Evidence Act, 1872
Sections 101 & 102—Burden of proving existence of debts—Applications for recovery having been filed by the Custodian with allegation that appellants were debtors of benami companies of notified person—Appellants took a categoric stand in their depositions that they had returned the amounts borrowed from alleged benami companies, but the books of accounts were not available because of lapse of time—Plea of appellants could not be treated as unnatural or an afterthought because once transactions were completed and loans were repaid, there was no reason for appellants to have entertained a 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.
[Para 38]
Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992
Section 3—Applications for recovery having been filed by the Custodian with allegation that appellants were debtors of benami companies of notified person—Properties of the person notified under Section 3(2) would stand attached automatically with effect from the date of notification by virtue of Section 3(3) of the Special Court (Trial of Offences relating to Transactions in Securities) Act—Since second respondent was notified (as being a debtor of the originally notified company FFSL) with effect from 6th October, 2001, a fortiori, his properties would be deemed to be attached with effect from that date and not prior thereto.
[Para 35]
Section 3, 9A & 10—Applications for recovery having been filed by the Custodian with allegation that appellants were debtors of benami companies of notified person—Plea of appellants that they had returned the borrowed amounts—Special Court in its separate judgments directed appellants to pay the respective amounts due to the alleged benami companies of the notified person—Special Court held that appellants were the garnishees of notified person—Entire case of the Custodian regarding subsisting debts of the appellant towards alleged benami companies of the notified person was based on a communication received from the Income Tax Department—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—Custodian failed to discharge its burden of proof against appellants—Conclusions drawn and findings recorded in the impugned judgments passed by the Special Court that appellants failed to prove the fact that the amounts had been repaid to the benami companies of the notified person do not stand to scrutiny and cannot be sustained as being contrary to facts and law—Appellants cannot be held liable to pay alleged dues to the Custodian—Impugned judgments are set aside—Appeal allowed.
[Paras 36 to 38]