Dismissed

FPA-12/BOM/2005 of Hasina Ibrahim Parkar Through her legal heirs v. The Competent Authority, Mumbai & Ors.

ATFP24 Apr 2024FPA-12/BOM/2005

Case brief

AI extract

What is this about?

An appeal against the competency order forfeiting properties alleged to have been acquired by Dawood Ibrahim Sheikh. The appellant argued she was merely a tenant. The bench dismissed the appeal, confirming the forfeiture based on the Income Tax assessment of unexplained investments. Concerns were raised about the authenticity of rent receipts produced at the final stage.

What did the court decide?

Contention of non-ownership rejected; impugned order of forfeiture confirmed and appeal dismissed.

FPA-12/BOM/2005 of Hasina Ibrahim Parkar Through her legal heirs… — Cheque Dishonour | ATFP (2024)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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MP-05/BOM/2024 (A.D.) MP-232/BOM/2018 (Misc.) MP-195/BOM/2018 (Misc.) MP-55/BOM/2014 (Add. Grds.) FPA-12/BOM/2005

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Hasina Ibrahim Parkar Through her legal heirs

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… Appellants Versus

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The Competent Authority, Mumbai &Ors.

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… Respondents

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Advocates/Authorized Representatives who appeared

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For the Appellants : Shri Bahar U. Barqi, Adv.

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For the Respondent : Shri R.S. Dakha, Ms.Shivani, Advs.

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CORAM:

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JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI BALESH KUMAR : MEMBER

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FINAL ORDER 24.04.2024

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FPA-12/BOM/2005

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By this appeal, a challenge is made to the order dated 29.03.2005 passed by the Competent Authority, SAFEMA, Mumbai. The order was passed after issuance of a show cause notice under Section 6(1) of Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (for short `the Act of 1976). Notices were issued to Dawood Ibrahim Sheikh and Hasina Ibrahim Parkar. The Competent Authority thereafter passed a detailed order to forfeit following properties:

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“1. Premises at 3^rd Floor and terrace, Ismail Building, 3^rd floor, Peeerkhan Street, Nagpada,Mumbai-400 008 with all interests of the appellant Hasina Ibrahim Parkar in the property, movable or immovable;

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FPA-12/BOM/2005

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Page 1 of 13

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Garib Nawaz Guest House running at 3^rd Floor and terrace with the same address”.

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The Competent Authority made detailed discussions for passing the order which was after hearing the appellant Hasina IbrahimParkar. It was alleged that the property in question was acquired out of the illegal earning by Dawood Ibrahim Sheikh. The appellant, however, submitted that the property in question is a rented premises in her hands thus not liable to be forfeited. The specific statement was made about the ownership of the property to be of K.MPardawala. However, the argument of the appellant was not accepted and, therefore, the order of the forfeiture of the property was passed.

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The appellant Hasina Ibrahim Parkardied during the pendency of the appeal and after a long period, an application to bring her legal heirs on record was filed. It was an incomplete application as all the legal heirs were not brought on record. However, significant time has expired thereupon and the application remained pending. In absence of all the legal heirs of the appellant Hasina Ibrahim Parker on record, the application is liable to be dismissed. The appeal could have been dismissed on that ground but we would pass order even on merit on the appeal which remained pending for many years even after the application.

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The learned counsel for the appellant submitted that the property in question does not belong to the appellants, rather it is of K.MPardawala, thus could not have been forfeited. Appellant is a

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FPA-12/BOM/2005

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Page 2 of 13

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tenant in the premises and to prove the facts aforesaid, certain rent receipts were produced even on the date of hearing of the appeal and would be considered during the course of the arguments.

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The learned counsel for the appellant further submitted that no material could be produced by the respondents to show that illegally acquired earning of Dawood Ibrahim was used to acquire the properties which came to late Hasina Ibrahim Parkar. In absence of any material, the impugned order remains only on inferences. It is more so when the appellant had even submitted the rent receipts to show ownership of the property of K.M.Pardawala and not of the appellant. In view of the aforesaid, the submission was made to set aside the order because assessment order byIncome Tax Department to showinvestment to the extent of Rs.80 lakhs in the property could not have been taken into consideration. The Guest House was run in the building without the investment thus, finding recorded by the Competent Authority deserves to be set aside.

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The appeal has been seriously contested by the respondents. It is submitted that a showcause notice was issued to Dawood Ibrahim Sheikh and Hasina IbrahimParkarunder Section 6(1) of the Act of 1976. No reply to the show cause notice was filed by the affected persons within 35 days from the date of service. Accordingly, personal hearing was given to them on 16.03.2005. Smt. Parvez M. Rustam Khan, Advocate, appeared on behalf of deceased appellant and stated as under:

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FPA-12/BOM/2005

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Page 3 of 13

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“(i) that since 1990-91, AP-2 is a tenant of Mr. K.M. Pardawala, who is the owner of the building and she was paying a monthly rent of Rs.1,399/- for the northern room and Rs.1607/- for the southern room.

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(ii) that AP-2 carried on business of a guest house in the name and style of Garib Nawaz Guest House of Ismail Building.

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(iii) that she is a widow since 1992 and has four children in support.

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(iv) that AP-2 has not acquired the third floor premises but she was merely a monthly tenant of the same and hence, she is not the owner of the premises and that she has only tenancy rights in the premises.

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(v) that the tenancy rights in respect of the property cannot be declared to be illegally acquired property nor can be forfeited to the Central Government”.

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The deceased appellant did not claimtitle over the property, rather shown it to be on rent and thus she should not have been aggrieved by the forfeiture of the property as her right would not be affected even on forfeiture if title lies with other persons as per the statement of the appellant. The fact, however, is that the income tax assessment returns have been used by the Competent Authority to find out the ownership of the property. The estimated investment of Rs.80 lakhs was made on the property out of illegal earning.

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It is submitted that if the appellants are not the owners or they are not holder of the property, then there remains no reason to challenge the forfeiture. The appellant can be evicted by the means provided under the law. The fact, however, is that the property was acquired by using illegal earning of Dawood Ibrahim. The fact aforesaid stands proved by the conduct of the party itself. If the ownership of the property would have been of someone else, he would have definitely challenged the order but till date no such

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FPA-12/BOM/2005

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Page 4 of 13

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challenge has been made by so-called title holder K.M. Pardawala and his legal heirs. Who has challenged the order is allegedly to be the tenant of the property. The fact remains that the deceased appellant not only acquired the property but subsequently constructed three rooms on the terrace in the year 1990 and was running a Guest House thereupon in the name and style of Garib Nawaz Guest House.

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The investment in the property was estimated to be of Rs.80 lakhs by the Income-tax Department. Specific allegation that huge investment was made on the property in question and was referred in the show cause notice but no explanation was offered by the deceased appellant before the Competent Authority. In absence of a denial to the specific fact narrated in the show cause notice, presumption can be drawn about its acceptance.

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The appellant even failed to disclose the source of Rs.80 lakhs invested on the property. It is more so when Income-tax Department had made assessment. The order of assessment was passed on 18.12.1996 under Section 144 of the Income Tax Act for the Assessment Year 1990-1991. The assessing authority under the Income Tax Act recorded a finding that one Shri Siraz IsmailMithaiwala stated that the building was purchased by his father about fifty years back and the third floor was occupied by his brother-in-law, Shri TahirShamsuddin Mala, who transferred the third floor to Dawood Ibrahim somewhere in the year 1990. The

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FPA-12/BOM/2005

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Page 5 of 13

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terrace of the building was occupied and huge amount was invested without showing the sources.

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Further, the printed receipts on the letter head of Smt. Khatizabai Ismail Mithaiwala showing the monthly rent of Rs.105/were found from the deceased appellant. It was then observed that Dawood Ibrahim took possession of the property somewhere in the year 1990 and thereafter investment was made after acquisition of the said property and has been considered in the hands of the assessee and added in the total income to the tune of Rs.80 lakhs. It was thus submitted that the impugned order has rightly been passed to forfeit the property and for that noticeeDawood Ibrahim did not submit any response.

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Investigation conducted by the Investigating Agencies shows that one Shaikh Ibrahim Kaskar, father of Dawood IbrahimKaskar had married Aminabi and they had seven sons and five daughters. Shaikh Ibrahim Kaskarwas a constable in the Bombay Police and sought voluntary retirement in the year 1957. After retirement, he was receiving a very meagre amount of pension. The appellant was a daughter and could not show her lawful source to invest heavy amount of Rs.80 lakhs. By that time Dawood Ibrahim got involved in illegal activities and his earning was used to acquire the property and thereby holding of many properties was to be illegal, the order for its forfeiture was passed.

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The learned counsel for the respondents has argued the case even in reference to the rent receipts produced by the appellant‟s son FPA-12/BOM/2005 Page 6 of 13

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Page 6 of 13

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said to be the legal heir along with others not on record. The signature on the rent receipts varies and many receiptsare even unsigned. It seems to be nothing but a document fabricated by the legal heir and thus an oral prayer was made to send it for investigation after registration of a criminal case and if it is found that the appellant has committed forgery, appropriate proceeding be directed. Otherwise, the platform of the Tribunal is used to make incorrect and false statement of facts.

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It is further submitted that if K.MPardawala is said to be the owner of the property, the Municipal record or any other record to establish his ownership could have been filed and otherwise if it is a property owned by K.M.Pardawala, then he would have come forward to challenge the order of forfeiture but no such effort was made. It would be sufficient to prove that the property forfeited by the respondents belongs to the appellant and not to K.M.Pardawala and accordingly prayer is to dismiss the appeal.

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We have considered the rival submissions and scanned the matter carefully.

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The deceased appellant along with Dawood Ibrahim Sheikh were caused a show cause notice under Section 6 (1) of the Act of 1976 for forfeiture of the property referred in this case. The forfeiture of the property was pursuant to the order of detention of Dawood Ibrahim Sheikh under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (for short `the Act of 1974) by the State of Maharashtra. The detention order FPA-12/BOM/2005 Page 7 of 13

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Page 7 of 13

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was issued on 13.10.1992 which was neither revoked by the Government nor quashed or set aside by the court of Competent Jurisdiction. Dawood Ibrahim Sheikh was taken to be an affected person under Section 2(2)(b) of the Act of 1976 while deceased appellant was considered to be an affected person being sister of Dawood Ibrahim Sheikh.

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No reply to the show cause notice was filed by the affected persons within the stipulated period. However, in response to the show cause notice, Smt. Parvez M. Rustam Khan, Advocate, appeared for the deceased appellant and filed written submissions. It was stated that the deceased appellant is only the tenant in the property owned by K.M. Pardawala and paying the rent of Rs.1899/for northern room and Rs.1607/- for southern room. The deceased appellant was running the Guest House in the property under seizure. She has not acquired the property. In view of aforesaid, the main contention of the deceased appellant was that the property in question is a rented property thus not liable for forfeiture. The ownership of the property was thus denied from the beginning, rather the deceased appellant claims herself to be the tenant in the property.

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The Competent Authority, however, noted that Dawood Ibrahim Sheikh was involved in criminal and smuggling activities and had criminal record of highest order. The investigation conducted by the agencies shows that the property in question was one of the property acquired at the instance of Dawood Ibrahim Sheikh. In fact, many

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FPA-12/BOM/2005

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Page 8 of 13

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other properties were also proposed for forfeiture and were forfeited by the Adjudication Orders dated 14.07.1998 and 29.08.1999 in which 12 properties acquired by Dawood Ibrahim Sheikh in the name of his relatives were forfeited to the Central Government under the Act of 1976. Dawood Ibrahim Sheikh and his deceased sister were not having known sources of income thus huge amount invested by them was attributable to the smuggling activities of Dawood Ibrahim Sheikh. The impugned order of forfeiture of the property was passed even after taking note of the investment of Rs.80 lakhs on construction to run the Guest House. The value of investment in the property was estimated by Income-Tax Department and assessment order for it was also passed. Taking into consideration the huge investment of Rs.80 lakhs, it was taken to be out of the earning of Dawood Ibrahim Sheikh from his criminal activities, otherwise deceased appellant failed to disclose any source to invest Rs.80 lakhs. The material placed before the authority was taken to be sufficient for passing the order of forfeiture of the property.

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The case taken up by the appellant is that the forfeiture of the property is without consideration of the fact that the deceased appellant is only a tenant thus could not have been subjected to forfeiture. The owner of the property was K.M. Pardawala. Otherwise, the assessment order dated 18.12.1996 under Section 144 of the Income Tax Act for the assessment year 1990-91 in respect of Dawood Ibrahim Sheikh could not have been used to draw

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FPA-12/BOM/2005

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Page 9 of 13

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inferences about the ownership of the property of the deceased appellant and that too acquired out of the earning of Dawood Ibrahim Sheikh out of his criminal activities.

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We have considered the aforesaid submissions and to appreciate the arguments, it would be relevant to refer the assessment order dated 18.12.1996 under the Income Tax Act for the assessment year 1990-91. The order gives complete background of the property as to how it was acquired by the assessee. The relevant para is quoted hereunder for ready reference:

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“One Shri Siraz Ismail Mithaiwalla, son of Shri Ismail Abdulla Hussein Mithaiwalla stated that this building was purchased by his father about fifty years back and the third floor was occupied by his brother-in-law. Shri Tahir Shamsuddin Mala, who sometime in the year 1990 transferred this floor to said Mrs. Hasina Ibrahim Parkar (sister of Shri Dawood Ibrahim Kaskar) who is running GaribNiwaz Guest House in it. She also occupied terrace of the building and has further constructed three rooms on the terrace. He further stated that this transfer has taken place without any permission either of his brother-in-law or of the owner of any of his relative. No details about the transaction between his brother-in-law and Mrs. Hasina Parkar were available with him. Further, the printed receipts on the letter head of Smt. Khatizabai Ismail Mithaiwalla, showing the monthly rent of Rs.105/- from Smt. Hasina Ibrahim Parkar are available. An application dated 22.7.1992 by Smt. Hasina IbrahimParkar, addressed to the Ward Officer, `E‟ Ward, Municipal Office, Byculla for issuing of Municipal license to start the said guest house is available on record.

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From the foregoing facts, it is clear that Shri Dawood Ibrahim Kaskar took possession of the said property sometime in 1990. Therefore, investment in the acquisition of the said property is being considered in the hands of the assessee in this assessment year. In the absence of any details, investment in the said property is estimated at Rs.80,00,000/-. The same is added to the total income of the assesse u/s 69 of the I.T. Act, 1961”.

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FPA-12/BOM/2005

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Page 10 of 13

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The assessment order reflects as to how the property was occupied by Dawood Ibrahim Sheikh and thereupon huge amount was invested on it. They could not disclose the sources to invest huge amount of Rs.80 lakhs and in absence of which the Income Tax Department added entire investment in the hands of Dawood Ibrahim Sheikh and accordingly seizure of the property was ordered.

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The appellant has shown the property to be under the ownership of K.M. Pardawala. Even if it is assumed for the sake of argument that the property belongs to him, he or his legal heirs could have challenged the order of forfeiture of property. However, neither he nor his legal heirs ever challenged the seizure of property, rather challenge is made by the deceased appellant who claims herself to be not the owner but the tenant. The logical consequence of the above would be that while the alleged owner has not challenged the order of forfeiture of the property, the person having no ownership right is challenging it despite the fact that the property is rented out and the forfeiture may not affect because the tenant can be evicted by the means of law. The property in question was acquired by Dawood Ibrahim Sheikh by taking possession somewhere in the year 1990 and thereupon given to his sister and Rs.80 lakhs were invested on the property. Dawood Ibrahim Sheikh was subjected to assessment by the Income Tax Department and the amount spent on the property was added. Thus, argument of the appellant cannot be accepted.

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FPA-12/BOM/2005

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Page 11 of 13

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We have otherwise analysed the rent receipts recently submitted by the appellant to show regular payment of rent to K.M. Pardawala and now his legal heirs. The payments therein are not through cheques but seems to be in cash. The rent receipts further shows that at many places the receiver has not signed the receipt and even the signature of landlord differs. We are not commenting the way the receipts have been generated. The prayer was made by the respondents to allow them to lodge the prosecution against the appellant and now the legal heirs for production of receipts which are not trustworthy. The permission was sought to lodge the criminal case against them. Since certain receipts were produced even at the final stage of arguments, we would not preclude the respondents to take up the matter in reference to those receipts produced before the Tribunal. The Registry is directed to preserve the receipts produced by the respondents and if it is called upon for the investigation, if a criminal case is lodged by the respondents, then give it to the police.

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The conduct of the party should be such where one can depose confidence and not where the platform of Court/Tribunal is misused. We are not precluding the respondents to take the action in reference to the rent receipts produced before us at the time of hearing. We would not comment on the conduct of the legal heirs who produced the rent receipts but we are unable to depose our confidence therein.

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FPA-12/BOM/2005

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In totality of the case, we do not find the arguments of the appellant worth acceptance and accordingly unable to cause interference in the impugned order, rather the same is confirmed.

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