Allowed

Nazir Ahmed Usmangani Digmar v. Competent Authority

Gujarat HC29 Jun 2018SCA/6143/1999

Case brief

AI extract

What is this about?

Three petitions arising from SAFEMA forfeiture proceedings against a detenu's relatives and the tenants of the forfeited building. The High Court quashed the order of detention and the consequential forfeiture orders, holding that SAFEMA proceedings could not survive once the detention order was revoked on the lifting of the emergency, and directed disbursement of the deposited sale proceeds.

What did the court decide?

Detention order and SAFEMA forfeiture orders quashed and set aside; respondents restrained from taking possession; Rs.14,51,000 lying with the Registry directed to be paid to the petitioner.

Nazir Ahmed Usmangani Digmar Vs Competent Authority — Property and Title | Gujarat HC (2018)

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C/SCA/6143/1999 CAV JUDGMENT

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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

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R/SPECIAL CIVIL APPLICATION NO. 6143 of 1999 With R/SPECIAL CIVIL APPLICATION NO. 3732 of 2002 With R/SPECIAL CIVIL APPLICATION NO. 4348 of 2001

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FOR APPROVAL AND SIGNATURE:

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HONOURABLE MR.JUSTICE S.G. SHAH Sd/-

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1 Whether Reporters of Local Papers may be allowed to Yes see the judgment ?

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2 To be referred to the Reporter or not ? Yes 3 Whether their Lordships wish to see the fair copy of No the judgment ?

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4 Whether this case involves a substantial question of No law as to the interpretation of the Constitution of India or any order made thereunder ?

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NAZIR AHMED USMANGANI DIGMAR

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Versus

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COMPETENT AUTHORITY

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Appearance:

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MR RS SANJANWALA(728) for the PETITIONER(s) No. 1 DELETED(20) for the RESPONDENT(s) No. 2 MR DHAVAL M BAROT(2723) for the RESPONDENT(s) No. 1 MS MANISHA LAVKUMAR(1010) HARSHIL D SHUKLA for the RESPONDENT(s) No. 1

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RULE NOT RECD BACK(63) for the RESPONDENT(s) No. 3,4

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CORAM: HONOURABLE MR.JUSTICE S.G. SHAH Date : 29/06/2018

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COMMON CAV JUDGMENT

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Heard learned advocates for the respective

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parties. Perused the record.

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Page 1 of 53

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C/SCA/6143/1999 CAV JUDGMENT

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All these three petitions are more or less pertaining to the common detenu and properties owned by his family though arising out of different impugned order at different time. Therefore, when so many factual details are common and correlated, these petitions are heard together and decided together by this common judgment to avoid repetition of same facts in three different judgments and more particularly, when result of decision in one main petition will affect the decision in another petition(s).

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Though discussion of factual details and law point would be common, it would be appropriate to recollect the basic facts of each petition separately, which is summarized as under without reproducing the same factual details repeatedly for the next petition(s).

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SPECIAL CIVIL APPLICATION No.6143/1999

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The petitioner herein is Nazir Ahmed Usmangani Digmar as legal heir and representative of his mother Roshanbibi Usmangani Digmar as well as Shamabanu Nazirahmed Digmar.

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Petitioner has challenged the judgment and order dated 8.6.1999 by respondent No.2 – Appellate Tribunal for Forfeited Property under the Smugglers and

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Page 2 of 53

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C/SCA/6143/1999 CAV JUDGMENT

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Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (hereinafter referred as `SAFEMA') . By such impugned judgment the appellate authority has confirmed order to forfeit 28% share in aggregate belonging to deceased Roshanbibi Usmangani Digmar and Shamabanu Nazirahmed Digmar in the property known as “Shama Theater” with building and equipment and other assets by confirming the order of respondent No.1 u/S. 7 of SAFEMA.

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The petitioner has also prayed to restrain the first respondent being Competent Authority under SAFEMA from taking possession of the said 28% share in partnership firm on the basis of their notice dated 7.7.1999 issued u/S. 19(1) of the SAFEMA.

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Such petition was filed in August, 1999 wherein probably first order is only dated 23.12.1999 which reads as under: -

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“Heard Ld. Advocate Mr.Kazi, Mr.Sanjanwala & Mr.Jayant Patel for the parties. The matter is awaiting admission. However, by way of an interim arrangement the following order is passed which is also executable even if the matter is not admitted.

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2. There is no dispute at present about the fact that the petitioner has only 28% shares in the property. The dispute is whether that right is rightly forfeited or not.

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3. Without observing anything on the maintainability of this petition, it is directed that the Competent Authority/respondent No.1 shall proceed to auction the whole property in question and the petitioner as well as the other owners having 72% of the share will

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Page 3 of 53

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C/SCA/6143/1999 CAV JUDGMENT

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be entitled to participate in the auction. It is also directed that the upset prince (reserve price) shall be fixed by the Authority in consultation with the petitioner as well as the other owners. After obtaining the Valuation report from an authorised Valuer if there is any dispute regarding upset price, it would be open for the parties to approach this Court. On completion of the auction proceedings & realization of the price, the sale proceeds will be deposited in this Court and the Court shall thereafter pass appropriate orders. The auction proceedings shall be completed at the earliest preferably before 10.2.2000. S.O. to 10.2.2000.”

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Thereafter, order dated 26.4.2004 reads as

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under: -

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“It appears that this Court had passed an order on 23/12/99 that the Competent Authority/respondent No.1 shall proceed to auction the whole property in question and the petitioner as well as the other owners having 72% of the share will be entitled to participate in the auction. It was also directed that upset price shall be fixed by the authority in consultation with the petitioner as well as the other owners, after obtaining the valuation report from an authorized Valuer. It was further directed that in case of any dispute regarding upset price, it would be open to the parties to approach this Court. It was also directed that on completion of the auction proceedings and realization of the price, the sale proceeds will be deposited in this Court and the Court will, thereafter, pass appropriate orders (with respect to disbursement).

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2. It is stated at the bar that the auction was held in terms of the aforesaid order, fetching a price of Rs.14,51,000/- (Fourteen Lac Fifty One Thousand Only) as the total sale proceeds. By a subsequent order of this Court, the aforesaid amount was deposited before the Registry of this Court. Therefore, a question would now arise about the disbursement of the aforesaid amount.

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3. The office to verify about the disbursement in respect of the aforesaid amount or any part thereof and shall state as to the amount which is now lying with the Registry. S.O. to 27/04/04.”

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However, thereafter, by judgment and order dated 6.5.2004, the petition was allowed in following terms: -

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Page 4 of 53

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C/SCA/6143/1999 CAV JUDGMENT

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“16. For the foregoing reasons and for the reasons recorded in Special Civil Application No.4348/2001 dated 16/04/04, this petition is allowed.

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16.1 The order of the second respondent dated 08/06/1999, confirming the order of forfeiture of 28% share of the petitioners, passed by the Competent Authority u/S.7 of The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 on 14/05/1979 as well as the order dated 07/07/1999 passed by the said Authority, forfeiting 28% share of the petitioner, are ordered to be quashed and set aside and the Respondents are permanently restrained from taking possession of the said partnership share of 28% in aggregate in "Shama Theater" on the basis of the Notice dated 07/07/99 issued u/S.19(1) of the SAFEMA.

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17. It is directed that the Registry will pay the aforesaid amount of Rs.14,51,000/- (Rupees Fourteen Lacs Fifty One Thousand Only) being the share of deceased Roshanbibi U. Digmar and deceased Shamabanu N. Digmar to the present petitioner, as their heir and legal representative, after due verification and identity in respect of the petitioner.”

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However, it seems that such judgment was challenged in Letters Patent Appeal No.124 of 2005 wherein by common Judgment and order dated 18.7.2014 with Letters Patent Appeal Nos.127 and 129 of 2005 , the Division Bench of this Court has relied upon the decision of Hon'ble Supreme Court in the case of Union of India v. Mohanlal Likumal Punjabi reported in 2004(3) SCC 628 and unreported decision of this Court in Letters Patent Appeal Nos.1053 and 1054 of 2003 and held that since detention order passed under “COFEPOSA” [Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974] was revoked u/S.11(1)(b) and thereby when such

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C/SCA/6143/1999 CAV JUDGMENT

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revocation is not based on report of Advisory Board, then proviso (i) to section 2(2)(b) of SAFEMA is not attracted and as such, operation of SAFEMA is not excluded.

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By such determination, Division Bench has allowed the appeal, quashing and setting aside the judgment and order dated 6.5.2004 and 26.4.2004 in connected Special Civil Applications and remanded the matters to the learned Single Judge for hearing them a fresh. Based upon such order, matters were listed for fresh hearing.

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Now, if we come to the factual details, it may be summarized as under: -

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[12.1] Petitioner - Nazir Ahmed Usmangani Digmar was detained under COFEPOSA by order dated 22.12.1975 of Government of Goa. Such order of detention of the petitioner has been revoked by the Chief Secretary of Government of Goa by order dated 21.3.1977 and in the name of Administrator of Government of Goa; copy of such order of revocation of detention is at Annexture `A' with the petition which confirms that such revocation is under sub-section (1) of Section 11 of the COFEPOSA. Therefore, there is no clarity that whether its under section 11(1)(a) or 11(1) (b) but when original order is by the State Government only it is to be presumed that order of revocation is

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C/SCA/6143/1999 CAV JUDGMENT

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u/S.11(1)(a).

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[12.2] After such order of revocation, the respondent No.1 being Competent Authority under SAFEMA has in April, 1977 and March, 1979 issued notice under section 6(1) of SAFEMA to one M/s. Parvati Exhibitors, a partnership firm (which is respondent No.3 herein) and partner of such firm (who is respondent No.4).

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[12.3] In such partnership firm namely; M/s. Parvati Exhibitors, mother of the detenu Roshanbibi Usmangani Digmar was holding 5% share whereas wife of the detenu namely; Shamabanu holding 23% share. Detenu being petitioner herein is legal heir and representative of his deceased mother and deceased wife who expired respectively in the year 1995 and 1997. In addition to mother and wife of detenu / petitioner herein, M/s. Parvati Exhibitors was having other partners namely; Parvatiben Bhulabhai, Bijiyabhai Bhagwanbhai and Haji Mastan. Similarly to the revocation of detention order of the petitioner, the detention of Makanbhai Bijiyabhai was quashed by the Bombay High Court and proceeding under SAFEMA in the case of Makanbhai was subsequently quashed by the Gujarat High Court. Similarly, the order of detention of Haji Mastan was also quashed by Bombay High Court. However, since relatives and partners of such detenu namely; Makanbhai

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Page 7 of 53

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C/SCA/6143/1999 CAV JUDGMENT

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Bijiyabhai, Haji Mastan and present petitioner are partners in M/s. Parvati Exhibitors, notice under SAFEMA was issued to M/s. Parvati Exhibitors also, initially, in April, 1977 and a fresh notice again in March, 1979. However, after prolong proceeding, the only issue remains in such show cause notice and proceeding is with reference to one cinema hall namely; `Shama Theater' with reference to cost of the construction of such theater and the source of funds for said construction. It is alleged that after theater was constructed mother of the detenu namely; Roshanbibi Usmangani Digmar in the firm was brought in partnership and, therefore, she was given 5% share whereas wife of the detenu Shamabanu Nazirahmed Digmar had invested Rs.1,00,000/- in the firm and, therefore she was holding 23% share in the partnership.

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[12.4] The Competent Authority has considered and held that the firm did not produce satisfactory evidence with regard to the total cost of investment and source of said investment and, therefore passed an order dated 14.5.1979 to forfeit the said property being cinema hall namely; ` Shama Theater'.

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[12.5] M/s. Parvati Exhibitors had challenged the validity of such auction under COFEPASA and SAFEMA by filing Special Civil Application No.2331 of 1979 before this High Court wherein interim relief was granted

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Page 8 of 53

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C/SCA/6143/1999 CAV JUDGMENT

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against the order by Competent Authority. M/s. Parvati Exhibitors had also filed an appeal before the Appellate Tribunal being FPA No.36/AHD/79-80. However, during pendency of such appeal, the Special Civil Application before the High Court was allowed in view of the fact that detention orders of the partners of the firm were quashed and set aside.

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[12.6] Such order dated 8.8.1994 in Special Civil Application No.2331 of 1978 with Special Civil Application No.2581 of 1979 and Special Civil Application Nos.594 and 595 of 1980 is at Annexture `B' wherein the Division Bench has passed the following order: -

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“..... It is represented that the detention order of the detenu has been quashed by an order of the Court. As a consequence thereof, the order under SAFEMA has also to be quashed. The petitions are dismissed accordingly....”

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[12.7] However, respondents have preferred Misc. Civil Application No.865 of 1995 contending that though the order of detention of Makanbhai and Haji Mastan were quashed, the detention order of the petitioner was not quashed by the High Court and, therefore, it survive and hence SAFEMA proceeding may go on. There is no clarity that when such application was allowed but it is admitted position that such application was allowed by the High Court irrespective of order dated 21.3.1997 by the State of Goa revoking the detention of the petitioner.

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C/SCA/6143/1999 CAV JUDGMENT

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[12.8] Therefore, petitioner has no option but to continue with the appeal before the appellate authority wherein appellate authority has passed orders after few years. One such order is produced on record at Annexture C' and impugned order at Annexture D'. The perusal of Annexture C' and D' makes it clear that in such appeal preferred by M/s. Parvati Exhibitors, the Appellate Tribunal has considered that the order under SAFEMA is not in piece-meal against the detenu but it is whole against the partnership firm and, therefore, whether appeal will survive or not pursuant to revocation order of detenu by Court is the core issue. However, when appeal is finally decided by impugned judgment dated 8.6.1999, the Appellate Authority recorded the submissions by the Deputy Director of the Competent Authority under SAFEMA being respondent No.1 herein that the order of revocation of detention of Nazir Ahmed Usmangani Digmar, present petitioner, was made on 21.9.1977 pursuant to lifting of the emergency on the very same date and was not conscious order of revocation made after application of mind by the concerned authorities. Whereas the appellate tribunal has considered the provisions of Section 2 of the SAFEMA for holding that since detention order of Bijiyabhai Bhagwanbhai and Haji Mastan was quashed by the Court, order by the Competent Authority to forfeit shares of their relatives is

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C/SCA/6143/1999 CAV JUDGMENT

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set aside by allowing their appeal but dismissing the appeal so far as share of Usmangani Digmar and Shamabanu Nazirahmed Digmar are concerned. It is surprising to note that appellant before the appellate authority was M/s. Parvati Exhibitors and not their partners, however, the appellate authority has bifurcated its decision differently for different partners by confirming the order under SAFEMA only against two partners i.e. Roshanbibi Usmangani Digmar and Shamabanu Nazirahmed Digmar. Based upon such decision, the Competent Authority has issued a notice dated 7.7.1999 under section 19(1) of the SAFEMA for taking possession of 28% shares holding by Roshanbibi Usmangani Digmar and Shamabanu Nazirahmed Digmar in M/s. Parvati Exhibitors and therefore petitioner has preferred this petition.

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[12.9] It may be recollected here that pending such proceeding Roshanbibi Usmangani Digmar and Shamabanu Nazirahmed Digmar were died and, therefore, petitioner being their legal heirs has continued such proceeding.

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The main grievance of the petitioner is to the effect that;

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– detention order of Nazir Ahmed Usmangani Digmar was revoked as back as on 21.3.1977 and,

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Page 11 of 53

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C/SCA/6143/1999 CAV JUDGMENT

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therefore, proceeding under SAFEMA initiated thereafter cannot continue,

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– the tribunal has erred in considering that revocation order was not on merits but was pursuant to lifting of emergency and, therefore, it is also contended by respondents that it was not a conscious order of revocation,

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– once detention order is revoked, the whole basis of SAFEMA proceeding would come to an end and cannot be continued,

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– The proceeding under SAFEMA was initiated against the partnership firm namely; M/s. Parvati Exhibitors which cannot be continued as the firm is not an associate of the detenu - Nazir Ahmed Usmangani Digmar,

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– There is no separate order against the partners of the firm,

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– The proceeding against the firm cannot be continued only because relative of the detenu is partner in such firm, but they are not the sole partners as there are other partners also,

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– The order of detention and proceeding under

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Page 12 of 53

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C/SCA/6143/1999 CAV JUDGMENT

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SAFEMA against one of the partner namely; Haji Mastan was dropped,

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– Thereby when order of detention against co-detenu has come to an end in absence of any specific evidence against present detenu, there cannot be any order under SAFEMA only because detenu could not challenge the order of detention either at the relevant time or could not succeed in such challenge before action taken under SAFEMA because it is settled legal position that order of detention can be challenged even at the time of challenging the order under SAFEMA.

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– Order of detention of Nazir Ahmed Usmangani Digmar was also held invalid by judgment and order dated 16.4.2004 in Special Civil Application No.4348 of 2001 by the petitioner (though Letters Patent Appeal against such judgment has been allowed and matter is remanded back to the learned Single Judge for hearing it a fresh, with due respect it is to noted that the judgment in Letters Patent Appeal No.124, 127 and 129 of 2005 dated 18.7.2004 is mainly dealing with the continuation of SAFEMA proceeding alone against all the petitioners and does not discuss the judgment and order dated 16.4.2004 holding the conviction of the petitioner as illegal so as to quash and set aside such order and to remand the matter back). Therefore, there is no reason to believe that observations and order dated 16.4.2004

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C/SCA/6143/1999 CAV JUDGMENT

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in Special Civil Application No.4348 of 2001 is not disturbed though that matter is remanded back.

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– No notice was ever served on legal heirs of Roshanbibi Usmangani Digmar and Shamabanu Nazirahmed Digmar and thereby no hearing was given to the petitioner,

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– The properties of the partners cannot stand forfeited in case of SAFEMA proceeding against the firm,

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It is to be recollected here that by order of this Court, the properties in question was auctioned and three other partners of M/s. Parvati Exhibitors has been duly paid their 72% share while 28% share of the petitioner is lying deposited in this Hon'ble Court with a direction that necessary orders may be passed when this petition is decided. With this reference, an order dated 6.12.1999 in order sheet, which is in hand written needs to be recollected here, which reads as under: -

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“Heard Mr.Kazi for the petitioner and Mr.Jayant Patel for the respondent.

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Until further orders, the parties shall maintain status quo regarding the properties in question with the clarification that the petitioner shall continue to collect the rent from the tenants in respect of the premises which are subject matter of this petition but the petitioner shall deposit 28% of such amount in a separate bank account and such amount shall not be withdrawn without express permission of this Court or respondent authorities. The petitioner shall send the intimation about the bank account to the respondent authorities. The

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C/SCA/6143/1999 CAV JUDGMENT

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petitioner shall also not transfer in any manner or encumber his interest in the concerned property without leave of this Court.

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This order shall operate until further orders.”

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The respondents have resisted this petition on several amongst following grounds: -

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… Roshanbibi Usmangani Digmar and Shamabanu Nazirahmed Digmar are relatives of Nazir Ahmed Usmangani Digmar who was detained under COFEPASA,

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– Four partners of the firm are relatives of the different detenu whereas 5^th partner of the firm is himself a detenu,

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– under section 6(1) of SAFEMA notice was issued on 21.3.1979 to M/s. Parvati Exhibitors to show cause as to why the properties of the firm should not be forfeited as illegally acquired properties,

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– In such notice, it is contended that the cost of building, furniture and fitting is estimated at Rs.11,53,600/- by the valuer approved by IT Department whereas the partnership firm has shown the cost at Rs.5,37,200/- only. ( However, it is also admitted fact in the notice that the construction was carried out during the year 1969-72 whereas notice was issued in the year 1979 and there is no disclosure that when

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C/SCA/6143/1999 CAV JUDGMENT

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valuation is carried out but there is reason to believe that it must have been carried out in 1978-79 only and, therefore, it becomes clear that the Competent Authority has failed to consider the change in valuation between the year 1969-72 and 1978-79) ,

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– The petitioner did not avail an opportunity of hearing and hence order dated 14.5.1979 u/S.7 of SAFEMA was passed,

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– It is also contended in para 2.3 of affidavit in reply that the shares of the relatives of the detenu were acquired by the investment of the illegally earned money of detenu Nazir Ahmed Usmangani Digmar and hence, the forfeiture of their shares is justified.

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– It is also admitted that petitioner was collecting monthly rent from the occupants of the shops. For giving specific statement to the authority that they are tenants of the petitioner and shall regularly paying the rent to the petitioner and they were aware of the proceeding and requested the authority to continue to run their business and agreed to pay the monthly rent to the respondent.

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– It is also contended that premises were rented even after issuance of show cause notice and that they have taken away the possession of the rented shops also.

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C/SCA/6143/1999 CAV JUDGMENT

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The additional affidavit of one Mr.G.C. Parihar, Inspecting Officer of respondent No.1 dated 26.5.2000 confirms that against the valuation of Rs.15,75,670/-, the property was sold in auction at the price of Rs.14,51,000/- and such amount has been deposited before this Court.

¶125

[A] With such affidavit, respondents have produced on record valuation report of the property by Assistant Valuation Officer of Income Tax Department, Baroda. Unfortunately, such report is not property legible. It is surprising that how Central Government counsel are producing such illegible documents on record and how Registry is accepting it as such.

¶126

In view of above facts and circumstances and submissions by both the sides, now, if we consider the matter on merits, it becomes clear and certain that petitioner has preferred this petition as legal heir of deceased mother and also as a legal heir and legal representative of deceased wife. It is also undisputed fact that property which is sought to be forfeited by impugned order namely; `Shama Theater' is neither owned as absolute owner by detenu himself nor by his mother and wife. It is also undisputed fact that mother of the detenu who is practically petitioner before us through his legal heir was holding only 5% share in the property

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C/SCA/6143/1999 CAV JUDGMENT

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and similarly wife of the detenu who is petitioner before us through his legal heir (who is common and coincidentally he was detenu) was holding 23% share in such property. Therefore only because detenu himself is legal heir of co-owner of the property in question, it cannot be said that nexus with the detenu in such property is proved if there is no specific evidence to that effect. Similarly, when it is undisputed fact that none of the petitioner namely; Roshanbibi Usmangani Digmar and Shamabanu Nazirahmed Digmar were absolute owner but they are holding 5% and 23% share in the property respectively. The name of the property being `Shama Theater' is also not attributed in proprietary right of Shamabanu Nazirahmed Digmar since she was holding only 23% share. Therefore, unless there is positive evidence about nexus between the illegal activities and earnings by such activity by the detenu and the present petitioners, it cannot be said that such properties are subject to proceeding under SAFEMA. Though such burden may be rest upon the persons against whom notice under SAFEMA has been issued, it is quite clear and obvious that such burden needs to be proved by prima facie evidence because such inquiry is quasi judicial inquiry and not the full fledge inquiry so as to allow the parties to prove their case as provided under CPC and / or Cr.P.C. as well as Evidence Act either by calling witnesses or by calling any one to produce the documentary evidence in favour of such persons.

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C/SCA/6143/1999 CAV JUDGMENT

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Therefore, if petitioners were able to show that they have sufficient income to invest some amount in any such property then it is for the Competent Authority to inquire and investigate and prove that either there is lack of sufficient income of the petitioners or the investment by the petitioner is from the funds of the detenu. In absence of such evidence on record, even prima facie evidence, it cannot be said that there is nexus between the property in question and activities and / or funds of the detenu. Therefore, a benefit of doubt needs to be extended to the petitioners, more particularly, when they are not sole owner of the property.

¶133

Moreover, there is one another draw back in the impugned order, inasmuch as, Competent Authority has failed to serve notice upon the other partners and to safeguard their rights by not allowing them to save the property as provided under Section 9 of the SAFEMA. For the purpose, observation and discussion by this Court with reference to the provisions of Section 9 of the SAFEMA in Special Civil Application No.12085 of 2000 is material wherein this Court has in detail discussed the provisions of SAFEMA while directing the Competent Authority to consider the facts and circumstances afresh for passing a fresh order considering the provisions of Section 9 and after offering an opportunity to the petitioners in accordance with law before passing an order of forfeiture of property. The relevant discussion in

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such judgment reads as under: -

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“7... If we consider the merits of the matter, before discussing factual details or legal aspect, one fact needs to be ascertained i.e. whether respondents have bothered to proceed further in accordance with the provisions of the SAFEMA or not, more particularly, as per provisions of Section 9 etc. of SAFEMA, though it is contended by the learned advocate Mr.Shukla for the respondent that provision of Section 9 of the SAFEMA is not applicable to the present case.

¶138

8. If we peruse the provisions of the SAFEMA, it becomes clear that the powers of the Competent Authority to declare any property as illegal and then to forfeit it to the Central Government is subject to the provisions of the SAFEMA and not absolute base upon the factual details alone. For the purpose, when order is referring sub Section (3) of Section 7 of SAFEMA, it would be appropriate to refer it, which reads as under: -

¶139

Section 7 Forfeiture of property in certain cases :

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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.

¶141

9. Thereby, now, plain reading of the Section makes it clear that the provision envisages the right on the Competent Authority to declare any property as illegal and to pass an order of forfeiting the property under the provisions of this Act and when the words “subject to the provisions of this Act” is there, it becomes clear that all other provisions of the Act are relevant. Therefore, Section 9 is equally important and material which reads as under: -

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9. Fine in lieu of forfeiture :

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(1) Where the Competent Authority makes a declaration that any property stands forfeited to the Central Government under Section 7 and it is a case' where the source of only a part, being less than one-half of the income, earnings or assets with which such property was acquired has not been proved to the satisfaction of the Competent Authority, it shall make an order giving an option to the person affected to pay, in lieu of forfeiture, a fine equal to one and one-fifth times the value of such part.

¶144

Explanation.-For the purpose of this sub-Section, the value of any part of income, earnings or assets, with which any

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property has been acquired, shall be-

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(a) in the case of any part of income or earnings, the amount of such part of income or earnings;

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(b) in the case of any part of assets, the proportionate part of the full value of the consideration for the acquisition of such assets.

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(2) Before making an order imposing a fine under sub-Section (1), the person affected shall be given a reasonable opportunity of being heard.

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(3) Where the persons affected pays the fine due under subSection (1) within such time as may be allowed in that behalf, the Competent Authority, may by order, revoke the declaration of forfeiture under Section 7 and thereupon such property shall stand released.

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10. Bare perusal of Section 9 makes it clear that only Competent Authority shall make an order giving an option to the person affected to pay in lieu of forfeiture, a fine equal to 1 and 1/5^th times, the value of such part. On the one hand, there are some explanations and other provisions but on the other hand, when such provision is very much clear that, when the word `shall' is used, the Competent Authority is bound to make an order giving an option to the person affected to pay a fine in lieu of forfeiture.

¶153

11. Irrespective of all other arguments and submissions, so also factual details, it becomes clear and certain that ultimately the aim of the legislature is to get the value of such illegally acquired properties for its benefit. For the purpose, after acquisition, if the Competent Authority or the government has to dispose off such property by public auction, it becomes clear that their ultimate goal is to encash the value of such property and, therefore, Section 9 makes it clear that before confirming the forfeiture of property, the Competent Authority shall give an option to the affected person to pay fine equal to 1 and 1/5^th times, the value of such property in lieu of forfeiture. Whatsoever be the case, government and Competent Authority may not have to initiate the auction proceeding which would not only consume time of the government officers but incurred some expenditure also. As against that, if affected person is ready and willing to pay more amount than the value of such property as fine, then, ultimately, goal of the authority / government would be over and, therefore, it cannot be said that such provision is not mandatory but discretionary and not applicable to the present case.

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12. Surprisingly, when provision of Section 9 is very much clear, it has been argued and submitted by learned advocate for the respondent that the affected party does not mean the present petitioners but it would mean detenu and his or her relatives only and that when petitioners have purchased the property and, thereby, pursuant to Section 11 when such transaction is null and void ab initio, they cannot be considered as affected person. Though it may be a settled legal position pursuant to provision of Section 11 of the Act that subsequent transfer after the statutory notice is null and void, it is nowhere confirmed that affected party means only detenu and his / her relatives.

¶157

13. It would be appropriate to recollect the factual observation in the case of Competent Authority, SAFEMA v. M.H. Hameed reported in 2009(3) KHC 295 (WA No.730 of 2009 decided on 30.9.2009) by Division Bench of Kerala High Court wherein it is recorded that though the order of detention was not pursued by the detenu and thus he was detained for the full term, he proceeded against action under the provisions of SAFEMA in respect of certain properties, which stood in his name when Competent Authority under SAFEMA passed an order on 20.2.1991 it was found that there was unexplained investment in his name, however, by giving option to him to pay the amount of fines in lieu of forfeiture, under section 9 of the Act. Accordingly, detenu exercised his option and paid the fine and redeemed the property from forfeiture.

¶158

14. It would be also necessary to recollect the factual details which is emerging from the record of Special Civil Application No.4222 of 2009 between Ilias Suleman Bhaya v. Union of India , wherein Competent Authority under SAFEMA in its order No.CA/AHD/R/2(c)/S-43/78-79 dated 14.11.1980 while passing the order to forfeit the certain properties under SAFEMA recorded that it is submitted before him that when complete evidence with regard to the loan cannot be produced after lapse of so many years, this is a fit case which falls under the provisions of Section 9 of the ACT and relying upon such submission, the Competent Authority has passed an order that since more than half of the investment is traceable to legal sources, fine of Rs.18,000/- is levied under section 9 of the SAFEMA. Therefore, passing an order under Section 9 is not obscure to the respondent but probably they are selective in passing any such order under Section 9 of the Act for the reasons best known to them.

¶159

15. In the case between Competent Authority and Administration v. Manilal Jalal being APO No.107 of 2013 with GA No.1852/2010, the Division Bench of Calcutta High Court has on 12.7.2013 confirmed the order of learned Single Judge that

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the writ petitioner ought to be permitted to redeem the property on payment of fine in lieu of forfeiture in terms of Section 9 of the SAFEMA.

¶163

16. The principal Act being COFEPASA; so also the SAFEMA nowhere defines that who is to be considered as affected person. Therefore, common meaning of the word `affected person' is to be considered wherein it is very much clear that the person who is affected by any impugned order is to be treated as affected person. In view of such fact, the petitioners can certainly be considered as an affected person because property is to be seized from him and possession is sought from him only, as he is bonafide purchaser for value with possession since long.

¶164

17. Reference to Section 11 is also material which does not confirm the stand of the Competent Authority. Section 11 of SAFEMA reads as under: -

¶165

11. Certain transfers to be null and void:

¶166

Where after the issue of a notice under Section 6 or under Section 10, any property referred to in the said notice is transferred by any mode whatsoever such transfer shall, for the purpose of the proceedings under this Act, be ignored and if such property is subsequently forfeited to the Central Government under Section 7, then, the transfer of such property shall be deemed to be null and void.

¶167

17. The bare reading of Section 11 makes it clear that the effect of this Section i.e. declaring the transaction as deemed to be null and void is to be affected subsequently to forfeit to the Central Government. Therefore, though the respondent can ignore the transfer of the property for passing order under Section 7, it does not confirm that order under Section 9 need not be passed by the Competent Authority when Section reads that “...if such property is subsequently forfeited to the Central Government under Section 7, then, the transfer of such property shall be deemed to be null and void.”

¶168

18. The bare reading of Sections 9 and 11 makes it clear that the Competent Authority shall initially make an order giving the option to the person affected to pay fine in lieu of forfeiture and thereby if affected person pays a fine that may be imposed by the Competent Authority before confirming the forfeiture then there may not be an order of forfeiture of the property and in that case, in absence of forfeiture, the transfer of property cannot be deemed to be null and void. Therefore, in my opinion, Competent Authority needs to pass an order under Section 9 before confirming to forfeit the property and to

¶169

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declare that sale transaction in favour of the petitioners are deemed to be null and void pursuant to provisions of Section 11, if fine is not paid.

¶172

23. I am restraining myself from reproducing further observation by the Delhi High Court in the case of Shri Gulshan Ahuja (Supra) since it is already available for reference by all but certainly rely upon the observations made in this judgment which ultimately allows the writ petition by quashing the order of Competent Authority, forfeiting the properties of the petitioners before the Hon'ble High Court based upon the similar facts that petitioners before the High Court was bonafide purchaser for the value. Said judgment was never challenged by the respondent before the Hon'ble Supreme Court and hence it is final.

¶173

27. At this stage, reference to Section 19 – Power to take possession is also equally material which provides that: - (1) Where any property has been declared to be forfeited to the Central Government under this Act, or where the person affected has failed to pay the fine due under sub-section (1) of section 9 within the time allowed therefore under sub-section (3) of that section, the Competent Authority may order the person affected as well as any other person who may be in possession of the property to surrender or deliver possession thereof to the Competent Authority or to any person duly authorised by it in this behalf within thirty days of the service of the order.”

¶174

The above proviso makes it clear that even before taking the actual physical possession, intimation to handover the possession in thirty days is required, but in the present case, petitioner was never called upon to handover the possession and directly, order of deemed possession was passed and then he was dispossessed but ultimately this Court has by interim order allowed the petitioner to stay in the same house.

¶175

31. Reference to the judgment between Chandra Kumar Jain v. Union of India reported in 2015(11) SCC 427 is relevant to support final order and determination in this judgment wherein authority under SAFEMA is directed to permit the appellant to produce the material as they deem fit in their defence to prove that order under SAFEMA cannot be passed. It is admitted fact the such opportunity is not given to the petitioners...”

¶176

Therefore, there is reason to grant prayer / relief which was already granted in Special Civil Application

¶177

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No.12085 of 2000 portion of which is reproduced hereinabove which is also applicable in the present case. However, in that case, the matter was remanded back to the Competent Authority for passing appropriate order under Section 9 after giving reasonable opportunity to both the sides.

¶180

Whereas, in the present case it is clear and certain that detention order of co-detenu has been quashed by competent Court.

¶181

However, so far as basic issues regarding order of detention of Nazir Ahmed Usmangani Digmar is concerned, it is undisputed fact that there is no ground to detain the petitioner except the disclosure by the Competent Authority in order of detention that petitioner has been detained for effective execution of emergency. However, it is also undisputed fact that emergency was lifted because of judicial pronouncement when it was considered as improper and illegal and immediately on lifting of emergency, all persons who were detained only because of emergency were immediately released by revocation of their detention orders pursuant to lifting of emergency on very same day. If it is so, then, it is clear that when government itself could not prove the validity of emergency and revoke the order of detention based upon emergency, then, detention orders itself needs to be termed as null and void irrespective of completion of

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such order or irrespective of manner in which it is revoked. Therefore, when respondents have also failed to follow the strict rules for detention regarding forming grounds for detention and serving it to the detenu, the detention order cannot sustain in the eyes of law. Even at the cost of repetition, let it be recollected here that detention order was simply conveying that petitioner is to be detained for effective implementation of emergency without disclosing any illegal activities by him and such detention order was revoked with effect from the lifting of emergency which was by all means improper and illegal. Unfortunately, the competent authorities are taking disadvantage of their situation in delaying such proceeding when they have no option but to revoke the order of detention on lifting of emergency which was condemned by one and all including present government at the relevant time.

¶185

At the same time, it cannot be ignored that in appropriate proceeding the detention and order of forfeiture of other part of the same property has been quashed by the competent Court on both the grounds i.e. (1) merits as well as (2) legal technicalities and, therefore, benefit of such order would certainly goes in favour of the present petitioners.

¶186

It is also undisputed fact that order of detention of other co-detenu has already been quashed and,

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therefore, if they all are detained together on same set of facts and circumstances, then, only because present petitioners could not chase the detention order together with other two detenu at the relevant time, it cannot be said that his conviction order is proper.

¶190

Moreover, the record shows that petitioners have explained that from which fund they have purchased the property in question but if Competent Authority is not satisfied by such explanation, they should have offer reasonable opportunity to the petitioners to produce some more evidence but without offering such opportunity, discarding prima facie evidence produced by the petitioners results into material irregularity and illegality which would be the material ground for allowing this petition.

¶191

In view of above facts and circumstances, I do not find any substance in the defence version so as to dismiss this petition. Thereby, I endorse the pleadings and submissions by the petitioner so as to allow this petition and, therefore, petition is allowed as prayed for in terms of paragraph 22(A) with consequential relief to disburse the amount of share of the petitioners which is lying in cash with the present Registry.

¶192

SPECIAL CIVIL APPLICATION No.4348 of 2001

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Present petition is filed by legal heir of Usmangani Digmar and his wife Roshanbibi Usmangani Digmar namely; Nazir Ahmed Usmangani Digmar and Imtiyaz Usmangani Digmar, wherein property namely; `Roshan Manzil' owned jointly by Usmangani Digmar and his wife Roshanbibi Usmangani Digmar were ordered to be forfeited under SAFEMA by the respondent.

¶196

The present petition is similar as Special Civil Application No.6143 of 1999, details of which is recorded herein above. Herein the petitioner has challenged the order dated 20.03.2001 by the Appellate Tribunal under SAFEMA so also order dated 17.12.2000 by respondent No.1 being the Competent Authority under SAFEMA forfeiting the property known as `Roshan Manzil' . Such petition has been admitted by an order dated 20.06.2001 and order to be heard with Special Civil Application No.6143 of 1999 was passed, details of which is narrated herein above.

¶197

The facts of the petitioner so far as this petition is concerned are summarized as under: -

¶198

The petitioner No.1 was detained under COFEPOSA by the order dated 22.12.1995 by the Government of Goa.

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However, such order of detention was revoked on 21.03.1977 by the detaining authority. The copy of the order is at Annexure `A'.

¶202

Pursuant to detention of the petitioner, a notice dated 04.12.1976 was issued by the respondent upon the father of the petitioner Nos.1, 2 and 3 namely; Usmangani Digmar and husband of respondent No.4 calling upon him to show cause that why the property known as `Roshan Manzil' situated at Nani-Daman should not be declared as illegally acquired property. Father of the petitioner had replied to such notice dated 30.01.1978 questioning the legality of the notice and stating that he has built the building with the income earned by him and with borrowed funds in all Rs.5,47,000/- and that, property was not acquired illegally as defined under the SAFEMA.

¶203

The father of the petitioner namely Usmangani had challenged such order in Special Civil Application No.1788 of 1978. However, it was dismissed pursuant to decision by the Hon'ble Supreme Court in the case of Attorney General of India vs. Amrutlal Pranjivan reported in AIR 1994 SC 2179 whereby validity of SAFEMA has been upheld by the Hon'ble Supreme Court when petitioner has challenged the constitutional validity of Act in such petition. However, before such order of dismissal dated 09.08.1994 i.e. during the pendency of

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the petition before the High Court, further proceedings in respect of notice dated 04.12.1976 was already stayed whereas Usmangani died in July 1978.

¶207

Pursuant to dismissal of Special Civil Application No.1788 of 1978, the SAFEMA proceedings were again initiated against legal heirs of deceased by issuing show cause notice under Section 6(1) of of the SAFEMA on 4.12.1976.

¶208

It was contended that money spent in constructing building was not properly explained and valuation by the Income Tax Department was highly excessive. However, respondent No.1 has by its impugned order dated 17.02.2000 held that property was illegally acquired and, therefore, same was forfeited under Section 7 of the SAFEMA.

¶209

Petitioner has challenged such orders of forfeiture in FPA No.26/BOM/2000 before the Appellate authority. During pendency of such appeal, the appellate authority has granted stay on condition to deposit rent by the first petitioner in a separate bank account and to invest the same in fix deposit. It is contended by the petitioner that such conditions were fulfilled by them.

¶210

Before the appellate authority petitioners have contended that;

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(A) Proceedings under SAFEMA cannot survive, since detention order was revoked on 21.03.1977 i.e. before the expiry of period of detention submitting that when detention itself was revoked, no proceedings under the SAFEMA can be initiated. For such contention, petitioner is relying upon following decision;

¶214

[1] Ibrahim Bachu vs. State of Gujarat reported in AIR 1985 SC 697

¶215

[2] ND Choksi vs. Union of India reported in 1992 (2) GLR 891

¶216

[3] Unreported Judgment of Bombay High Court dated 23.02.1981 in Criminal Application No.1320 of 1975

¶217

[4] GK Goswami vs. ST Pillai

¶218

[5] Dhanika vs. The Competent Authority reported in 233 ITR 26

¶219

(B) There was considerable lapse of time between notice upon Usmangani, which is dated 04.12.1976 and order of forfeiture is dated 17.02.2000 i.e. 24 years. Because by lapse of time, it was impossible for the petitioner to establish that Usmangani has acquired funds for constructing the building and that such fund was not illegal fund.

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[C] There is no nexus between activities of detenu and the acquired property and no link was established between detenu and the property except that property is hold by the father of the detenu and that at the time of construction of building in the year 1986 by the father of the detenu, the detenu was only 20 years of age and, therefore, when he was not having any earning or other activity, it cannot be said that illegal funds of the detenu was used by his father for constructing the building.

¶223

Appellate tribunal has rejected the appeal by the impugned order dated 20.03.2001.

¶224

Therefore, petitioner has challenged such impugned order substantially that once the order of detention is revoked by the detaining authority, no proceedings can be continued against the relatives of the detenu under the SAFEMA because the provisions of SAFEMA presuppose the validity of order of detention against the detenu.

¶225

In addition to above ground against impugned order under SAFEMA, petitioner No.1 being original detenu has, since order of his detention has been revoked, amended the petition by challenging the validity of such detention order dated 22.12.1975 on following grounds;

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(A) Before executing order of detention, ground of detention needs to the formulated and signed by the Competent Authority. Whereas while detaining the petitioner as per Annexure `A', the grounds have not been formulated at all and therefore, by and large order is patently bad and illegal.

¶229

(B) The grounds for detention have to be communicated as per Constitutional obligations under Article 22(5), however, it was not communicated to the detenu and, therefore, also detention order is bad and illegal.

¶230

(C) That there was no compliance of Section 12(A) of COFEPOSA even after emergency was lifted.

¶231

(D) That by his letter dated 15.09.1983, detenu has demanded relevant documents from the government like order of detention and confirmation of such detention so also order to release the petitioner from detention was provided by letter dated 14.12.1983, but the Government could not provide the grounds of detention which is violative of Article 22(5).

¶232

Perusal of impugned order dated 22.12.1995 makes it clear that it is an order of detention simplicitor without disclosing the fact that whether grounds for

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detention have been formulated and signed by the Competent Authority and that whether it was served upon the detenu. Even there is no clarity that how such order has been served upon the detenu and how such fact was disclosed to the near relatives of the detenu.

¶236

On the contrary, what is stated in such order is quite clear that with a view to effectively deal with the emergency it was necessary to detain such detenu in exercise of powers confirmed under section 3(1) of the COFEPOSA, 1974 and thereby detenu be detained and lodged in Nasik road central prison. i.e. there is no ground or reason disclosed in the detention order itself that for which illegal activity or offence petitioner has been detained under the COFEPOSA when order simply reads that “petitioner is detained with a view to effectively deal with the emergency.”

¶237

It is undisputed fact that thereafter emergency has been declared as improper and unconstitutional and it was lifted with immediate effect which results into effect that any order passed by any such authority solely for the purpose of emergency then all such orders held as illegal and without jurisdiction. Therefore, in the present case, if order of detention of the petitioner is based solely to effectively deal with the emergency, then it is clear and certain that after revocation of order of detention suo motu by the government itself, on lifting of

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emergency, all other orders which were passed pursuant to emergency shall be treated as not only improper and illegal but null and void.

¶241

The revocation order dated 21.03.1977 specifically confirms that the State Government revokes the order of detention on its own and, therefore, in between two years there is no disclosure that why petitioner was detained.

¶242

However, unfortunately when father of the detenu has challenged the constitutional validity of the COFEPOSA and SAFEMA in Special Civil Application No.1788 of 1978 and when such petition was disposed of pursuant to the decision in the case of Amraltlal Pranjivan (supra) in 1994 , i.e. after more than 15 years and all of a sudden, respondents have issued another notice on 17.02.2000 i.e. after more than 24 hours of the original detention and even after 6 years from the order in Special Civil Application No.1788 of 1978 contending that the property namely; `Roshan Manzil' has been constructed by illegal funds. Though petitioner and there ancestor Usmangani has explained the availability of funds at his end by way of loan from different sources. However, the show cause notice dated 17.02.2000 specifically disclosed that unexplained amount is not more than Rs.77,501/- for the property worth Rs.5, 47,000/- and thereby the unexplained amount was less

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then 15%. The notice more or less explained the amount in details and orders by the income tax department which does not confirm that any amount is illegally acquired either by the detenu or by his relatives because it is only with reference to improper disclosure of accounting by different tax payers to the Income tax department but when such tax payers are relatives of the detenu, the Competent Authority has clubbed all such information so as to initiate SAFEMA proceedings against them.

¶246

It is undisputed fact that as already admitted by the Competent Authority in such notice dated 17.02.2000 that “order of revocation of the detention of Shri Nazir Ahmed dated 21.03.1977 was made pursuant to lifting of emergency on the same date and was not conscious revocation” . Therefore it is contended that revocation of the detention order would not be impediment to the proceedings under the SAFEMA. This is surprising stand taken by the Competent Authority, in as much as, now it is clear that there is no reason whatsoever assigned at the time of detaining the petitioner when it is simply stated that detention was to effectively dealing with the emergency and the order of revocation was pursuant to the lifting of emergency. Therefore, now it is clear fact on record that detention of the petitioner was solely because of emergency and not for any other reason or ground and, therefore, there is no

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question of initiating further proceedings under SAFEMA that too after couple of decades. However, the appellate authority has failed to appreciate such factual and legal issues by dismissing the appeal as per the impugned order dated 20.03.2001. It seems that tribunal has misconceived itself while considering Usmangani as a person within the meaning under 2(2)(b) of the SAFEMA. In view of revocation of order of detention pursuant to lifting of emergency when such later part was admitted by the appellate authority, it seems that the appellate authority has also failed to appreciate that when order of detention of co-detenu has been quashed by the High Court, there is no reason for the respondent to take the shelter of such order of detention, which was already revoked. The tribunal has also tried to scrutinize the accounting part half heartedly and observed that detenu and his relatives have failed in establishing that properties mentioned in the show cause notice under Section 6 and which are held by the relatives of the family are not illegally acquired property of the convict / detenu.

¶250

The respondent No.1 has filed affidavit in reply as back as in August 2001. The sum and substance of such reply so as to object the granting of any relief as prayed for by the petitioner is summarized as under:-

¶251

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reproduced which is already taken care of in foregoing paragraphs and therefore does not require any reproduction, except confirming that being a statutory authority having all the relevant papers at their command, the factual details are disclosed, probably in perfect manner so as to make a show that impugned orders are proper and legal. However, the legality of the order is to be determined by the Court since it is under challenge before the Court. And therefore, except bare factual details, the rest of the observation or comments cannot be relied upon as it is, only because it is so disclosed by the person in authority. Whereas the fact remains that the detention order does not disclose any reason or purpose for detention when it simply states that petitioner is detained with a view to effectively deal with the emergency and thereafter his detention has been revoked by the Government. However, in between the Competent Authority. under SAFEMA has initiated proceedings under SAFEMA which has resulted into present state of litigations. So far as history of proceeding between the parties are concerned, it is already on record and does not require repetition or reproduction.

¶254

[2] It is contented that the property namely 'Roshan Manzil' was acquired by the deceased father of the detenu from the illegally acquired money of the detenu. However, respondents have failed to realize that when such property was acquired by the deceased father

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of the detenu, the detenu was a young man of 20 years only, having no earning activities at all and thereby least scope of having illegally acquired money by him. For the period of detention, respondents are relying upon the period during which the proclamation of emergency remains in operation when it is pleaded that the maximum period of detention will depend upon the lifting of emergency, further contending that the order of detention was not made before the lifting of emergency. However, this is a false statement on oath. In fact, it is half truth in as much as the order of detention was made only with a view to effectively deal with the emergency on 22^nd December 1975 where as on 21^st March 1977 such order was revoked.

¶258

[3] It is contended that revocation order issued under Section 11 of SAFEMA is not covered by any contingencies provided under the provisions of Section 2 (2) (b) of the SAFEMA.

¶259

[4] The discussion in show cause notice regarding accounts has been reproduced which will be dealt with while discussing such details and determining such issue, just to avoid repetition and duplication of disclosing same facts.

¶260

[5] It is contended that detenu and petitioner has failed to discharge his burden cast upon them under

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Section 8 of the SAFEMA though sufficient opportunity was given. Without disclosing the factual details or evidence regarding nexus between the detenu and the forfeited properties, it is also contended that there is nexus between them. It is submitted as presumption and that too without evidence, smuggling activity was at peak during this period and youth were engaging themselves in smuggling activities.

¶264

In addition to above referred defense on merits, it is also contended by respondents, first admitted on record that they received a notice dated 3^rd May 2001 under Section 190 of the Daman and Diu Municipalities (Amendment) Regulations, 1999 issued by the Chief Officer of Daman and Municipal Council, Daman and addressed to the detenu endorsing a copy to the respondents' office whereby it was revealed that the property namely 'Roshan Manzil' was inspected by the Office of the Daman Municipal Council, Daman and it was found in ruin condition. Therefore, the owner/occupants of the said property were required to pull down or to secure or repair damages within 15 days. Therefore, though several actions were suggested, respondents have wisely prayed for prohibitory order against occupants of such premises to stay there and to take vacant physical possession of the property by him.

¶265

With such reply, respondents have annexed copy

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of Special Civil Application No. 1788 of 1978, perusal of which makes it clear that the petition was mainly challenging the Constitutional validity of the Constitution (14^th Amendment) Act, 1976, so also placing the SAFEMA in 9^th Schedule of the Constitution; with some ancillaries reliefs including prohibitory order against the respondents in proceeding further.

¶269

The record shows that this matter was initially decided by judgment and order dated 16^th April 2004 and by such judgment the co-ordinate bench of this High Court has allowed the petition in following terms:-

¶270

“46. For the foregoing reasons, this petition is allowed:-

¶271

46.1) The order of detention of the first petitioner dated 22/12/1975 passed by respondent No.3 and 4 herein u/S.3 of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 is quashed and set aside.

¶272

46.2) The proceedings u/S.6(1) of The Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 initiated against the petitioners, based on an order of detention dated 22/12/1975 and the consequential order dated 17/02/2000 passed by the Competent Authority u/S.7 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 forfeiting the property known as 'Roshan Manzil' is also quashed and set aside.

¶273

However, such judgment was challenged by the

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respondents in LPA No.127 of 2005 wherein by Consolidated judgment and order dated 18^th July 2014 with LPA No. 124 and 129 of 2005 on 18^th July 2014, the division bench of this Court has quashed and set aside such judgment dated 16^th April 2004 and remanded back the matter. Full details of such judgment is already explained hereinabove while recording the factual details of Special Civil Application No.6143 of 1999.

¶277

Whereas the petitioners have filed an additional affidavit in the month of April 2015 to bring on record certain facts which are as under:-

¶278

(A) The property namely 'Roshan Manzil' which is the subject matter of the petition is no more in existence and 'Roshan Manzil' has been demolished under the orders of this Court as well as the orders of the Daman Municipal Council, Daman which is out of the knowledge of the respondents,the Competent Authority under SAFEMA and that it was done with their approval only.

¶279

Since the property is no more in existence, the petition has become infructuous and request the Court to pass necessary orders in the interest of justice.

¶280

As a new building has already been constructed after getting the plan sanctioned by the Daman

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Municipal Council and it is sold out to various persons. The tenants of the 'Roshan Manzil' had tried to obstruct the demolition of 'Roshan Manzil' before the learned Civil Court with an application for temporary injunction. However, they could not succeed.

¶284

Unfortunately, even after such disclosure on oath on record, both the parties have argued the matter and submitted written submission also and therefore the Court has no option but to deal with such factual details in detail as recorded herein above.

¶285

In support of their stand, petitioner has filed further affidavit dated 25.4.2018 inter alia disclosing on oath that 'Roshan Manzil' has been demolished by virtue of the orders passed by the Municipality with the concurrence of SAFEMA authorities since it was in dilapidated condition and that through mistake, it has been mentioned that since the property has been demolished, the Write Petition has become infructuous making a precise statement that what was meant was that the order of forfeiture no more survives since the property does not survive and that should be read as corrected as such. It is further stated that since ground of detention has not been formulated then the detention order itself shall be vitiated and it will be a void order. Therefore, no SAFEMA proceeding can be based on that and demolition of the `Roshan Manzil' has become

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academic.

¶288

In support of all such submissions, petitioner is relying upon the decision in the case of N.D. Choksi v. Competent Authority reported in 1992(2) GLR 891 wherein relying upon the decision of Hon’ble Supreme Court of India, in the case of Krishna Murari reported in AIR 1975 SC 1877 , it was held that it is mandatory to formulate the grounds and if the same is not done, the order of detention will be vitiated and SAFEMA proceeding cannot be passed on such ground of detention. It is also submitted that similar view is taken by Division Bench in Special Civil Application No.331 of 1992 in judgment dated 12.4.1992 that if the grounds of detention are not formulated, the detention order will be vitiated and SAFEMA proceedings cannot be initiated. Similar view is also taken in the decision between Aayeshaben Nur Mohamaad v. Competent Authority reported in 2004(2) GLR 1431 .

¶289

It is also submitted that pursuant to the decision in the case of Karima Bagad reported in 1998(6) SCC 264 , the valid order of detention is a condition precedent for even initiating the SAFEMA proceeding and, therefore, when detention order is vitiated, SAFEMA proceedings cannot lie.

¶290

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¶292

It is undisputed fact that now pursuant to today’s judgment and decision in Special Civil Application No.6143 of 1999 when order of detention of Nazir Ahmed Usmangani Digmar is quashed and set aside, the SAFEMA proceeding against his relatives would not survive. It would be appropriate to make it clear that submission and citations recorded hereinabove are applicable while deciding the Special Civil Application No.6143 of 1999 and, therefore, it should be read accordingly.

¶293

In addition to what is discussed hereinabove, reference to the case of Domnic Alex Fernandes v. Union of India reported in 2017(9) SCC 489 is relevant just to show that the contention of the respondent that there is no option but to forfeit all the properties once notice under SAFEMA is issued is not correct, inasmuch as, now it is held that the right of a bonafide tenant in a property will not stand automatically terminated by forfeiture of such property and vesting thereof in the Central Government. While holding so, in such recent judgment dated 17.8.2017, the Hon'ble Supreme Court has already considered the observation of para 44 of Attorney General of India (Supra) so also the cases between Fatima Mohd. Amin v. Union of India reported in 2003(7) SCC 436, P.P. Abdulla v. Competent Authority reported in 2007(2) SCC 510 and Aslam Mohammad Merchant v.

¶294

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¶296

Competent Authority reported in 2008(14) SCC 186 .

¶297

It is undisputed fact that property in question is hold by the tenants who have already preferred separate petition being Special Civil Application No.3732 of 2002, details of which are discussed herein below.

¶298

SPECIAL CIVIL APPLICATION NO. 3732 OF 2002

¶299

This petition is preferred by 'Roshan Manzil Tenants Association' through it's President. However, it is to be recollected here, as recorded while recording the factual details with reference to Special Civil Application No.4348 of 2001 that such 'Roshan Manzil' building has already been demolished and new building at that place has already been constructed and it is sold out to different owners and therefore petitioner of such Special Civil Application No.4348 of 2001 has disclosed that petition has become infructuous. In view of such disclosure, even this petition would also become infructuous. However, both the sides have argued such matters and called for the final determination and hence this exercise.

¶300

The petitioner is an association of tenants of 'Roshan Manzil' wherein few tenants are having tenancy rights of shops whereas few members are residing in residential part of the same building as tenants. The list

¶301

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¶302

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¶303

of tenants is attached with the petition as Annexure A. Such tenants were holding the property for more than 30 years at the time of filing the petition that is prior to coming into force of the SAFEMA. They are paying rent regularly to such landlord and no proceedings of eviction are pending against them. After landlord fails to pay several dues to the Income Tax Department, the Income Tax Department was collecting rent from them.

¶304

Pending litigation between the detenu and his relatives with the Competent Authority, it seems that one Civil Application No.11380 of 2001 has been preferred in Special Civil Application No.4348 of 2001 by the Competent Authority seeking permission of the Court to allow them to evict the tenants from the premises in question and to demolish the building namely 'Roshan Manzil' .

¶305

However, on 19^th October 2001, the Court has granted limited relief permitting the Competent Authority to take action including eviction against the tenants in accordance with law with observation that if Competent Authority spends any amount for preservation or demolition of the property, if required, the same will be subject to the outcome of the main Special Civil Application. Based upon such interim relief the Competent Authority has issued notice for eviction, Therefore, the tenant association has no option but to

¶306

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¶307

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prefer this petition by challenging the eviction notice dated 18^th February 2002, copy of which is produced at Annexure 'AA'. Such notice was addressed to as many as 26 occupants who are before this Court through their association as petitioner in the present petition. The petitioner has also sought declaration that order of forfeiture in SAFEMA is also illegal, with ancillary relief as well as interim relief to set aside the operation of eviction notice and order dated 18^th February 2002.

¶309

Based upon above referred factual details and legal grounds, the petitioner has also taken following stand while challenging the impugned notice:-

¶310

[A] It is contended that order of Special Civil Application No.11380 of 2001 is the result of collusion between the landlord and Competent Authority so that they may get possession of the properties and thereby when landlord succeeds in his petition, he gets back the possession without following the due process of law under the Rent Act. However, there is no substance in such submission in as much as the further development in the matter whereby the new construction has been carried out by demolishing the old premises and selling it to several persons makes such allegations baseless.

¶311

[B] However, it is contended that in any case such activity cannot be permitted by the Court because

¶312

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¶314

Court has permitted the respondents to take steps in accordance with law and not in illegal and improper manner.

¶315

[C] Even if property is forfeited under Section 7, the Government has to take the properties subject to tenancy of the members of the petitioner's association and that it is mandatory to issue a notice to the person who is affected by such order both under Section 6(2) and 7 and that since it is admitted position that members of the petitioners' association are holding the property from whom possession has been taken then they are required to be heard without fail and that too after giving 30 days notice. The tenancy was prior to the SAFEMA coming into force. Therefore, no eviction can be ordered of such tenant without following due and lawful procedure which may be under appropriate statutory provisions or under the Civil Law that is Rent Act. Such notice were never issued and lawful procedure has never been followed. Order of detention had already been revoked and therefore SAFEMA proceedings cannot be continued and thereby possession cannot be taken from the petitioner.

¶316

The sum and substance of petitioner's case and reasons for allowing petitions are summarized as under:-

¶317

[A] The members of the petitioner association

¶318

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¶320

being tenants who are affected by the orders of the Competent Authority as well as by this high Court have not been heard before passing any such order or giving direction to take away their possession.

¶321

[B] The petitioner association remained thoroughly unrepresented which results in making them homeless and business-less though they are occupying the premises for more than 30 years even without offering a reasonable opportunity to them and thereby practically even without verifying before passing the order of forfeiture that where property is held by the person against whom such order of forfeiture is passed.

¶322

[C] Since members of the petitioner are affected, they are required to be heard before passing impugned orders.

¶323

[D] The impugned notice as well as order of forfeiture are bad and illegal in view of the fact that as per provisions of Section 19(1) of the SAFEMA, the Competent Authority requires 30 days notice whereas impugned notice was given with a direction to evict the premises in 15 days. It is specifically averted that in the event the forfeiture order stands valid, then the members of the association may be continued as the tenants of Union of India on such terms and conditions as are applicable to them under the conditions of the tenancy.

¶324

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¶325

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¶326

[E] The Court has never directed the Competent Authority to take away the possession but has merely and clearly stated that if it is permissible under law by following lawful process possession may be taken. Therefore, before taking possession the notices are required to be issued under Section 19(1) of the SAFEMA which is not done. Therefore, the whole notice is illegal.

¶327

[F] The factual details of the detention of the landlord and proceeding against him are already disclosed in previous petition and therefore it's reproduction is avoided.

¶328

[G] Proceedings under SAFEMA cannot survive, since detention order was revoked on 21.03.1977 i.e. before the expiry of period of detention that when detention itself was revoked, no proceedings under the SAFEMA can be initiated relying upon following decision;

¶329

[1] Ibrahim Bachu vs. State of Gujarat reported in AIR 1985 SC 697

¶330

[2] ND Choksi vs. Union of India reported in 1992 (2) GLR 891

¶331

[3] Unreported Judgment of Bombay High Court dated 23.02.1981 in Criminal Application

¶332

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¶333

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¶334

No.1320 of 1975

¶335

[4] GK Goswami vs. ST Pillai

¶336

[5] Dhanika vs. The Competent Authority reported in 233 ITR 26

¶337

[H] There was considerable lapse of time between notice upon Usmangani, which is dated 04.12.1976 and order of forfeiture is dated 17.02.2000 i.e. 24 years. Because by lapse of time, it was impossible for the petitioner to establish that Usmangani has acquired funds for constructing the building and that such fund was not illegal fund.

¶338

[I] There is no nexus between activities of detenu and the acquired property and no link was established between detenu and the property except that property is hold by the father of the detenu and that at the time of construction of building in the year 1986 by the father of the detenu, the detenu was only 20 years of age and, therefore, when he was not having any earning or other activity, it cannot be said that illegal funds of the detenu was used by his father for constructing the building.

¶339

In view of above facts and circumstances, when property namely; `Roshan Manzil' was occupied by petitioners of Special Civil Application No.3732 of 2002 considering the recent judgment of Hon’ble Supreme

¶340

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¶342

Court of India, SAFEMA proceedings would not disturb their rights and pursuant to quashing the detention order of Nazir Ahmed Usmangani Digmar, even SAFEMA against his relatives would not survive. Therefore, these petitions are allowed as prayed for.

¶343

Sd/- (S.G. SHAH, J.)

¶344

VATSAL S. KOTECHA

¶345

Page 53 of 53

Nazir Ahmed Usmangani Digmar v. Competent Authority

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Nazir Ahmed Usmangani Digmar v. Competent Authority

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