Special Court(Trial of Offences relating to transactions in Securities) Act, 1992, Section 3(2), 3(3), 9A, 10, 11(1), 11(2) – Offences relating to transactions in Securities – Debtors of the benami companies of the notified person – Applications for recovery filed by the Custodian allowed against appellant and directed to pay amount as stated – Entire case of the Custodian regarding subsisting debts of the appellant towards respondent Nos. 6, 7 and 8 was based on a communication received from the Income Tax Department – The appropriate witness to prove such communication would be the official concerned from the Income Tax Department -No witness from the Income Tax Department was examined in support of the recovery application – Even the communication forwarded by the Income Tax Department and relied upon by the Custodian was not proved by proper evidence – Appellants took a categoric stand in their depositions that they had returned the amounts borrowed from respondent Nos. 6, 7 and 8, but the books of accounts were not available because of lapse of time – The said plea of the appellants could not be treated as unnatural or an after thought because once the transactions were completed and the loans were repaid, there was no reason for the appellants to have entertaineda belief that after a period of about 13 years, they would be required to present the account books pertaining to transactions -It was neither a requirement in law nor could it be expected from the appellants herein to retain the books of accounts after more than a decade of the alleged suspicious transactions – Held that the conclusions drawn and the findings recorded in the impugned judgments passed by the Special Court that the appellants herein failed to prove the fact that the amounts had been repaid to the benami companies of the notified person, namely, Pallav Sheth do not stand to scrutiny and cannot be sustained as being contrary to facts and law – Impugned judgments liable to be quashed and set aside – Amounts deposited by the appellants in furtherance of the order dated 14th March, 2014 shall be reimbursed to them forth with. (Para 37 to 42)
SUPREME COURT OF INDIA
2024 STPL(Web) 146 SC
[2024 INSC 170]
Suman L. Shah Vs. The Custodian & Ors
Civil Appeal No(S). 4577 of 2011 with Civil Appeal No(S).4583 of 2011-Decided on 05-03-2024
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