Partly allowed

FPA-1/DLI/2015 of Late Shri Chandra Kumar Jain v/s The Competent Authority, Delhi

ATFP4 May 2017FPA-1/DLI/2015

Case brief

AI extract

What is this about?

The Appellate Tribunal allowed the appeal partly. It set aside forfeiture of a house, a car, and specific cash/jewellery as independent properties of relatives with proven sources. However, it upheld forfeiture of fixed deposits and funds not satisfactorily explained despite the detenue's detention proximity.

What did the court decide?

Forfeiture of house, car, Rs. 70,000 cash, and jewellery set aside; forfeiture of fixed deposits (Rs. 4L) and shares (Rs. 4.2L cash) upheld.

FPA-1/DLI/2015 of Late Shri Chandra Kumar Jain v/s The Competent… — Corruption | ATFP (2017)

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APPELLATE TRIBUNAL FOR FORFEITED PROPERTY AT NEW DELHI

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Date of Judgement: 04.05.2017

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MP-7/DLI/2015 (Stay)

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FPA-1/DLI/2015

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Late Shri Chandra Kumar Jain … Appellants/Applicants (Through Legal Heirs)

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Smt. Manju Jain (Wife) Mr. Kapil Jain (Son) Ms. Nidhi Jain (Daughter)

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Versus

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The Competent Authority, Delhi … Respondent

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Advocates/Authorized Representatives who appeared

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For the appellants	:	Shri Yoginder Handoo, Advocate & Shri Nikhil Bhatt, Advocate
For the respondent	:	Shri Munish Kumar, Advocate for Competent Authority
CORAM JUSTICE MANMOHAN SINGH SHRI G.C. MISHRA	: :	CHAIRMAN MEMBER
SHRI B.K. BANSAL	:	MEMBER
JUDGMENT SHRI B.K. BAN	SAL

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This appeal has been preferred under Section 12(4) of the Smugglers & Foreign Exchange Manipulators (Forfeiture of property) Act, 1976 (hereinafter referred to as SAFEMA) against the order dated 30.01.2015 of the Competent Authority.

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The facts leading to the instant appeal are briefly as follows:

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I. An Order of detention F.No. 673/15/2003-CUS.VIII dated 05.05.2003 under the provision of Section 3(3) of the Conservation of Foreign Exchange & Prevention of Smuggling Activities Act, 1974

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FPA-1/DLI/2015

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(COFEPOSA) was passed against Shri Chandra Kumar Jain, son of Shri Mahendra Kumar Jain on account of smuggling of foreign/Indian currency out of the country. This order was duly confirmed on the advice of the Advisory Board vide F.No. 673/15/2003-CUS.VIII dated 20.07.2003 Consequently a show cause notice dated 18.08.2003 under Section 6(1) & 6(2) of SAFEMA was issued to Shri Chandra Kumar Jain (also referred to as AP) and his relatives namely, Smt. Manju Jain (wife), Ms. Nidhi Jain (daughter) and Shri Kapil Jain (son) asking them to explain their sources of investment in the properties detailed below as to how the same had been acquired and as to why the said properties should not be declared as illegally acquired properties and forfeited to the Central Government under the provisions of SAFEMA:

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a. Residential house at 242-C, Pocket-I, Mayur Vihar, Delhi110091 in the name of AP‟s wife Smt. Manju Jain.

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b. Santro car bearing Registration No. DL 7C A 5129 in the name of his son Shri Kapil Jain.

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c. S.B. A/c No. 7538, State Bank of India, Paryavaran Bhawan, CGO Complex, Lodhi Road, New Delhi.

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d. A/c No. 268 in Corporation Bank, CGO Complex, Lodhi Road, New Delhi.

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e. S.B. A/c in State Bank of Saurashtra, Mayur Vihar-I, Delhi.

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f. Fixed Deposits in State Bank of Saurashtra, Mayur Vihar-I, Delhi in the name of Chandra Kumar Jain (AP).

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g. Tax saving bonds in the name of Chandra Kumar Jain (AP).

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h. Safe deposit vault No. 186 in State Bank of Saurashtra, Parparganj, Delhi in the joint names of AP and his wife Smt. Manju Jain.

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i. Locker in State Bank of Saurashtra, Mayur Vihar-I, Delhi in the joint names of AP and his wife Smt. Manju Jain.

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j. Debentures/Share Certificates in the names of AP, his wife Smt. Manju Jain, his son Shri Kapil Jain and daughter Ms. Nidhi Jain.

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While the proceedings under the above said show cause notice were in progress Shri Chandra Kumar Jain expired and he was represented through his legal heirs. The Competent Authority vide order dated 30.01.2015 forfeited the following properties only and dropped the proceedings in respect of others:

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FPA-1/DLI/2015

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I. Residential house at 242-C, Pocket-I, Mayur Vihar, Delhi110091 in the name of Smt. Manju Jain.

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II. Santro car bearing Registration No. DL 7C A 5129 in the name of his son Shri Kapil Jain.

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III. Fixed deposits in State Bank of Saurashtra, Mayur Vihar-I, Delhi in the name of Chandra Kumar Jain.

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IV. Safe deposit vault No. 186 in State Bank of Saurashtra, Patparganj, Delhi in the joint names of AP and his wife Smt. Manju Jain.

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V. Debentures/Share Certificates in the names of A.P., his wife, his son Shri Kapil Jain and daughter Ms. Nidhi Jain.

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Since the documents submitted alongwith the appeal were photocopies only, the appellants were asked to produce the originals. The appellant have submitted the originals of the following documents:

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General Power of Attorney executed by Shri Om Prakash Jain, son of Shri Lakha Ram in favour of Shri Chandra Kumar Jain, son of Shri Mahendra Kumar Jain.

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Agreement to sell and purchase the Flat No. 242-C, Pocket I, Mayur Vihar, Delhi, between Shri Om Prakash, son of Shri Lakha Ram and Smt. Manju Jain, wife of Shri Chandra Kumar Jain.

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Will dated 21.08.1987 of Shri Om Prakash, son of Shri Lakha Ram.

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Receipt dated 21.08.1987 for Rs. 48,000/- executed by Shri Om Prakash, son of Shri Lakha Ram.

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Will dated 27.12.1985 of Smt. Sheela Devi Jain, wife of Shri Mahendra Kumar Jain.

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Gift deed dated 08.08.1987 of Shri Mahendra Kumar Jain

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Gift deed dated 06.08.1987 of Shri Tara Chand Jain.

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Will dated 17.01.1999 of Shri Mahendra Kumar Jain.

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Gift deed dated 04.02.2002 executed by Smt. Bimla Devi Jain.

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Receipts of payment to DDA.

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Income tax return of Shri Kapil Jain- 1997-2003.

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FPA-1/DLI/2015

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Income tax return of Late Shri Chandra Kumar Jain- 19942004.

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Income tax return of Shri Mahendra Kumar Jain, father of Late Shri Chandra Kumar Jain- 1998-2001.

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Income tax return of Ms. Nidhi Jain, daughter of Late Shri Chandra Kumar Jain- 2000-2001.

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However, no original Income tax return and statement of account of Smt. Manju Jain has been submitted.

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We have gone through the records and also heard both the parties. Since there are more than one property involved in this case, it is considered appropriate to record our findings each property wise:

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I. Residential house at 242-C, Pocket-I, Mayur Vihar-I, Delhi110091.

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This property is in the name of Smt. Manju Jain, wife of Shri Chandra Kumar Jain claimed to have been purchased from one Shri Om Prakash, son of Shri Lakha Ram in 1986 for an initial payment of Rs. 48,000/-. Smt. Manju Jain also paid instalments for the house on 08.07.1997 of Rs. 7090/- vide receipt No. 062413 by cash, on 08.07.1997 of Rs. 7089/- vide receipt No. 062414 by cash and on 30.01.1997 of Rs. 10,043/- vide receipt No. 062389 by cash stated to be made out of her business income from M/s Pee Kay Sales (India) in which she was a partner. The document submitted by the appellant before the Competent Authority and also discussed in the order of Competent Authority in respect of this property include a copy of agreement to sell and purchase, a copy of unregistered will executed by Shri Om Prakash in favour of Smt. Manju Jain executed at Delhi on 21.08.1987 and a copy of General Power of Attorney (GPA) executed by Shri Om Prakash in favour of Shri Chandra

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FPA-1/DLI/2015

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Kumar Jain giving the later the right to sell impugned property by the specific clause of the GPA.

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The sources for purchase of this property are explained as under:-

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Rs. 10,000/- received by Smt. Manju Jain from Smt. Sheela Devi Jain who is her mother-in-law by way of a will which was executed in her favour by Smt. Sheela Devi Jain on 27.12.1985

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Rs. 20,000/- received by Smt. Manju Jain from Shri Mahendra Kumar Jain who is her father-in-law on 07.08.1987 by way of a gift deed.

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Rs. 20,000/- received by Smt. Manju Jain from Shri Tara Chand Jain who is her father on 09.08.1987 by way of a gift deed.

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Payments of Rs. 7089/-, 7090/- & Rs. 10,043 to Delhi Development Authority out of her business income from M/s Pee Kay Sales (India) in which she was a partner.

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The Competent Authority has rejected the explanation tendered by the

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appellants before it by recording following findings:-

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“ It is clear from the above that there are contradictions in the

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claim made by the AP during the proceedings qua the above house property. While one document mentions the fact that the property is agreed upon to be purchased by Smt. Manju Jain from Shri Om Prakash (the date of the agreement is not mentioned in the document), the other document mentions that the same property has been the subject matter of a will of Shri Om Prakash in favour of Smt. Manju Jain (the will is executed on 21.08.1987). The third document executed again on the same date i.e. 21.08.1987 mentions that the property has been subjected to „General Power of Attorney‟ between Shri Om Prakash and Shri Chandra Kumar Jain. Now the moot question is: How one and the same property can be subject matter of Sell, Will and GPA at the same time?

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Further, as per Clause 5 of the „agreement to sell & purchase‟ document, there was a need to effect a registered sale deed of the property in due course of time. But, the same has not taken place. Even if the sale deed has been executed, the AP could not produce the same during the course of proceedings in spite of being given specific opportunity to do so. Moreover, as per the photocopy of challans of installment paid to DDA, the name of Shri Om Prakash appears as the owner of property till 1997.

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FPA-1/DLI/2015

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All these materials which have been brought on record create a shadow of doubt over the date of acquisition of the house property by the AP. Moreover, the quantum of consideration paid to acquire the house property also remains unclear. Though the AP has produced a receipt dated 19.08.1987 mentioning thereby that Shri Om Prakash has received Rs. 48,000/- from Smt. Manju Jain on 19.08.1987, it is not clear from the document as to the purpose for which the payment has been made by Smt. Manju Jain to Shri Om Prakash. Moreover, even if it is considered as a part of consideration of the house property i.e. Flat No. 242-C, Pocket-I, Mayur Vihar-I, Delhi- 110091, the shadow of doubt still remains because two days after this purported transaction i.e. 21.08.1987, the house property has been subjected to a will between Shri Om Prakash and Smt. Manju Jain and a GPA between Shri Om Prakash and Shri Chandra Kumar Jain. Though Smt. Manju Jain is the owner of the house property as on today, the date of acquisition and the quantum of consideration paid to acquire the house property i.e. Flat No. 242-C, Pocket-I, Mayur Vihar-I, Delhi- 110091 has not been provided by the AP inspite of availing numerous opportunity to do so. As per Section 8 of SAFEM (FOP) Act, 1976, the burden of proof which lies upon her has not been discharged.

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In the facts and circumstances of the case, the explanation furnished by the AP during the course of proceedings qua the house property i.e. Flat No. 242-C, Pocket-I, Mayur Vihar-I, Delhi- 110091 cannot be accepted as the documents submitted to substantiate the explanation cannot be relied upon in view of the above findings.”

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The appellant has pleaded that this property is owned by Smt. Manju Jain and not by Shri Chandra Kumar Jain who was the affected person; that the property is not even remotely traceable or relatable to the late detenue; that the appellant had clearly shown the sources of funds for acquiring this property; that the learned Competent Authority while passing the impugned order has not questioned sources of funds for acquiring the said property; that there was no material relied upon by the Competent Authority to negate the sources given by the appellant; that the learned Competent Authority forfeited the said property on the mere assumption that the property cannot be subject matter of an agreement to sell, will and GPA at the same time while ignoring the fact that during the relevant time, the properties in Delhi used to be validly transferred by way of agreement to sell, will and GPA.

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The appellant has also contended that the Competent Authority has failed to apply the law as laid down by the Hon‟ble Supreme Court in the

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FPA-1/DLI/2015

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case of Attorney-General for India V/s Amratlal Prajivandas, 1994 AIR 2179, 1994 SCC (5) 54 wherein the Hon‟ble Supreme Court has succinctly dealt with the provisions of the SAFEMA and while laying down the law has held as under:-

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“….44. It is contended by the counsel for the petitioners that extending the provisions of SAFEMA to the relatives, associates and other „holders‟ is again a case of over-reaching or of overbreadth, as it may be calleda case of excessive regulation………….

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…..The idea is to reach his properties in whosoever‟s name they are kept or by whosoever they are held. The independent properties of relatives and friends, which are not traceable to the convict/detenue, are not sought to be forfeited nor are they within the purview of SAFEMA [That this was the object of the Act is evident from para 4 of the preamble which states: “And whereas such persons have in many cases been holding the properties acquired by them through such gains in the names of their relatives, associates and confidants.” We are not saying that the preamble can be utilized for restricting the scope of the Act, we are only referring to it to ascertain the object of the enactment and to reassure ourselves that the construction placed by us accords with the said subject.]……

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……The idea is not to forfeit the independent properties of such relatives or associates which they may have acquired illegally but only to reach properties of the convict/detenue or properties traceable to him, wherever they are, ignoring all the transactions with respect to those properties….

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……We do not think that Parliament ever intended to say that the properties of all the relatives and associates, may be illegally acquired, will be forfeited just because they happen to be the relatives or associates of the convict/detenue. There ought to be the connecting link between those properties and the convict/detenue, the burden of disproving which, as mentioned above, is upon the relative/associate. In this view of the matter, the apprehension and contention of the petitioners in this behalf must be held to be based upon a mistaken premise…..”

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The respondent in their reply have mainly reiterated the findings of

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the Competent Authority and stated that the documentary evidences i.e. agreement to sell and purchase, will executed by Shri Om Prakash and GPA filed by the appellant appeared to be suspicious in nature due to following reasons:-

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i. The documents i.e. agreement to sell and purchase does not have any date of agreement as and when the same was executed.

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ii. The „Will‟ filed by the appellants was unregistered and executed by Shri Om Prakash in favour of Smt. Manju Jain on 21.08.1987 where by the testator mentions that Smt.

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Manju Jain will be the sole owner of the property i.e. Flat No. 242-C, Pocket-I, Mayur Vihar-I Delhi after the death of testator (Shri Om Prakash).

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iii. That GPA filed by the appellants was executed by Shri Om Prakash in favour of Shri C.K. Jain giving the right to sell the property in question vide specific clause of the said GPA.

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iv. That it is not known as to how one and same property can be subject matter of agreement to sell, Will and GPA at the same time.

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v. The genuineness of the Will is suspect because there is nothing on record to prove that the signature of the Will pertains to Shri Mahinder Kumar Jain.

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vi. The witnesses are close relatives i.e. A.P.

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vii. The AP could not adduce any other proof such as production of witnesses to the Will for cross examination.

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viii. The receipt dated 19.08.1987 mentioning thereby that Shri Om Prakash has received Rs. 48,000/- from Smt. Manju Jain on 19.08.1987 does not show the purpose for which the payment has been made. Moreover, even if it is considered as a part consideration of the house property in question, the shadow of doubt still remains because two days after this purported transaction i.e. 21.08.1987, the house property has been subjected to a will and between Shri Om Prakash and Smt. Manju Jain and a GPA between Shri Om Prakash and Shri Chandra Kumar Jain.

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Going by the scheme of the SAFEMA, a notice of forfeiture is required to be issued under Section 6 to the affected person to indicate the sources of his income, earnings or assets, out of which or by means of which he has acquired the property and the evidence on which he relies and other relevant information and particulars and to show cause why all or any of such properties as the case may be should not be declared to be illegally acquired properties and forfeited to the Central Government. Further under Section 7 of SAFEMA, the Competent Authority may after considering the explanation, if any, to the show cause notice issued under Section 6, and the materials available before it and after giving to the person affected a reasonable opportunity of being heard, by order, record a finding whether all or any of the property in question are illegally acquired properties and the properties found to be illegally acquired shall be forfeited to the Central Government. As per these provisions of SAFEMA, what is essentially required is to look into the sources of FPA-1/DLI/2015 Page 8 of 20

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income, earnings or assets out of which or by means of which a property has been acquired by the affected person for arriving at a finding whether the property is illegally acquired or not. In the instant case, the main findings of the Competent Authority with respect to the immoveable property in question are that multiple documentary evidence in the form of agreement to sell and purchase, will executed by Shri Om Prakash and GPA in the favour of the appellant itself has created a suspicion as to how there could be more than one instruments for transfer of the same property. Besides certain lacunae in the above said documents have also been pointed out to reject their evidentiary value as well as the sources for funding the purchase of the said property. In this regard, we find that there is no bar for creating more than one instrument for transfer of the same property for transfer from one person to the another person. It is a known fact that during the relevant period it was an established practice to transfer properties through agreement to sell, and/ or will and/ or GPA. Multiple documents for the same transaction could be validly executed unless they are contradictory to each other. In this case, an agreement to sell and purchase was created which was supplemented by a will by the seller in favour of the buyer as well as a General Power of Attorney in the favour of the husband of the buyer. Such an arrangement can at the best be said to be a matter of over-precaution rather than an illegal or suspicious transaction. As far as the sources of purchase of the property are concerned Smt. Manju Jain has explained it in detail which explanation has not attracted any denial or contradiction by any of the persons concerned. Even the Competent Authority has not given any adverse findings on the sources of funding. As regards the amount of the transaction, it is mentioned in Clause 1 of the agreement as under:

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“1. That the entire consideration amount of the said flat with the lease hold rights of the land under the said flat is fixed between the parties at Rs. 48,000/- plus balance cost and other dues, out of which the first party had received Rs. 48,000/- from the second party, under FPA-1/DLI/2015 Page 9 of 20

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legal separate receipt, in presence of the Sub-Registrar, Delhi, at the time of registration of this receipt of the said amount and the balance cost and other dues shall be paid by the second party to the D.D.A. New Delhi, in the name of the first party.”

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This clause speaks of a separate receipt for the said amount of Rs. 48,000/- in the presence of Sub-Registrar, Delhi. Thus, the cash receipt issued by Shri Om Prakash for the same amount of Rs. 48,000/- in the presence of Sub-Registrar, Delhi on 21.08.1987 can be logically relatable to the agreement unless something to the contrary is shown by the Competent Authority. As regards the date of the agreement, no doubt there is no date mentioned in the body of the agreement, but it is seen from the back side of the Stamp Paper on which the agreement is written that the Stamp Paper was sold to Shri Om Prakash, son of Shri Lakha Ram on 18.08.1987 and the agreement has been notorised on 21.08.1987. The date of notorisation can thus be taken as an evidence of the date of agreement and it can be concluded that the agreement was executed on 21.08.1987 as claimed by the appellant. In so far as the (non-registration of the agreement as per Clause 5 of the agreement is concerned, such non-registration does not negate the agreement itself and does not affect adversely the evidentiary value of the same. In so far as the will executed by Shri Om Prakash in favour of Smt. Manju Jain on 21.08.1987 is concerned, the Competent Authority has not cited any legal provision under which a will has to be compulsorily registered. We understand that there is no requirement under law that a will has to be compulsorily registered. The unregistered will has equal force and is acceptable as an evidence. The witnesses being close relatives of the affected person does not negate the effect of the evidentiary value of the will.

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From the above the following picture emerges:

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There is no denial of the fact that the impugned property was owned by Smt. Manju Jain wife of the affected person.

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The property was purchased in 1987 for which the payments of Rs. 48,000/- was made in 1987 and the remaining payment to DDA was made in 1997.

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Even though the multiple instruments were created for covering the same transaction, but they have not contradicted each other nor do they negate the fact of purchase of property by Smt. Manju Jain.

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Sources of funding explained by Smt. Manju Jain have not been contradicted by the Competent Authority.

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From the above it is clear that the property was owned by Smt. Manju Jain who is wife of the affected person. Although properties of the relatives of the affected person can be forfeited under SAFEMA, but as per the judgment of the Hon‟ble Supreme Court in the case of AttorneyGeneral for India V/s Amratlal Prajivandas & Ors. the independent properties of the relatives which they may have acquired illegally cannot

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be forfeited. The Hon‟ble Supreme Court held that:-

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“50…………. We do not think that the Parliament intended to say that the properties of all the relatives and associates may be illegally acquired, will be forfeited just because they happen to be the relatives or associates of the convict/detenue. There ought to be the connecting link between those properties and the convict/detenue, the burden of disproving which as mentioned above, is upon the relative/associate .”

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In the instant case, this connecting link or nexus between the impugned property and the affected person has been missing and as per the explanation and evidence of sources of fund for the purchase of this property as produced by the appellant it can be concluded that the said property is an independent property of Smt. Manju Jain and would thus not attract forfeiture under SAFEMA.

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II. Santro car bearing Registration No. DL 7C A 5129 in the name of his son Shri Kapil Jain.

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It is an admitted fact that this car was purchased by Shri Kapil Jain on 23.06.2000 for a sum of Rs. 3,90,000/- from Kotak Mahindra Bank for his business activities. The monthly instalment for the car was Rs. 8,450/. Shri Kapil Jain is stated to be in the business of trading and fabrication, which he acquired from his grandfather Shri Mahendra Kumar Jain by way of a will executed on 17.01.1999. The income tax returns from the assessment years from 1997-98 to 2003-04 have shown an income starting from Rs. 40,800/- in the year 1997-98 to Rs. 1,54,900/- in the year 200304 as per the details below:-

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S.No.	Assessement Year	Income (Rs.)
1	1997-1998	40,800
2	1998-1999	52,762
3	1999-2000	61,480
4	2000-2001	65,390
5	2001-2002	78,500
6	2002-2003	1,04,790
7	2003-2004	1,54,900

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The Competent Authority has forfeited this car on the following grounds:

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That the income of Shri Kapil Jain during assessment years from 2001-02 to 2003-04 was hardly adequate to meet out the yearly installment requirement of Rs. 10,1,400/- towards the car.

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That there was close proximity between acquisition of the car and the detention of Shri Chandra Kumar Jain as the car was purchased in the year 2000 and Shri Chandra Kumar Jain was detained in the year 2003 and hence there was strong nexus between the property and the ill-gotten income of the affected person from smuggling.

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In this regard, we find that even though there is close proximity in

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terms of time between the purchase of the car and the detention of the affected person but that itself is not sufficient to conclude that there is a

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nexus between this property and the ill-gotten income of the affected person. What is essential for establishing such a nexus is that the property must have been acquired out of the ill-gotten income of the affected person. In this case, the car has been purchased by Shri Kapil Jain from a financial institution, namely Kotak Mahindra Bank on monthly installment basis for which payments have also been made through banking channel and also duly reflected in the income tax returns of Shri Kapil Jain. Therefore, it is difficult to believe that the car has been purchased out of the ill-gotten income of the affected person. The inadequacy of income of Shri Kapil Jain during the particular year to meet the yearly installment requirements towards the car is no yardstick to conclude that the car has been purchased out of ill-gotten money of the affected person. In any case, the income of Shri Kapil Jain during the year 2003-04 (Rs. 1,54,900/-) when his father was detained for smuggling activities was much higher than the annual instalments of Rs. 1,01,400/- towards the car. Thus, the arguments and the findings of the Competent Authority in respect of this property do not hold ground and the property is held to be not liable for forfeiture.

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III. Fixed deposits in State Bank of Saurashtra, Mayur Vihar-I, Delhi in the name of Chandra Kumar Jain.

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This property consists of fixed deposit of Rs. 4,00, 000/- in the name of late Shri Chandra Kumar Jain. The source has been explained to be Rs. 4,00, 000/- given to Shri Late Chandra Kumar Jain by his son Shri Kapil Jain on 12.11.2002 through his bank account out of his profit from business which was reflected in the income tax return of Shri Kapil Jain. The Competent Authority has rejected the explanation given by the appellant on the ground that Smt. Manju Jain was asked to submit original passbook of bank account 7683 for examination but she failed to do so. Further, the copy of the passbook submitted before the Competent FPA-1/DLI/2015 Page 13 of 20

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Authority was not legible. The appellant have submitted that they had explained to learned Competent Authority that the photocopy of the passbook submitted before the Competent Authority had been procured by them from records of CBI and the original passbook was not available with them. They have also submitted that the learned Competent Authority has given no findings as to whether the said property was illegally acquired or not and the impugned order was passed without application of mind.

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We find that this amount of Rs. 4,00, 000/- is stated to have been transferred by Shri Kapil Jain through cheque in favour of Shri Chandra Kumar Jain on 12.11.2002, however, looking at the annual income of Shri Kamal Jain as detailed in the foregoing paragraphs (while dealing with property at S.No. 2 i.e. Santro car) it is noticed that the total income of Shri Kapil Jain from the assessment years 1997-98 to 2003-04 comes to Rs. 5,59,622/- out of which Rs. 1,54,900/- were earned during the assessment year 2003-04 (previous year 2003-03). Thus it seems to be unbelievable that out of such a meager income Shri Kapil Jain could have paid towards the purchase of car as well as given a cheque of Rs. 4,00,000/- to his father out of his own income after making the payment for yearly instalments for the Santro car purchased by him on 23.06.2000. Thus, this transaction does not seem to be a genuine one and the source of this sum of Rs. 4,00,000/- needed further explanation and evidence which the appellant have failed to tender. We also find that there is also a very close proximity between the time of this transaction and the smuggling activities of Shri Chandra Kumar Jain for which he was detained. Therefore, in the absence of any evidence to be contrary, it is safely concluded that this property was acquired through ill-gotten money of Shri Chandra Kumar Jain and is rightly confirmed for forfeiture.

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IV. Safe deposit vault No. 186 in State Bank of Saurashtra, Patparganj, Delhi in the joint names of AP and his wife Smt. Manju Jain.

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This safe deposit vault in the joint names of C.K. Jain and Smt. Manju Jain contained the following items which have been forfeited:-

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a. Cash amount of Rs. 4,90,000/- (four lakh ninety thousand only).

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b. Gold jewellery (detailed below)

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S.No.	Item.	Weight
1	One Chain	5.5 Grams
2	One Chain	6.4Grams
3	One Chain	6.5 Grams
4	One Chain	5.5 Grams
5	One Chain	6.5 Grams
6	2 Chains	6 Grams each i.e. 12 Gramsapproximately
7	One Chain	6.3 Grams
8	Two gold pieces with disfigured Swastik Mark	50 Grams each i.e. 100 Grams approximately
9	Two gold coins with imprint of Elizabeth IICanadian50Dollars	30 Grams approximately (both)
10	One pendentwith fineness 999.9	20 Grams

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Findings/discussions in respect of both the above items are as under:-

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(A) Cash amount of Rs. 4,90,000/-

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This cash amount has been stated to be owned by Smt. Manju Jain. The sources were explained as under:-

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Rs. 70,000/- received by Smt. Manju Jain by way of a gift from her mother Smt. Bimla Devi Jain on 04.02.2002.

¶138

Rs. 1,75,000/- received by Smt. Manju Jain from M/s Pee Kay Sales (India) by way of dissolution of partnership on 31.08.2002.

¶139

Rs. 2,45,000/- as business income of Smt. Manju Jain from M/s Pee Kay Sales (India) lying with Smt. Manju Jain as cash in hand.

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FPA-1/DLI/2015

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The Competent Authority has forfeited the said amount of Rs. 4,90,000/by rejecting the explanation given by Smt. Manju Jain on the following grounds:-

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Smt. Manju Jain could not produce any satisfactory reply or documentary evidence to establish genuineness/credit worthiness of Smt. Bimla Devi Jain i.e. her mother since there were few cash and clearing entries preceeding the withdrawal entry of Rs. 75,000/-.

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Smt. Manju Jain could not explain the necessity of keeping such a huge amount cash in hand keeping in view the size of her business.

¶145

She could not produce the Chartered Accountant who audited the balance sheet of M/s Pee Kay Sales (India) for examining on oath.

¶146

As per the retirement deed of M/s Pee Kay Sales (India) no amount has been received by Smt. Manju Jain on dissolution of the firm.

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In this regard, we find that there is no valid reason for not accepting the gift deed executed by Smt. Bimla Devi Jain mother of Smt. Manju Jain for a gift of Rs. 70,000/- in favour of Smt. Manju Jain particularly when the amount has been paid out of withdrawal of Rs. 75,000/- by Smt. Bimla Devi Jain from her saving bank account No. 1436. No doubt there are entries of cash deposit of Rs. 10,000/- on 21.01.2002 and Rs. 5,000/- on 23.01.2002 before the withdrawal of Rs. 75,000/- on 31.01.2002 but that itself cannot cast doubt about the genuineness of this withdrawal as well as the gift to Smt. Manju Jain as also the credit worthiness of Smt. Bimla Devi Jain. Therefore, the explanation in respect to Rs. 70,000/- stated to be received by Smt. Manju Jain by way of gift from her mother Smt. Bimla Devi Jain on 04.02.2002 is acceptable.

¶148

As regards the cash in hand of Rs. 2,45,000/- out of business income of Smt. Manju Jain form M/s Pee Kay Sales (India) Ltd., it is

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FPA-1/DLI/2015

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noticed that this amount is reflected in the photocopy of the statement of account of Smt. Manju Jain annexed with her income tax return for the assessment year 2002-03. However, the original of this Income Tax Return has not been produced. Therefore, this explanation in respect of this amount cannot be accepted to be supported by valid documentary evidence.

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As regards the receipt of Rs. 1,75,000/- by Smt. Manju Jain from M/s Pee Kay Sales (India) on account of dissolution of partnership firm on 31.08.2002, it is noticed from the copy of the Retirement deed dated 31^st August, 2002 that no money except the balance on capital account, if any, standing in the firm on the part of Smt. Manju Jain was payable to her. It is further noticed from the photocopy of the personal statement affairs of Smt. Manju Jain as on 31.03.2002 that her share in the firm is valued at Rs. 1,70,971.06 which has been reduced to zero in her personal statement of affairs as on 31.03.2003. However, the original documents have not been produced. Therefore, the explanation tended by the appellant in respect of this amount also cannot be accepted to be supported by valid documentary evidence. In view of the above we hold that out of the sum of Rs. 4,90,000/- recovered from the safe deposit vault only Rs. 70,000/- is not illegally acquired property of the affected person and is not liable for forfeiture and rest of the amount i.e. Rs. 4,20,000/- is liable for forfeiture.

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B. Gold Jewellery

¶154

With regard to the jewellery it was claimed by Smt. Manju Jain that 10 tolas of jewellery belonged to Ms. Nidhi Jain which was given to her by way of a gift executed by Smt. Sheela Devi Jain, mother of Shri Chandra Kumar Jain on 27.10.1985, and

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FPA-1/DLI/2015

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25 tolas belonged to Smt. Manju Jain which was received by her on

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her marriage.

¶159

The photocopy of a unregistered gift deed executed on 27.12.1985 by Smt. Sheela Devi Jain was produced before the Competent Authority. However, the same was not accepted by the Competent Authority on the ground that she had failed to produce any document to authenticate the signature of Smt. Sheela Devi Jain or any of the witnesses who could prove the genuineness of the gift deed and that the witnesses in the gift deed were close relatives of the affected person. Likewise in respect of the 25 tolas of jewellery claimed by Smt. Manju Jain to have been received at the time of her marriage, the Competent Authority rejected her explanation on the ground that she could not produce any documentary evidence in this regard.

¶160

It is seen from the copy of the will dated 27.12.1985 of Smt. Sheela Devi Jain, wife of Shri Mahendra Kumar Jain that she has given 10 tolas of jewellery to her granddaughter (Ms. Nidhi Jain). Since Smt. Sheela Devi Jain was no more, the question of authentication of her signatures or the authenticity of this document could not be a matter of doubt unless something to the contrary is available on record. This document could not be rejected simply because the signatures of the Smt. Sheela Devi Jain could not be authenticated/verified (she was stated to have been no more even during the proceedings before the Competent Authority), or because of the fact that witnesses were close relatives of the affected person. As regards the 25 tolas of gold jewellery is claimed by Smt. Manju Jain to have been received at the time of her marriage as gifts from parents or Inlaws, keeping in view the Indian customs, receipt of jewellery by the daughter at the time of her marriage is a centuries old practice and jewellery passes on from mother to the daughter without keeping any documentary record of the same. The quantity of 25 tolas is also not so

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FPA-1/DLI/2015

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huge as to categorise it unbelievable or beyond the means of an Indian family. Therefore, the sources of the jewellery recovered from the safe vault seem to be genuine and acceptable.

¶164

V. Debentures/Share Certificates in the names of A.P., his wife, his son Shri Kapil Jain and daughter Ms. Nidhi Jain.

¶165

The Debentures/share certificates are stated to be in the names of Shri Chandra Kumar Jain, his wife Smt. Manju Jain, his son Shri Kapil Jain and daughter Ms. Nidhi Jain. The sources for the same has been explained to be personal income of Ms. Nidhi Jain during the years 200001 to 2003-04 and by way of will of Shri Mahendra Kumar Jain (father of Shri Chandra Kumar Jain) dated 17.01.1999. The said will was not accepted by Competent Authority as an evidence on the grounds that the same was not registered, the witnesses were close relatives of the affected person, because there is nothing on record to prove that the signature on the will pertains to Shri Mahendra Kumar Jain and the witnesses could not be produced for cross examination.

¶166

We have perused the copy of the said will of Shri Mahendra Kumar Jain. While this will mentions about gold jewellery, gold and silver utensils, silver coins, cash and the business establishment of Shri Mahendra Kumar Jain but there is no reference to any debentures/share certificates. Therefore, even if this will is considered as a piece of evidence, still it does not support the contention of the appellant that the debentures/share certificates were transferred by Shri Mahendra kumar Jain, to his grandson Shri Kapil Jain by way of this will. As regards the debentures/shares in the name of Ms. Nidhi Jain, no explanation/documents regarding the date of purchase, the names of the companies etc have been furnished so as to link it with her own income. Therefore, the explanation tended in this regard is not acceptable and the

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FPA-1/DLI/2015

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Competent Authority has rightly held it to be illegally acquired property

¶170

and rightly forfeited the same.

¶171

In view of the above discussions and findings the appeal is allowed

¶172

in part and it is ordered that the forfeiture of the following properties is

¶173

set aside:

¶174

I. Residential house at 242-C, Pocket-I, Mayur Vihar, Delhi110091 in the name of AP‟s wife Smt. Manju Jain.

¶175

II. Santro car bearing Registration No. DL 7C A 5129 in the name of his son Shri Kapil Jain.

¶176

III. Rs. 70,000/- out of Rs. 4,90,000/- and the jewellery recovered from Safe deposit vault No. 186 in State Bank of Saurashtra, Patparganj, Delhi in the joint names of AP and his wife Smt. Manju Jain.

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AND

¶178

The forfeiture in respect of the following properties is upheld:-

¶179

i. Fixed deposits in State Bank of Saurashtra, Mayur Vihar-I, Delhi in the name of Chandra Kumar Jain.

¶180

ii. Debentures/Share Certificates in the names of A.P., his wife, his son Shri Kapil Jain and daughter Ms. Nidhi Jain.

¶181

iii. Rs. 4,20,000/- out of Rs. 4,90,000/- recovered from safe deposit vault No. 186 in State Bank of Saurashtra, Delhi in the joint names of AP and his wife Smt. Manju Jain.

¶182

The appeal is accordingly partly allowed and disposed of in the terms

¶183

above.

¶184

(Justice Manmohan Singh) Chairman

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(G.C. Mishra) Member

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(B.K. Bansal) Member

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New Delhi,