Five appeals challenging property forfeiture orders under SAFEMA. The Tribunal held that the lapse of detention orders due to failure of confirmation under COFEPOSA does not invalidate prior forfeiture orders under SAFEMA, as the Act applies to persons against whom detention orders were validly made.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
| 1. MP-303/BOM/2023 (Misc.) FPA-92/BOM/1995 |
|---|
| Shri MohanlalLokumal Punjabi …. Appellant |
| Versus The Competent Authority, SAFEMA & NDPS, Bombay …. Respondent |
| 2. FPA-94/BOM/1995 |
| Shri Dinesh Mohanlal Punjabi …. Appellant |
| Versus |
| The Competent Authority, SAFEMA & NDPS, Bombay …. Respondent |
| 3. FPA-93/BOM/1995 |
| Shri Deepak Mohanlal Punjabi …. Appellant |
| Versus |
| The Competent Authority, SAFEMA & NDPS, Bombay …. Respondent |
| 4. MP-302/BOM/2023 (Misc.) FPA-91/BOM/1995 |
| Smt. Anita Mohanlal Punjabi Deceased through LRs …. Appellants |
| Versus |
| The Competent Authority, SAFEMA & NDPS, Bombay …. Respondent |
| 5. FPA-98/BOM/1995 |
| Smt. Heena Dinesh Punjabi …. Appellant |
| Versus |
| The Competent Authority, |
SAFEMA & NDPS, Bombay …. Respondent |
| Advocates/Authorized Representatives who appeared |
| For the Appellants : Shri PreshitSurshe, Adv. |
| For the Respondent : Shri Shailesh Kumar, Adv. |
FPA-91-94&98/BOM/1995
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CORAM:
JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI BALESH KUMAR : MEMBER
FINAL ORDER 24.04.2024
FPA-91-94&98/BOM/1995
The batch of appeals have been filed to challenge the order dated 31.08.1995 passed by the Competent Authority, SAFEMA/NDPS, Bombay. By the impugned order, the following properties have been forfeited:
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detained vide order dated 29.05.1994. Both of them fall within the purview of Section 2(2)(b) of Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (for short `the Act of 1976). The other appellants are the close relatives of Mohan Lal Lokumal Punjabi and Dinesh Lokumal Punjabi. Referring to the facts of the case, the Competent Authority ordered to forfeit the properties listed above.
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not affect the forfeiture of the properties and if the argument of the counsel for the appellants is accepted, then the order for the forfeiture of properties may not continue in all the cases beyond a period of two years of detention. It is submitted that the maximum period of detention is of two years as per Section 10 of the Act of 1974 and on expiry of the said period, it would lapse but the lapse does not affect the forfeiture of the properties on an order passed on detention of the person under SAFEMA. The position would be different if an order of detention is held to be void and illegal, then it would be void from the date of its issuance and in that case forfeiture may not be justified or continued. The case in hand is not of the aforesaid nature, rather lapse of detention is by efflux of time.
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detailed out in the opening para of this order. Section 7 of the Act of 1976 is quoted hereunder for ready reference:
7. Forfeiture of property in certain cases.—
(1) 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 (and in a case where the person affected holds any property specified in the notice through any other person, to such other person also) a reasonable opportunity of being heard, by order, record a finding whether all or any of the properties in question are illegally acquired properties.
(2) Where the competent authority is satisfied that some of the properties referred to in the showcause notice are illegally acquired properties but is not able to identity specifically such properties, then, it shall be lawful for the competent authority to specify the properties which, to the best of its judgment, are illegally acquired properties and record a finding accordingly under subsection (1).
(3) Where the competent authority records a finding under this section to the effect that any property is illegally acquired property, it shall declare that such property shall, subject to the provisions of this Act, stand forfeited to the Central Government free from all encumbrances.
(4) Where any shares in a company stand forfeited to the Central Government under this Act, then, the company shall, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or the articles of association of the company, forthwith register the Central Government as the transferee of such shares‖.
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― 2. Application.—
( 1) The provisions of this Act shall apply only to the persons specified in sub-section (2).
(2) The persons referred to in sub-section (1) are the following, namely:—
(a) every person—
(i) who has been convicted under the Sea Customs Act, 1878 (8 of 1878), or the Customs Act, 1962 (52 of 1962), of an offence in relation to goods of a value exceeding one lakh of rupees; or
(ii) who has been convicted under the Foreign Exchange Regulation Act, 1947 (7 of 1947), or the Foreign Exchange Regulation Act, 1973 (46 of 1973), of an offence, the amount or value involved in which exceeds one lakh of rupees; or
(iii) who having been convicted under the Sea Customs Act, 1878 (8 of 1878), or the Customs Act, 1962 (52 of 1962), has been convicted subsequently under either of those Acts; or
(iv) who having been convicted under the Foreign Exchange Regulation Act, 1947 (7 of 1947), or the Foreign Exchange Regulation Act, 1973 (46 of 1973), has been convicted subsequently under either of those Acts;
(b) every person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (52 of 1974):
Provided that—
(i) such order of detention, being an order to which the provisions of section 9 or section 12A of the said Act do not apply, has not been revoked on the report of the FPA-91-94&98/BOM/1995 Page 7 of 15
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Advisory Board under section 8 of the said Act or before the receipt of the report of the Advisory Board or before making a reference to the Advisory Board; or
(ii) such order of detention, being an order to which the provisions of section 9 of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the review under sub-section (3) of section 9, or on the report of the Advisory Board under section 8, read with sub-section (2) of section 9, of the said Act; or
(iii) such order of detention, being an order to which the provision of section 12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of that section, or on the basis of the report of the Advisory Board under section 8, read with sub-section (6) of section 12A, of that Act; or
(iv) such order of detention has not been set aside by a court of competent jurisdiction;
(c) every person who is a relative of a person referred to in clause (a) or clause (b);
(d) every associate of a person referred to in clause (a) or clause (b);
(e) any holder (hereafter in this clause referred to as the present holder) of any property which was at any time previously held by a person referred to in clause (a) or clause (b) unless the present holder or, as the case may be, anyone who held such property after such person and before the present holder, is or was a transferee in good faith for adequate consideration.
Explanation 1.—For the purposes of sub-clause (i) of clause (a), the value of any goods in relation to which a person has been convicted of an offence shall be the wholesale price of the goods in the ordinary course of trade in India as on the date of the commission of the offence.
Explanation 2.—For the purposes of clause (c), ―relative‖, in relation to a person, means— (i) spouse of the person; (ii) brother or sister of the person; (iii) brother or sister of the spouse of the person; (iv) any lineal ascendant or descendant of the person; (v) any lineal ascendant or descendant of the spouse of the person; (vi) spouse of a person referred to in clause (ii), clause (iii) clause (iv) or
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clause (v); (vii) any lineal descendant of a person referred to in clause (ii) or clause (iii).
Explanation 3.—For the purposes of clause (d), ―associate‖, in relation to a person, means— (i) any individual who had been or is residing in the residential premises (including outhouses) of such person; (ii) any individual who had been or is managing the affairs or keeping the accounts of such person; (iii) any association of persons, body of individuals, partnership firm, or private company within the meaning of the Companies Act, 1956 (1 of 1956), of which such person had been or is a member, partner or director; (iv) any individual who had been or is a member, partner or director of an association of persons, body of individuals, partnership firm or private company referred to in clause (iii) at any time when such person had been or is a member, partner or director of such association, body, partnership firm or private company; (v) any person who had been or is managing the affairs, or keeping the accounts, of an association of persons, body of individuals, partnership firm or private company referred to in clause (iii); (vi) the trustee of any trust, where,— (a) the trust has been created by such person; or (b) the value of the assets contributed by such person (including the value of the assets, if any, contributed by him earlier) to the trust amounts, on the date on which the contribution is made, to not less than twenty per cent. of the value of the assets of the trust on that date; (vii) where the competent authority, for reasons to be recorded in writing, considers that any properties of such person are held on his behalf by any other person, such other person.
Explanation 4.—For the avoidance of doubt, it is hereby provided that the question whether any person is a person to whom the provisions of this Act apply may be determined with reference to any facts, circumstances or events (including any conviction or detention) which occurred or took place before the commencement of this Act‖.
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been passed under the Act of 1974. The proviso therein excludes certain categories of order. The order on the report of the Advisory Board under Section 8 of the Act of 1974 has not been revoked after the report of the Advisory Board, thus the learned Competent Authority had rightly persuaded itself to pass the order of the forfeiture of the properties.
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and accordingly the order of detention was ordered to lapse. Paras 6 to 10 of the judgment of the Apex Court are quoted hereunder for ready reference:
―6. We have perused the provisions of the COFEPOSA Act, particularly, Section 8 thereof which mandates that the case of the detenu will be referred to an Advisory Board for its opinion within five weeks from the date of detention and thereafter the Advisory Board is required to give its opinion within eleven (11) weeks from the said date (i.e. date of detention of the person concerned). Under Section 8(f) of the COFEPOSA Act, on the basis of the opinion of the Advisory Board, if the same is in favour of the detention, the appropriate Government is required to take a decision on confirmation of the detention order, a conclusion that can be drawn from the use of the expression ―may confirm the detention order‖ appearing in the aforesaid clause (f) of Section 8 of the COFEPOSA Act.
―The opinion of the Advisory Board as communicated to the detenue as well as the order of confirmation of detention in-original passed by the State Government, if any, be placed before the Court on 12th December, 2017.
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List the matter on 12th December, 2017‖.
10. Maximum period of detention . The maximum period for which any person may be detained in pursuance of any detention order to which the provisions of section 9 do not apply and which has been confirmed under clause (f) of
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section 8 shall be one year from the date of detention and the maximum period for which any person may be detained in pursuance of any detention order to which the provisions of section 9 apply and which has been confirmed under clause (f) of section 8 read with subsection (2) of section 9 shall be two years from the date of detention: Provided that nothing contained in this section shall affect the power of the appropriate Government in either case to revoke or modify the detention order at any earlier time‖.
The provision quoted above provides the maximum period of detention which can be of two years. If the argument of the appellants is accepted that with the lapse of detention order, the forfeiture of the property cannot survive, then in all the cases, without an exception, the order of forfeiture of property would not survive beyond a period of two years i.e. the maximum period of detention. It is for the reason that after two years, the order of detention would lapse. We are unable to accept the arguments raised by the appellants to cause interference in the order of forfeiture of the properties because of lapse of detention order.
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its confirmation by the Government and therein they set aside the order of the High Court also.
consequence thereof, the order of forfeiture of property has to be interfered, then no order of forfeiture would survive beyond a period of two years whereas that is not the intention of the legislature.
(JUSTICE MUNISHWAR NATH BHANDARI) CHAIRMAN
(BALESH KUMAR) MEMBER
New Delhi 24th April, 2024
‗SRD‘
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3 issues framed by the court
Whether the forfeiture of property orders passed under Section 7 of SAFEMA continue to operate after the detention order lapses under Section 8(f) of COFEPOSA due to lack of government confirmation.
Whether the lapse of a detention order after the maximum statutory period invalidates the forfeiture of property obtained under Section 7 of the Smugglers and Foreign Exchange Manipulators Act.
Whether Section 2(2)(b) of the forfeiture Act ceases to apply to relatives when the parent detention order lapses by efflux of time rather than being declared void ab initio.
Colour shows how this judgement treated each authority
5 provisions across 3 enactments
Mohanlal Lokumal Punjabi
Dinesh Mohanlal Punjabi
Deepak Mohanlal Punjabi
Anita Mohanlal Punjabi
Heena Dinesh Punjabi
The Competent Authority, SAFEMA & NDPS, Bombay
MUNISHWAR NATH BHANDARI
BALESH KUMAR
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
