appeal. It reads thus :

"Appeal. - (1) Notwithstanding anything in the Code, the Code of Civil Procedure, 1908, or the Arbitration Act, 1940, an appeal shall lie from any judgment, decree, sentence or order, not being interlocutory order, of the Special Court to the Supreme Court both on facts and on law.

(2) Except as aforesaid, no appeal or revision shall lie to any court from any judgment, decree, sentence or order of the Special Court.

(3) Every appeal under this section shall be preferred with a period of 30 days from the date of any judgment, sentence or order of the Special Court :

Provided that the Supreme Court may entertain an appeal after the expiry of the said period of 30 days if it is satisfied that the appellant had sufficient cause for not preferring the appeal within the period of 30 days."

From the aforesaid, it is clear that notwithstanding anything contained in the Code of Criminal Procedure, the CPC and the Arbitration Act, an appeal has been provided from any judgment, decree, sentence or order not being an interlocutory order made by the Special Court to the Supreme Court both on facts and on law. Sub-section (2) makes it clear that except what is said in sub-section (1) of section 10, no appeal or revision shall lie to any court from any judgment, decree, sentence or order of the Special Court and sub-section (3) thereof provides a period of limitation for such an appeal.

In our view, an order of the Special Court regarding contempt of it committed by a person punishable under the Contempt of Courts Act, would be an order passed by the Special Court constituted and governed by the Special Court Act. The said Act, in our opinion, is a complete code and, therefore, all appeals would be governed by the provisions of the said Special Court Act. Section 10 thereof in clear terms provides for appeal only to the Supreme Court.

Section 13 speaks of overriding effect of the Special Court Act and in terms states that the provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instrument having effect by virtue of any law other than the said Act or in any decree or order of any court, tribunal or other authority.

In other words, the provisions of the Special Court Act have overriding effect over other laws for the time being in force and that too notwithstanding anything inconsistent therewith.

It is indeed true that section 11A was incorporated for the first time in the Special Court Act as from January 24, 1994. It reads thus :

"The Special Court shall have, and exercise, the same jurisdiction, powers and authority in respect of contempt of itself as a High Court has and may exercise and, for this purpose, the provisions of the Contempt of Courts Act, 1971, shall have effect subject to the modifications that -

(a) the references therein to the High Court shall be construed as including a reference to such Special Court;

(b) the references to the Advocate-General in section 15 of the said Act, shall be construed, in relation to the Special Court, as a reference to the Attorney-General or the Solicitor-General or Additional Solicitor-General."

A bare reading of this provision would suggest that the Special Court has been conferred powers and authority to punish a person for contempt of itself as a High Court under the provisions of the Contempt of Courts Act, 1971, with the modifications that the reference therein to the High Court shall be construed as including a reference to such Special Court. In other words, the reference in the Contempt of Courts Act, 1971, to the High Court has been substituted by the Special Court in the matter of exercising powers under the Contempt of Courts Act 1971.

It is, therefore, not possible to accept the contention of Mr. Zaiwalla, learned counsel appearing for the appellants, that merely because a sitting judge of the High Court is nominated by the Chief Justice as a Special Court, when the Special Court exercises powers under the provisions of the Contempt of Courts Act, the Special Court is a High Court. In our view, when the Special Court exercises its powers u/s 11A, such powers are exercised by the Special Court though the Special Court is composed of a sitting judge of a High Court. Coming back to section 10 of the Special Court Act, it is again not possible to accept the contention of Mr. Zaiwalla that the non-obstante clause is restricted only in so far as matters arising out of the Code of Criminal Procedure, 1973, the Code of Civil Procedure, 1908, and the Arbitration Act, 1940, are concerned and, therefore, the Contempt of Courts Act, 1971, is excluded. In other words, the attempt of Mr. Zaiwalla is to suggest that as long as there is no mention of the Contempt of Courts Act in section 10, an appeal will lie to the High Court and not to the Supreme Court. In our view, it is not possible to hold that section 10 of the Special Court Act can be read as suggested by Mr. Zaiwalla that the non-obstante clause excludes appeals to the Supreme Court only when such appeals or matters arise under the Code of Criminal Procedure or the CPC or the Arbitration Act, or that when a person is convicted under the Contempt of Courts Act, such an appeal can be entertained by the High Court.

Even without referring to the non-obstante clause contained therein, section 10 otherwise also gives a right to appeal only to the Supreme Court. It cannot, therefore, be gainsaid that just because the said section 10 starts with a non-obstante clause a restricted meaning as suggested by Mr. Zaiwalla is to be given.

The sweep of section 10 is that against every order, sentence, judgment or decree of the Special Court, an appeal directly lies to the Supreme Court. This provision read with section 13 which gives the Special Court Act overriding effect is a clear indicator that the jurisdiction of the High Court is clearly ousted. In our view, the incorporation of section 11A into the Special Court Act at a later date and non-mention of the Contempt of Courts Act along with the other three statutes have not made any difference in so far as the scope of section 10 read with section 13 concerned and all that section 11A has done is to give powers to the Special Court to punish a person before that court for having committed contempt of the Special Court. When a person is punished a Special Court for having committed contempt of itself, the order is naturally made by the Special Court and, therefore, an appeal against such order can only lie to the Supreme Court and not to the High Court.

In our view, these appeals cannot be entertained by this court and, hence, they are rejected.

Certified copy expedited.