Partly allowed

FPA-7/BOM/2005 of Tabrez Mohd. Dossa v. The Competent Authority, Mumbai

ATFP24 Jul 2024FPA-7/BOM/2005

Case brief

AI extract

What is this about?

The Tribunal allowed one appeal challenging forfeiture of a flat where the appellant disclosed the source of acquisition via a consent decree prior to detention. The Tribunal dismissed five other appeals where appellants failed to disclose sources of property acquisition, applying the burden of proof under SAFEMA. Common issues regarding TADA overlap and nexus requirements were rejected.

What did the court decide?

Appeal of Abida Mohd. Dossa allowed; forfeiture of Flat No. 604 discharged. Other appeals dismissed.

FPA-7/BOM/2005 of Tabrez Mohd. Dossa Vs. The Competent Authority… — Money Laundering | ATFP (2024)

¶1

APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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1. MP-320/BOM/2023 (Misc.) FPA-4/BOM/2005
Abida Mohd. Dossa	…	Appellant
2. FPA-5/BOM/2005
Mohd. Yaseen Mohd. Dossa	…	Appellant
3. FPA-6/BOM/2005
Arafat Haroon Merchant	…	Appellant
4. FPA-7/BOM/2005
Tabrez Mohd. Dossa	…	Appellant
5. FPA-8/BOM/2005
Tabrez Mohd. Dossa & Ors.	…	Appellant
6. FPA-10/BOM/2005
Shahnawaz M. Dossa & Ors.	…	Appellant
Versus
The Competent Authority, Mumbai	…	Respondent

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Advocates/Authorized Representatives who appeared For the Appellants : Shri S.K. Srivastav, Priyanka P. Gharge, Advocates For the Respondent : None CORAM JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI BALESH KUMAR : MEMBER

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FPA-4 to 8, 10/BOM/2005

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Page 1 of 24

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FINAL ORDER 24 .07.2024

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By batch of six Appeals, a challenge has been made to the order dated 31^st March, 2005 passed by the Competent Authority under Section 7 & 19 of Smugglers & Foreign Exchange Manipulators (Forfeiture of the Property) Act, 1976 (in short SAFEMA). The Appellant has given brief facts of the case and raised common issues to challenge the impugned order. We would be first dealing with the common issues and thereupon deal with the issues raised by each Appellant on their own facts. The Appellants were served with three show cause notices on different dates. The Competent Authority thereupon passed the impugned order after hearing the parties.

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The brief facts of the case are as under:

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1^st Show Cause Notice

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It is stated that a Show Cause Notice was issued on 23^rd May, 1995 to the Appellant and their relatives to show cause as to why the property mentioned in the notice should not be forfeited under SAFEMA. The Show Cause Notice was issued on the ground that one Mohammed Ahmed Umar Dossa was detained under Section 3(1) of Conservation of Foreign Exchange & Prevention of Smuggling Activities Act, 1974 (COFEPOSA) vide order dated 20^th March, 1993 by the Government of Maharashtra. The order of detention was neither revoked nor quashed or set aside by any Court of Competent Jurisdiction. An order was passed thereupon against the Appellant for forfeiture of property being relative of the detenue thus covered by Section 2(2)(b) of SAFEMA. The Competent Authority passed an order on 29^th February, 2000 pursuant to the first Show Cause Notice. On a challenge to the order, this Tribunal vide its order dated 19^th September, 2002 dismissed the Appeal. Aggrieved by the order of this Tribunal the Appellant preferred a

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FPA-4 to 8, 10/BOM/2005

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Page 2 of 24

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Writ Petition before Bombay High Court which quashed the order of this Tribunal on 06^th April, 2005. The matter was remanded back to the Tribunal for rehearing.

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It is stated that after rehearing of the Appeal pursuant to the order of the Bombay High Court, this Tribunal dismissed the Appeal vide its order dated 03.01.2011. The order aforesaid has been challenged before the Bombay High Court where parties were directed to maintain the status quo and Writ Petition is still pending.

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2^nd Show Cause Notice

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The Appellants have referred to second Show Cause Notice dated 05^th February, 2001 followed by an order on 12^th August, 2003 forfeiting the property of the Appellant said to be tenant therein. The Appellant preferred an Appeal before this Tribunal against the order of Forfeiture of the property.

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This Tribunal dismissed the substantive Appeal of the Appellants on 20^th July, 2018 and being aggrieved by the said order, the Criminal Writ Petition was preferred before the Bombay High Court. The matter is still pending however no interim order has been passed.

¶18

It is further stated that on account of forfeiture of the property one Ali Mohammad Abba Jumma Trust preferred an Appeal on the ground that it is the landlord of the rented property occupied by the Appellant and has been forfeited. The Tribunal dismissed the Appeal filed by the landlord as barred by the limitation because the Act of 1976 provides limitation of 45 days in filing the Appeal which can be extended by a further period of 15 days and not thereafter. It is however stated that the Appeal has been admitted by the Bombay High Court.

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FPA-4 to 8, 10/BOM/2005

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Page 3 of 24

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3^rd Show Cause Notice

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The Appellant has submitted that 3^rd Show Cause Notice under Section 6 of SAFEMA was given on 10^th October, 2001. The Competent Authority thereupon passed the order for forfeiture of property on 31^st March, 2005. Being aggrieved by the said order, this Appeal has been preferred. The description of the properties in reference to each Appellant would be given while dealing with the individual case. We would be first considering the common issues raised by the Appellant. Both the parties were given opportunity to file written arguments and accordingly written arguments have been submitted.

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Common Issues

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The common issues raised by the Appellants for our consideration

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(i) Properties were also subject matter under TADA

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The Learned Counsel for the Appellant submitted that the property forfeited under SAFEMA was subject matter of proceedings before designated TADA Court (bomb blast). The Court vide its order dated 05^th November, 1999 released several properties involved in the impugned Show Cause Notice and the Government has not filed appeal to challenge the said order. Thus, in the light of the aforesaid and judgment of the Apex Court in the case of “ Amina Ahmed Dossa & Ors. v/s. State of Maharashtra ” reported in 2001 (2) SCC 675, the impugned order deserves to be set aside.

¶27

It is further submitted that even properties attached under TADA are under challenge at the instance of Appellant and his relatives in the Criminal Writ Petition filed in the year 2001 itself and the Bombay High Court vide its

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FPA-4 to 8, 10/BOM/2005 Page 4 of 24

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order dated 17^th April, 2001 admitted the appeal and is pending for hearing. The Writ Petition was filed in reference to the judgment of the Apex Court in the case of Amina Ahmed Dossa (Supra). The Appellant and his relatives have also filed Declaratory Suits before the High Court of Bombay which were later on transferred to Bombay City Civil Court and the same are pending for hearing and final disposal.

¶30

We have considered the common issues raised by the Appellant and find that the judgment of the Apex Court in the case of Amina Ahmed Dossa (supra) was in reference to Section 8 of the Terrorist and Disruptive Activities (Prevention) Act, 1987 (in short TADA Act) and Section 82 of the Code of Criminal Procedure, 1973. The Appeal before the Apex Court was under Section 19 of TADA Act. The argument was raised that the order challenged before the Apex Court is not a judgment by designated Court and therefore remedy of appeal is not available to third party. The attachment of the properties was under Section 8 of TADA and not under the SAFEMA where the provision is quite different. Section 8 of the TADA Act make provision of Section 82 to 85 of the Code of Criminal Procedure applicable with a further safeguard that within the period of six months from the date of attachment, if any person, whose property has been made at the disposal of the Government appears voluntarily or apprehended can prove to the satisfaction of the Court that he would not abandon or conceal himself for the purpose of avoiding apprehensions. The Apex Court has passed the order in reference to Section 82 and 84 of the Code read with Section 8 and 19 of the TADA Act. It was found that the order challenged therein has not finally adjudicated the rights of the Appellant so as to file the Appeal on the ground of their claim. It was taken to be interlocutory order under Section 19 of the TADA Act and clarified that despite the dismissal of the Appeal, the aggrieved claimant would be entitled to seek to remedy of a suit and accordingly the appeal was not entertained by the Apex Court. It is FPA-4 to 8, 10/BOM/2005 Page 5 of 24

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necessary to clarify that the provisions of SAFEMA are quite distinct & different than the provision of TADA and for ready reference Section 6, 7 & 8 of SAFEMA are quoted here under: -

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“Section 6

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Notice of forfeiture.

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(1) If, having regard to the value of the properties held by any person to whom this Act applies, either by himself or through any other person on his behalf, his known sources of income, earnings or assets, and any other information or material available to it as a result of action taken under section 18 or otherwise, the competent authority has reason to believe (the reasons for such belief to be recorded in writing) that all or any of such properties are illegally acquired properties. it may serve a notice upon such person (hereinafter referred to as the person affected) calling upon him within such time as may be specified in the notice, which shall not be ordinarily less than thirty days, to indicate the sources of his income, earnings or assets, out of which or by means of which he has acquired such property, 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 under this Act.

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(2) Where a notice under sub-section (1) to any specifies any property as being held on behalf of such person by any other person. A copy of the notice shall also be served upon such other person.

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Section 7

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Forfeiture of property in certain cases.

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(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.

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(2) Where the competent authority is satisfied that some of the properties referred to in the show cause notice are illegally acquired properties but is not able to identify specifically such properties then, it shall be lawful for the competent authority to specify the properties which, to the best of its judgment, are

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FPA-4 to 8, 10/BOM/2005

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Page 6 of 24

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illegally acquired properties and record a finding accordingly under sub-section (1).

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(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.

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(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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Section 8

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Burden of proof.

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―In any proceedings under this Act, the burden of proving that any property specified in the notice served under section 6 is not illegally acquired property shall be on the person affected.‖

¶48

Section 6 quoted above provides for notice for forfeiture and it can be caused when the Competent Authority has reasons to believe that all or any property have been illegally acquired then such person should be called upon to indicate source of his income, earning and assets out of which or by means of which he had acquired the property. He has to produce evidence on which he relies and other relevant information. Section 7 provides for forfeiture of property in certain cases and Section 8 provides burden of proof on the person served with the notice under section 6 of the Act.

¶49

As against the aforesaid it would be gainful to refer to Section 8 of TADA Act and is quoted thus:

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Section 8

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8. Forfeiture of property of certain persons – (1) Where a person has been convicted to any offence punishable under this Act or any rule made thereunder, the Designated Court may, in addition to awarding any punishment, by order in writing, declare that any property, movable or immovable or both, belonging to the accused and specified in the order, shall stand forfeited to the Government free from all encumbrances.

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FPA-4 to 8, 10/BOM/2005

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Page 7 of 24

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(2) Where any person is accused of any offence under this Act or any rule made thereunder, it shall be open to the Designated Court trying him to pass an order that all or any properties, movable or immovable or both belonging to him, shall, during the period of such trial, be attached, and where such trial ends in conviction, the properties so attached shall stand forfeited to Government free from all encumbrances.

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(3) (a) If upon a report in writing made by a police officer or an officer referred to in sub-section (1) of Section 7, any Designated Court has reason to believe that any person, who has committed an offence punishable under this Act or any rule made thereunder, has absconded or is concealing himself so that he may not be apprehended, such court may, notwithstanding anything contained in Section 82 of the Code, publish a written proclamation requiring him to appear at a specified place and at a specified time not less than fifteen days but not more than thirty days from the date of publication of such proclamation.

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(b) The Designated Court issuing a proclamation under Clause (a) may, at any time, order the attachment of any property, movable or immovable or both, belonging to the proclaimed person, and thereupon the provisions of Sections 83 to 85 of the Code shall apply to such attachment as if such attachment were made under that Code.

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(c) If, within six months from the date of the attachment, any person, whose property is, or has been, at the disposal of the Government under sub-section(2) of Section 85 of the code, appears voluntarily or is apprehended and brought before the Designated Court by whose order the property was attached, or the Court to which such Court is subordinate, and proves to the satisfaction of such Court that he did not abscond or conceal himself for the purpose of avoiding apprehension and that he had not received such notice of the proclamation as to enable him to attend within the time specified therein, such property or, if the same has been sold, the net proceeds of the sale and the residue of the property, shall, after satisfying therefrom all costs incurred in consequence of the attachment, be delivered to him.

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(4) Where any shares in a company stand forfeited to the Government under this sub-section, then, the company shall, notwithstanding anything contained in the Companies Act, 1956, or the articles of association the company, forthwith register the Government as the transferee of such shares.

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The perusal of Section 8 reveals it to be distinct than the provision of SAFEMA and thereby the judgment of the Apex Court in reference to different statute cannot be applied. It is more so when even the facts giving rise to the case are different. If the Appellant and his relatives have filed declaratory suits before the Bombay High Court, it would have no bearing on

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FPA-4 to 8, 10/BOM/2005

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Page 8 of 24

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the present proceedings but can be under TADA. Therefore, the first issue raised by the Appellant to challenge the impugned order is not made out. The forfeiture of property under TADA is to be dealt with as per the provision of TADA and would have no effect on the action taken as per the provisions of SAFEMA.

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(ii). Validity of Notice under Section 6 of SAFEMA

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The Learned Counsel for the Appellant submitted that for issuing notice under Section 6 of the Act, respondents were under an obligation to first establish nexus between the income of the Detenue and the property in question. The Competent Authority has failed to establish nexus to the income of Detenue with the properties sough to be forfeited. The reference of the judgment of the Apex Court in the case of “ Aslam Mohammed Merchants v/s. Competent Authority & Ors .” reported in 2008 (14) SCC 186 has been given. It was stated that in para 23 of the said judgment, the Apex Court found the relevant provision of SAFEMA and NDPS Act to be pari-materia for recording reason to believe. According to the Appellant no link or nexus to the income of Detenue with the property has been given thus on the strength of the judgment of the Apex Court (Supra), the impugned order deserves to be set aside. We have considered the submissions of the aforesaid and to appreciate the arguments. We have gone through the judgment in the case of “ Aslam Mohammed Merchants v/s. Competent Authority & Ors. (Supra). We have already quoted Section 6 to 8 of SAFEMA. Section 6 of the Act does not mandate or cast burden on the Competent Authority to show link or nexus of the property with the income of the Detenue or the accused rather if it has reason to believe, that properties had been acquired illegally, a notice is to be served on the person. It is to call upon to disclose the sources of his income,

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FPA-4 to 8, 10/BOM/2005

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Page 9 of 24

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earning or assets out of which he has acquired such property. The evidence or the material for it has to be submitted by the person. Thus mandate of Section 6 is on the person to prove that properties have been acquired by lawful means. The burden of proof has been casted on the person who is served with the Show Cause Notice. Any interpretation contrary to it would make the provisions redundant.

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At this stage it is necessary to refer to the judgment of the Apex Court in the case of Aslam Mohammed Merchant v/s. Competent Authority & Ors. (Supra) wherein reference of the judgment of the Constitution Bench of Supreme Court in the case of Attorney General for India v/s. Amratlal Prajivandas & Ors. reported in AIR 1994 2179 SC has been given and would be relevant. It was found that definition of illegal acquired property given under SAFEMA undoubtedly wide and includes any property acquired by such person whether before or after commencement of Act. The relevant paras of said judgment are quoted thus:-

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“43. The definition of ―illegally acquired properties‖ in clause (c) of Section 3(1) of SAFEMA is undoubtedly quite wide. It means and includes ―any property acquired by such person, whether before or after the commencement of this Act, wholly or partly out of or by means of any income, earnings or assets derived or obtained from or attributable to any activity prohibited by or under any law for the time being in force relating to any matter in respect of which Parliament has power to make laws‖ [vide sub-clause (i)]. Sub-clauses (ii), (iii) and (iv) of clause (c) further widen and elaborate its ambit. The definition thus takes in not only the property acquired after the Act but also the property acquired before the Act, whatever be the length of time. Secondly, it takes in property which may have been acquired partly from out of illegal activity — in which case, of course, the provision in Section 9 would be attracted.

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xxxx

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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 overreaching or of overbreadth, as it may be called — a case of excessive regulation.

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Page 10 of 24

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SAFEMA is directed towards forfeiture of ―illegally acquired properties‖ of a person falling under clause (a) or clause (b) of Section 2(2). The relatives and associates are brought in only for the purpose of ensuring that the illegally acquired properties of the convict or detenu, acquired or kept in their names, do not escape the net of the Act. It is a well-known fact that persons indulging in illegal activities screen the properties acquired from such illegal activity in the names of their relatives and associates. Sometimes they transfer such properties to them, may be, with an intent to transfer the ownership and title. In fact, it is immaterial how such relative or associate holds the properties of convict/detenu — whether as a benami or as a mere name-lender or as a bona fide transferee for value or in any other manner. He cannot claim those properties and must surrender them to the State under the Act. Since he is a relative or associate, as defined by the Act, he cannot put forward any defence once it is proved that that property was acquired by the detenu — whether in his own name or in the name of his relatives and associates. It is to counteract the several devices that are or may be adopted by persons mentioned in clauses (a) and (b) of Section 2(2) that their relatives and associates mentioned in clauses (c) and (d) of the said sub- section are also brought within the purview of the Act. The fact of their holding or possessing the properties of convict/detenu furnishes the link between the convict/detenu and his relatives and associates. Only the properties of the convict/detenu are sought to be forfeited, wherever they are. 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/detenu, 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 utilised 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 object]. We may proceed to explain what we say. Clause (c) speaks of a relative of a person referred to in clause (a) or clause (b) (which speak of a convict or a detenu). Similarly, clause (d) speaks of associates of such convict or detenu. If we look to Explanation (3) which specifies who the associates referred to in clause (d) are, the matter becomes clearer. ‗Associates‘ means — (i) any individual who had been or is residing in the residential premises (including outhouses) of

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such person [‗such person‘ refers to the convict or detenu, as the case may be, referred to in clause (a) or clause (b)]; (ii) any individual who had been or is managing the affairs or keeping the accounts of such convict/detenu; (iii) any association of persons, body of individuals, partnership firm or private company of which such convict/detenu 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 of persons, body of individuals, partnership firm or private company; (v) any person who had been or is managing the affairs or keeping the accounts of any 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 convict/detenu; or (b) the value of the assets contributed by such convict/detenu to the trust amounts, on the date of contribution not less than 20% of the value of the assets of the trust on that date; and (vii) where the competent authority, for reasons to be recorded in writing, considers that any properties of such convict/detenu are held on his behalf by any other person, such other person. It would thus be clear that the connecting link or the nexus, as it may be called, is the holding of property or assets of the convict/detenu or traceable to such detenu/convict. Section 4 is equally relevant in this context. It declares that ―as from the commencement of this Act, it shall not be lawful for any person to whom this Act applies to hold any illegally acquired property either by himself or through any other person on his behalf‖. All such property is liable to be forfeited. The language of this section is indicative of the ambit of the Act. Clauses (c) and (d) in Section 2(2) and the Explanations (2) and (3) occurring therein shall have to be construed and understood in the light of the overall scheme and purpose of the enactment. The idea is to forfeit the illegally acquired properties of the convict/detenu irrespective of the fact that such properties are held by or kept in the name of or screened in the name of any relative or associate as defined in the said two Explanations. The idea is not to forfeit the independent properties of such relatives or associates which they may have acquired illegally but only to reach the properties of the convict/detenu or properties traceable to him, wherever they are, ignoring all the transactions with respect to those properties. By way of illustration, take a case where a convict/detenu purchases a property in the name of his relative or associate — it does not matter whether he intends such a person to be a mere name-lender or whether he really intends

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that such person shall be the real owner and/or possessor thereof — or gifts away or otherwise transfers his properties in favour of any of his relatives or associates, or purports to sell them to any of his relatives or associates — in all such cases, all the said transactions will be ignored and the properties forfeited unless the convict/detenu or his relative/associate, as the case may be, establishes that such property or properties are not ―illegally acquired properties‖ within the meaning of Section 3(c). In this view of the matter, there is no basis for the apprehension that the independently acquired properties of such relatives and associates will also be forfeited even if they are in no way connected with the convict/detenu. So far as the holders (not being relatives and associates) mentioned in Section 2(2)(e) are concerned, they are dealt with on a separate footing. If such person proves that he is a transferee in good faith for consideration, his property — even though purchased from a convict/detenu — is not liable to be forfeited. It is equally necessary to reiterate that the burden of establishing that the properties mentioned in the show-cause notice issued under Section 6, and which are held on that date by a relative or an associate of the convict/detenu, are not the illegally acquired properties of the convict/detenu, lies upon such relative/associate. He must establish that the said property has not been acquired with the monies or assets provided by the detenu/convict or that they in fact did not or do not belong to such detenu/convict. 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/detenu. There ought to be the connecting link between those properties and the convict/detenu, 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. The bringing in of the relatives and associates or of the persons mentioned in clause (e) of Section 2(2) is thus neither discriminatory nor incompetent apart from the protection of Article 31-B.‖

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In that regard we may further refer to the other judgment of the Apex Court in the case of the “ Kesar Devi v/s. Union of India ” reported in 2003 (7) SCC 427. The judgment aforesaid has been referred by the Apex Court in the case of Aslam Mohammed Merchants v/s. Competent Authority &

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Ors. (Supra) wherein the Apex Court did not agree with the view taken in the case of Kesar Devi (Supra). The relevant paras of the said judgment is quoted here under: -

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―10. The condition precedent for issuing a notice by the Competent Authority under Section 6 (1) (of SAFEMA) is that he should have reason to believe that all or any of such properties are illegally acquired properties and the reasons for such belief have to be recorded in writing. The language of the Section does not show that there is any requirement of mentioning any link or nexus between the convict or detenue and the property ostensibly standing in the name of the person to whom the notice has been issued. Section 8 of the Act which deals with burden of proof is very important.

¶87

It lays down that in any proceedings under the Act, the burden of proving that any property specified in the notice served under Section 6 is not illegally acquired property, shall be on the person affected. The combined effect of Section 6(1) and Section 8 is that the competent authority should have reason to believe (which reasons have to be recorded in writing) that properties ostensibly standing in the name of a person to whom the Act applies are illegally acquired properties, he can issue a notice to such a person. Thereafter, the burden of proving that such property is not illegally acquired property will be upon the person to whom notice has been issued. The statutory provisions do not show that the competent authority, in addition to recording reasons for his belief, has to further mention any nexus or link between the convict or detenue (as described in Subsection (2) of Section 2 and the property which is sought to be forfeited in the sense that money or consideration for the same was provided by such convict or detenue. If a further requirement regarding establishing any link or nexus is imposed upon the competent authority, the provisions of Section 8 regarding burden of proof will become otiose and the very purpose of enacting such a Section would be defeated.

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11. The requirement of establishing a ―link or nexus‖ between the illegally acquired money of the convict or detenue as described in Sub-section (2) of Section 2 of the Act and the properties sought to be forfeited is sought to be derived from certain observations made by this Court in Attorney General for India v. Amratlal Prajivandas (supra) in paragraph 44 of the Reports. If paragraph 44 is read as a whole, it will be clear that no such requirement of establishing any link or nexus on the part of the competent authority has been laid down therein. In the said paragraph, the Bench dealt with contention of the counsel for the petitioners that extending the provisions of SAFEMA to the relatives, associates and other "holders" is again a case of overreaching or of over-breadth, as it may be called – a case of excessive regulation.

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Page 14 of 24

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12. The judgment of a court is not to be interpreted like a statute where c every word, as far as possible, has to be given a literal meaning and no word is to be ignored. The observations made have to be understood in the context of the facts and contentions raised. As mentioned earlier, Explanation (2) appended to clause (c) of sub-section (2) of Section 2 gives a very long list of relations. The combined effect of clauses (iii) and (vii) of the Explanation is that a convict or detenu's wife's sister's lineal descendant whether male or d female and howsoever low is also included even though the relationship is quite remote. In those cases where the relationship is a very remote one, the competent authority may have to indicate some link or nexus while recording reasons for belief that the property is an illegally acquired property. But cases where relationship is close and direct like spouse, son or daughter or parents stand on an altogether different footing. Here no link or nexus has to be e indicated in the reasons for belief between the convict or detenu and the property, as such an inference can easily be drawn.

¶93

13. We are, therefore, clearly of the opinion that under the scheme of the Act, there is no requirement on the part of the competent authority to mention or establish any nexus or link between the money of the convict or detenu and the property sought to be forfeited. In fact, if such a condition is f imposed, the very purpose of enacting SAFEMA would be frustrated, as in many cases it would be almost impossible to show that the property was purchased or acquired from the money provided by the convict or detenu. In the present case, the appellant is the wife of the detenu and she has failed to establish that she had any income of her own to acquire the three properties. In such circumstances, no other inference was possible except that it was 9 done so with the money provided by her husband.‖

¶94

The subsequent judgment of Supreme Court again deals with the provision of SAFEMA. It is in the case of Union of India V/s. Champabai Devichand Saha & Ors. reported in 2011 (14) SCC 451. The para 7 & 8 of the said judgment is quoted here under: -

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―7. The appellant submitted that Rajnikant R. Belekar had not considered Section 6 (1) of SAFEMA. It was also submitted that the decision in Aslam Mohammad Merchant, relied upon in Rajnikant R. Belekar, dealt with the words ―illegally acquired property‖ defined in Section 68-B(g) of the Narcotic Drugs and Psychotropic Substances Act, 1985 (―the NDPS Act‖, for short), which was materially different from the definition of ―illegally acquired property‖ under Section 3 (1) (c ) of SAFEMA; and that therefore the decision in Aslam Mohammad Merchant, was not of much assistance and this aspect was ignored by Rajnikant R. Belekar. It was submitted that Rajnikant R. Belekar was wrongly decided. It was submitted that the principles relating to SAFEMA have been laid by this Court in Attorney General for India v. Amratlal Prajivandas, Fatima Mohd. Amin v. Union of

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India, Kesar Devi v/s. Union of India and other cases and the High Court had not considered any of those decisions.

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8. We find considerable merit in the submission of the appellant. The High Court has not referred to the facts, nor considered the validity of the notices issued under Section 6 of the Act and the orders of forfeiture under Section 7 of the Act with reference to the facts and provisions of SAFEMA and the decisions of this Court. The impugned order cannot therefore be sustained. ‖

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The paras of the judgment quoted above makes distinction between the provision of SAFEMA & NDPS defining illegality acquired property. It is held to be materially different.

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The judgment in case of Bishwanath Bhattacharya v/s. Union of India & Ors . in Civil Appeal No. 772-773/2014 dated 21.01.2014 is again on the subject and the relevant para of the said judgment is also quoted here under:-

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―38. The Act does not provide for the confiscation of the properties……..The conviction or the preventive detention contemplated under Section 2 is not the basis or cause of the confiscation but the factual basis for a rebuttable presumption to enable the State to initiate proceedings to examine whether the properties held by such persons are illegally acquired properties. It is notorious that people carrying on activities such as smuggling to make money are very clandestine in their activity. Direct proof is difficult if not impossible. The nature of the activity and the harm it does to the community provide a sufficiently rational basis for the legislature to make such an assumption. More particularly, Section 6 specifically stipulates the parameters which should guide the competent authority in forming an opinion, they are; the value of the property and the known sources of the income, earnings etc. of the person who is sought to be proceeded against. Even in the case of such persons, the Act does not mandate such an enquiry against all the assets of such persons. An enquiry is limited to such of the assets which the competent authority believes (to start with) are beyond the financial ability of the holder having regard to his known and legitimate sources of income, earnings etc. Connection with the conviction is too remote and, therefore, in our opinion, would not be hit by the prohibition contained under Article 20 of the Constitution of India.

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39. If a subject acquires property by means which are not legally approved, sovereign would be perfectly justified to deprive such persons of the enjoyment of such ill-gotten wealth . There is a public interest in ensuring that persons who cannot establish that they have legitimate sources d to acquire the assets held by them do not enjoy such wealth. Such a deprivation, in our opinion, would certainly be consistent with

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the requirement of Articles 300-A and 14 of the Constitution which prevent the State from arbitrarily depriving a subject of his property.‖

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In view of the judgment refer to above and plain reading of Section 6 of the Act we do not find that the Competent Authority should have issued Show Cause Notice after showing link or nexus with the income of Detenue and property sought to be forfeited. If the argument is accepted, we would be virtually rewriting the provision, which is not permissible. The second issue raised by the Appellant is accordingly rejected.

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(iii). Violation of Principles of Natural Justice

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The Appellant has challenged the order of the Competent Authority on the ground that principles of nature justice have not been followed because proceeding remain pending before many officers but decided by one posted on the date of hearing. The facts mentioned in the written argument are of no substance because proceedings or hearing remain pending and taken up by the Authority posted from time to time. The requirement is for passing of the order by Authority who has heard the case. In the instant case the final hearing was made by the Competent Authority on 23^rd May, 2005 said to be for few minutes without any proof has resulted in pronouncement of order. It was by the same Authority. The written arguments itself show that the Appellant remain present on the date of hearing though said to be only of 10 to 15 minutes. It is however a fact that the order has been passed by the same Authority. Thus, arguments in reference to the principle of natural justice is not made out and therefore rejected summarily.

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The facts of each case are taken separately

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Abida Mohd. Dossa in Appeal No. FPA-4/BOM/2005

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The Flat No. 604 on 6^th Floor of the building known as Bagh-eRehmat (Rajput Villa) Society, Agripada, in Bombay has been forfeited. It is

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stated that the Appellant married the Detenue on 04^th May, 1975. She filed the suit in the year 1983 bearing no. 783/1983 on account of constraint relationship with the Detenue causing cruelty and thereby consent decree dated 16^th August 1983 was passed in reference to the Mehr (Dower) of Rs. 3 Lakh. The first charge over the flat was given to the Appellant. The source of acquisition of that property was disclosed by the Appellant. The said property was acquired by the Appellant Ms. Abida Bano almost 10 years prior to detention of the Detenue.

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Thus, it could not have been subjected to forfeiture when the Appellant had disclosed the source of property. The prayer was made to discharge the property from the forfeiture. It cannot be said that the decree to get the Mehar was obtained by collusion.

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We have considered the submissions and find substance in the arguments of the Appellant. The Appellant has disclosed the source of acquisition of Flat No. 604 on 6^th Floor. It may be that it was originally acquired by the detenue but having settled in favour of the Appellant pursuance to a decree, the forfeiture would nullify the decree of the Court. It cannot be said to be under collusion as the decree was made 10 years prior to detention. Thus, we do not find forfeiture of Flat no. 604 to be legally substantially and accordingly we make interference in the order for property aforesaid.

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Mohd. Yaseen Mohd. Dossa & Anr. in Appeal No. FPA-5/BOM/2005

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It is stated that Room No. 2B, Zaveri Mansion, AI-Majeed Mansion, 2, Motlibai Street, Agripad, Mumbai and Flat No. 12, 4^th Floor, Zaveri Mansion, AI-Majeed Mansion, 2, Motlibai Street, Agripada Mumbai have been forfeited though the Appellant is on monthly rent in Flat no. 2B and Flat No. 12, of Zaveri Mansion. The owner of the said flats is Smt. Sultana Abdul Majeed. The rent receipt has been referred in the written arguments and were

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enclosed with the reply. The reference of the tenancy right has been given which cannot be construed to be the ownership of the Appellant. The appellant has denied payment for premium (pagdi) for acquisition of the property on rent. The tenancy has been governed by Bombay Rent Act, 1999 and thereby the property was not under the ownership of the Appellant.

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It is a matter of common knowledge that the persons involved in illegal activities and generating huge amounts of black money would try to invest in the properties under the guise of tenancy. This gives them opportunity to enjoy the fruits of their illegal activities, transfer of rights and interest in the property paid under hand, which normally goes under different names like “pugree” or “premium”. It remains a transaction exclusively between the owner of the property and the tenant. Both the owner and tenant, in privy, strike the deal and the owner transfers his rights and interest in the property to the tenant. The law cannot remain a mute spectator when two persons unite to defeat the purposes of the laws of the land. In this connection, a reference may be made to Section 114 of the Evidence Act. The same is quoted hereunder for ready reference: -

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“ 114. Court may presume existence of certain facts The Court may presume the existence of any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business, in their relation to the facts of the particular case.‖

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In case, the contention of the appellant being tenants in the property is accepted, there is no reason for them to challenge the forfeiture of the property being protected by the realm of the provisions of the Rent Act and who can be affected by the forfeiture is the owner of the property and not the tenant. On a bare reading of the terms of the rent agreement relied upon by the appellants, it would show that the appellants are virtually owning ownership rights in the property. However, the appellants have failed to show any source for acquiring the said properties.

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Considering the aforesaid facts, there can be no doubt that the amount of consideration was paid by the respective appellants, although did not disclose the source of the consideration.

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It is submitted that the property was subject matter of TADA before the Designated Court TADA which rejected the same contention but matter is still pending.

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We are unable to otherwise accept the arguments not only for the reason that provision for forfeiture of property under two different statutes are distinct and separate and the basis of forfeiture is also distinct and different. Section 21 of SAFEMA otherwise makes it clear that finding under other laws not to be conclusive proceedings under this Act. The judgment of the Apex Court in the case of Amina Ahmed Dossa v/s. State of Maharashtra (Supra) is already clarified and in any case if the Appellant is only the tenant and not the owner of the property should not get affected by the forfeiture of the property and according to the Appellant, he has already handed over the Flat No. 2B and Flat No. 12 for redevelopment of the said building. It could not be clarified how the Appellant is affected by the forfeiture when he is only a tenant. The allotment of Flat No. 502-503 by the developer shows that Appellant was in fact enjoying all the benefit in the property and therefore only the forfeiture of the property has been challenged, otherwise tenant would not be affected by change of the hands of the ownership. It may remain with the builder or with the Government. The Appellant has failed to disclose the source of acquisition of property with all the rights referred above. Thus, the arguments are not worth acceptance and thereby summarily rejected.

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Arafat Haroon Merchant in Appeal No. FPA-6/BOM/2005

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The property in the hands of the Appellant forfeited is Flat No. 611-C, 6^th Floor, Meena Apartment, Mazagaon, M.P. Road, Mumbai and Shop No. 1,

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on the Ground Floor of Ruksana Palace, Plot No. 57/54A, Mohd. Ali Road, Mumbai. The Appellant is tenant in the property and if that is so then there was no reason for the Appellant to challenge the forfeiture because who can be affected by the forfeiture is the owner of the property. The change in the title does not affect the tenant rather he can continue the tenancy even with change of title. It is more so if no padgi or premium has been paid by the Appellant. On a bare reading of the terms of the rent agreement relied upon by the appellants, it would show that the appellants are virtually owning ownership rights in the property. However, the appellants have failed to show any source for acquiring the said properties.

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So far as Flat No. 611-C, of Meena Apartment is concerned, the source said to have been disclosed but we do not find any material on record to accept the contention. It is contented by the Appellant that he was having income out of gifts and further received Rs. 11,70,000/- under the Foreign Exchange Immunity Scheme, 1991 during the year ended 31^st March 1992. The remittance under FEIS is only a mode of transfer and not evidence for receipt of genuine money by the Appellant.

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Further, the sum of Rs. 2 Lakh said to have been taken as loan from Ms. Hadia Haroon Merchant but no document for it has been submitted. It could have been Income Tax Return and loan agreement but no such document has been submitted. As regards Shop No. 1, on the Ground Floor of Ruksana Palace, Plot No. 57/54A, Mohd. Ali Road, Mumbai, the Appellant is stated to be on monthly rent. No pagdi or premium said to been paid by the Appellant. If that is so than there is no reason for tenant challenge forfeiture of property.

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We find failure of the Appellant to substantiate the arguments and failure to disclose the sources of property therefore we are unable to cause interferences of the impugned order of the forfeiture.

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Tabrez Mohd. Dossa in Appeal No. FPA-7/BOM/2005

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The subject matter in this case is Shop No. 1/18, Green house, next to Manish Market, Mumbai-400001. The shop is said to be on rent and if it is on the rent than the Appellant should not be affected by the forfeiture rather if anybody can be affected, it would be the owner of the property because change of ownership would not affect the tenant. The Appellant has contended that the he started a business in the name and style of “Sana Communication Centre” in 1992 however, it stood closed in 1995. It has been stated by the Counsel that the Appellant had income from interest on saving deposits but no source of such savings has been disclosed. Further, the appellant had purchased equipment for running Sana Communication Centre and income out of it has been received by way of FEIS, 1991 but no documentary evidence has been produced before this Tribunal to support the contentions, as aforesaid. Therefore, we do not find any substance in challenge to the forfeiture of the property in the hands of the Appellant.

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Tabrez Mohd. Dossa & Ors. in Appeal No. FPA-8/BOM/2005

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It is stated that Gausia House situated at Narayan Dhuru Street, Mumbai-400003 has been forfeited. It was acquired by the Appellant from his natural guardian by a Conveyance Deed dated 27.09.1990 for the consideration of Rs. 1,90,000/-. No document to prove it has been submitted. The building has been given on lease and many tenants are said to be residing. It is stated that share of each Appellant is to the extent of 1/5^th portion on the property and the source has been disclosed in the Income Tax Return. It is further stated that the property has been acquired by the appellants by way of gifts, but we do not find any material on record to substantiate the arguments and accordingly unable to accept the case of the Appellant against the forfeiture of the property.

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Shahnawaz M. Dossa & Ors. in Appeal No. FPA-10/BOM/2005

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The property in question as Room No. 1 to 4, Machiswala Building, 31, Nagdevi Street, Mumbai. It is the contention of the Appellant that the property is in the ownership of Seth Ismailji Abdoolally Machiswala Religious and Charitable Trust and was originally let out to Municipal Corporation of Greater Bombay, however it ceased to use the premises. The Corporation agreed to vacate the premises on the condition that a compensation of Rs. 13,00,204/- shall be paid by the trust. It is further contented by the appellants that on account of payment of compensation to the corporation on behalf of the trust, they acquired tenancy rights in the property aforesaid. The appellants have stated that loans have been taken for payment of compensation and the same is reflected in the bank statements and Income Tax. It is stated that the bank statements do not reflect the name of the person from whom the loan was allegedly taken. The loan agreement has not been filed to corroborate the contentions of the appellant. The Appellant therein said to be tenant of the building and of that is so then it could not be clarified as to how they have been affected by the forfeiture because change of title does not affect the tenant. On a bare reading of the terms of the rent agreement relied upon by the appellants, it would show that the appellants are virtually owning the property. However, the appellants have failed to show any source for acquiring the said properties. The bank statement only shows entries but from the amount was sourced has not been proved. Thus for the reason given above and when Appellant is not claiming ownership of the property thus, we do not find any ground to cause interference in the impugned order.

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In the light of the discussions made above, we allow the Appeal No.

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4/2005 while dismissing other Appeals for the reasons given reference in

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each Appeal.

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(Justice Munishwar Nath Bhandari) Chairman