Section 11. Certain transfers to be null and void
Where after the issue of a notice under section 6 or under section 10, any property referred to in the said notice is transferred by any mode whatsoever such transfer shall, for the purposes of the proceedings under this Act, be ignored and if such property is subsequently forfeited to the Central Government under section 7, then, the transfer of such property shall be deemed to be null and void.
How courts have applied section 11
- Transfers of property made after a Section 6 notice are null and void under Section 11, even against bona fide purchasers.1,2,3
- A transfer before the Section 6 notice by a bona fide transferee for adequate consideration is not liable to forfeiture.4
- Post-notice purchasers cannot challenge the forfeiture; their remedy lies in a civil suit for damages against the prior owner.5,3
- Title to property covered by a Section 6 notice vests with the Central Government from the date of the notice, so later purchasers have no locus to question a vacation notice.6
- A notice to vacate issued by an SDM under Section 19(1) is not an appealable order under the Act.6,7,8
- Even where Section 11 bars the purchasers' claims, authorities may consider Section 9 (fine in lieu of forfeiture) and value the property at the current market rate.9,10,11
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The judgements here mostly concern transfers of property made after a notice under Section 6 of SAFEMA, and how Section 11 treats such transfers as null and void in subsequent forfeiture proceedings. Courts have repeatedly held that any transfer after the Section 6 notice is deemed void under Section 11, and that even purchasers who claim to be bona fide cannot derive title or resist forfeiture. The prohibition operates retrospectively, so a post-notice purchaser cannot assert natural justice rights against the government; their remedy, if any, lies in a civil suit against the prior owner for damages. In several orders, subsequent purchasers who bought after the Section 6 notice could not question the forfeiture or the subsequent vacation notice, because title was held to vest in the Central Government from the date of the Section 6 notice.1,2,3,6,7
The timing of the transfer relative to the Section 6 notice is the decisive fact. A transfer before the notice, by a bona fide transferee for adequate consideration, is not liable to forfeiture; such a third party holds the property in their own right. Conversely, a transfer after the notice is void, even against bona fide purchasers. One case adds that where a property was forfeited and the owner sold it during pending appeal proceedings in breach of a court undertaking, the purchaser—aware of suspicious circumstances—was not bona fide and the transfer was void under Section 11; the property had already vested in the Government upon confirmation of forfeiture. Courts have also noted that purchasers may claim damages from erstwhile owners, but cannot claim the property itself.4,12,1,2,5,13,3
A related, recurring question is relief after forfeiture. Some orders show that even where Section 11 barred the purchasers' claims, the authorities or courts considered Section 9 (fine in lieu of forfeiture) as a relief measure, directing that representations be considered and valuations be made at the current market rate. In one case, the court upheld the forfeiture notice and Section 11's effect but gave the claimed bona fide buyers liberty to make representations, directing the authority to consider Section 9 and pass orders after a personal hearing. Another matter turns on Section 11 being invoked after the Supreme Court's ruling had attained finality, such that the merits, including Section 9, could not be re-agitated. A few orders concern procedural points rather than the merits: a notice to vacate issued by an SDM under Section 19(1) was held not to be an appealable order under SAFEMA.9,10,11,14,6,7,8
Some judgements touch on the preconditions and limits of forfeiture proceedings themselves, though they do not turn on Section 11. Section 6(1) does not require the primary notice to be served on the convict when forfeiture is initiated against relatives; the notice must go to the person who holds the tainted property, and recording 'reasons to believe' is a jurisdictional condition precedent. Forfeiture proceedings cannot be founded on a detention order that is void, and if the detention fails, proceedings against relatives do not survive. A challenge to the Competent Authority's reopening of proceedings over twelve years later, without evidence linking the property to the affected person, was dismissed as unjustifiable harassment.15,16,17
By court
Outcomes
Judgements applying section 11
SAFEMA 1976: Supreme Court (Khanwilkar & Khanna JJ., 14-12-2021, CA Nos. 8592-8593 of 2010) held that a primary notice under s.6(1) need not be served on the convict when forfeiture targets properties held by his relatives; notice lies to the person to whom the Act applies holding the property;
AllowedOpenThe Supreme Court held that a purchaser who bought property from a relative of a COFEPOSA detenu during pending forfeiture proceedings, in breach of a court undertaking, was not a bona fide purchaser.
DismissedOpenOriginal owners challenged the Appellate Tribunal's dismissal of their delayed appeals against forfeiture of their property under SAFEMA, citing non-service and lack of knowledge.
DismissedOpenCourt dismissed writ petitions challenging forfeiture of property purchased from erstwhile owners. Held that sales after Section 6 notice under SFEM Act 1976 are void per Section 11, regardless of bona fide status, as Act applies retrospectively.
DisposedOpenHigh Court dismissed petitions by property purchasers challenging forfeiture orders under SAFEM Act 1976, ruling that sales made after a Section 6 notice were null and void, regardless of purchasers' bona fide status.
DisposedOpenThe Court dismissed three writ petitions filed by purported bona fide purchasers. It held that purchases made after a Section 6 notice under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act 1976 are null and void, regardless of the purchaser's lack of notice.
DisposedOpen
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This judgment quashes an order forfeiting immovable property under SAFEMA. The Tribunal empowered that the appellants, being bona fide purchasers for valid consideration prior to the detention of the alleged smuggler, fall outside the Act's scope and are not liable for forfeiture.
In a writ petition, the Delhi High Court dismissed the Competent Authority's challenge to a Tribunal order releasing a property from forfeiture, finding the Authority acted arbitrarily by reopening a case after twelve years without evidence linking the respondent to a benami transaction.
Writ Petition (Civil)OpenThree petitions arising from SAFEMA forfeiture proceedings against a detenu's relatives and the tenants of the forfeited building. The High Court quashed the order of detention and the consequential forfeiture orders, holding that SAFEMA proceedings could not survive once the detention order was revoked on the lifting…
AllowedOpenSAFEMA 1976 forfeiture; COFEPOSA detention 1975 (Emergency); Section 2(2)(b) person affected; Section 6(1) notice dated 31.03.1976; Section 7(1) forfeiture order dated 08.08.1995; Section 8 burden of proof on affected person not discharged by legal heirs; Section 9 option to pay cost where 50% consideration explained;
DismissedOpenThe Appellate Tribunal fixed the current market value of 75% of a forfeited property for payment by appellants to avoid auction, citing High Court directions and statutory provisions, rejecting the claim for older valuation rates.
The Appellate Tribunal disposed of forfeiture appeals regarding land in Bangalore. The Tribunal directed the appellant to pay the current market value (Rs. 1944/sq.
The High Court of Madras dismissed writ petitions challenging a notice under the SAFEMA Act. The court held that the petitioners, being subsequent purchasers after the notice was issued, could not claim rights under the Act.
DismissedOpenThe Appellate Tribunal under SAFEMA dismissed an appeal частично, upholding its decision to quash the forfeiture order against the appraisal. The Tribunal noted that the appellant's right to property requires a fair hearing.
Petitioners challenged a forfeiture notice under the Smugglers and Foreign Exchange Manipulators Act affecting properties they purchased for adequate consideration.
DisposedOpenThe Appellate Tribunal held that appeals against a district magistrate's notice to vacate forfeited property do not lie to the Tribunal. It further held that subsequent purchasers cannot claim protection as bona fide transferees if they bought the property after a Section 6 notice was issued to the original owner.
Sixteen appellants challenged a vacation notice regarding property forfeited to the Central Government under SAFEMA. The bench held that the notice was not an order under the Act against which appeals lie to this Tribunal and dismissed the appeals, noting the indivicuals were not covered under the Act.
In consolidated appeals, the Tribunal dismissed challenges to a notice demanding vacation of properties previously forfeited to the Central Government. The court held that the notice was not appealable and the appellants were not covered under the Act due to the void transfer after a Section 6 notice.
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The Appellate Tribunal dismissed appeals filed against notices to vacate properties forfeited to the Central Government under SAFEMA. The court held that these notices were not orders under the Act, and the transfers of the property were illegal under Section 11 as they occurred after notice issuance.
The Tribunal dismissed sixteen appeals filed by subsequent purchasers against a vacation notice for property forfeited under SAFEMA. The Tribunal held the Tribunal lacks jurisdiction as the notice is not an order under SAFEMA and dismissed appeals on merits, ruling transfers illegal under Section 11 once a Section 6…
Appeals filed by subsequent purchasers against a vacation notice regarding properties forfeited under SAFEMA. Tribunal held it lacks jurisdiction as the notice is not an order under the Act and transferees are not covered due to Section 11 bar on transactions post-Section 6 notice.
Sixteen appeals were filed by subsequent purchasers challenging a notice dated 04.05.2018 directing them to vacate properties forfeited to the Central Government under SAFEMA.