A COFEPOSA detenu and his two wives challenged the Section 6(1) notices and the forfeiture of their properties under SAFEMA. The Court upheld the notices as valid, held there was no violation of natural justice in not supplying a statement of the detenu, found the properties not proved to be licitly acquired, and dismissed the writ petitions.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED :- 03 -1-2014
CORAM:
THE HONOURABLE MR.JUSTICE K.RAVICHANDRABAABU
W.P.Nos.16341, 16342 and 16343 of 2000
Smt.Rukhiya ... Petitioner in W.P.No. 16341 of 2000 K.P.Abdul Majeed ... Petitioner in W.P.No. 16342 of 2000 Smt.P.K.Umaiba ...Petitioner in W.P.No. 16343 of 2000 Versus 1. The Registrar The Appellate Tribunal for Forfeited Property, 4th Floor Lok Nayak Bhawan, Khan Market New Delhi 100 002. 2. The Competent Authority Smugglers & foreign Exchange Manipulators (Forfeiture of Properties) Act, 1976 Utsav, No.1, 64/1 G.N.Chetty Street Chennai 17. ... Respondents in all W.Ps Prayer: Writ Petition in W.P.No.16341 of 2000 filed under Article 226 of the Constitution of India for the relief of issuance of writ of certiorari to to call for the records of the first respondent in his proceeding dated 19.5.2000 made in FPA No: 87/MDS/96 dated 28.8.2000 and quash the same.
Writ Petition in W.P.No.16342 of 2000 filed under Article 226 of the Constitution of India for the relief of issuance of writ of certiorari to call for the records of the first respondent in his order dated 19.5.2000 made in FPA No: 89/MDS/96 and quash the same.
Writ Petition in W.P.No.16343 of 2000 filed under Article 226 of the Constitution of India for the relief of issuance of writ of certiorari to call for the records of the first respondent in his order dated 19.5.2000 made in FPA No: 88/MDS/96 and quash the same.
For Petitioners :- Mr.B.Kumar
Senior Counsel for Mr.S.Ramachandran for M/s.B.Satish Sundar
For Respondents :- Mr.N.Ramesh for R2
O R D E R
In all these writ petitions the petitioners are aggrieved against the action taken under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 ( herein after called as "the Act").
competent authority, the petitioners filed separate appeals to the Tribunal viz., the first respondent herein. On 19.5.2000 the Tribunal dismissed all the three appeals. Thus aggrieved against the same the present writ petitions were filed.
The petitioner is a person as per the definition of Section 2 (a) of the Act. The notice under Section 6(1) was issued on 18.2.1986 after receiving the letter from the Government of Kerala where he was detained under COFEPOSA. The supplementary notice dated 29.11.1990 was issued after receiving the details from the Inspector of the second respondent Office at Calicut vide his report dated 5.11.1990. In the instant case, the relevant details submitted by the competent authority are borne out by records. All those information and materials need not be stated in the 6(1) notice and it is enough if the competent authority has sufficient information or materials available with him to arrive at a reasonable belief. Disclosure of such sources of information is legally prohibited. The details of information and materials which are not prohibited alone can be provided to the petitioner. This has been meticulously stated in both the notices. In W.P.Nos. 8876 and 8877 of 2000 the petitioner has raised the very same ground that no reasons were recorded under Section 6(1) notice. This Court by an order dated 19.8.2010 rejected the said contention by holding that the competent authority has clearly recorded the reasons for his belief. The reasons recorded in writing means that it is enough if the competent authority clearly states in his notice that the petitioner is a person and he has acquired properties and such acquisition of properties is a result of the earnings from the smuggling activities and consequently those earnings are nothing but illegal sources of income. Even though the second notice was termed as supplementary it is an independent notice in respect of the property referred in the said notice. Further regarding notice dated 18.2.1986 action was dropped. Section 6(1) notices can be issued any time whenever illegally acquired properties are detected.
The reasons recorded in writing under Section 6(1) notices as regards the wives is not valid as the notices have not expressly stated that the money for the acquisition of the properties by them have flown from the detenu viz., K.P.Abdul Majeed. A valid notice under Section 6(1) is a condition precedent for initiation of proceedings. Therefore, the competent authority has no jurisdiction to enter into the merits of the case.
7.4. He further relied on the decision reported in 2007 (2) SCC 510 ( PP Abdulla Vs. Competent Authority) to contend that the reasons recorded in writing must be produced before the Court to enable the court to assess its validity. He also relied on the decision reported in 2008 (14 ) SCC 186 (Aslam Mohammed Merchant Vs. Competent Authority) to contend that the Hon'ble Supreme Court has finally settled the apparent differing view expressed in Fathima Amin case and Kesar Devi Case reported in (2003 (7) SCC 427).
He relied on the above decision further to contend that there must be an allegation that the property was acquired by the relative from and out of illegally acquired funds of the detenu.
Section 6(1) notice issued on the petitioner had mentioned only one property by saying that the source of investment is not known and as the husband of the petitioner herein was indulging in smuggling activities and that it had to be considered that the funds for the investment had emanated from illegal sources. Such reasons are wholly invalid and it amounts to holding a rowing enquiries which are not permitted in law. Even in respect of notice dated 29.11.1990 issued to the petitioner herein, it was not mentioned that the funds for acquisition had flown from the detenu.
Section 6(1) notice mentioned two properties by stating that the source of such investment was not known and the husband of the petitioner herein had been indulging in smuggling activities and therefore it has to be considered that the investment had emanated from illegal source. Such reasoning is invalid. It is not alleged that the properties are the benami properties of the detenu.
The petitioner was a detenu under the COFEPOSA Act and the first notice under Section 6(1) was issued to him on 18.2.1986. The said notice mentioned a property wherein the detenu was having one sixth share only. The said notice was invalid since no value of the property was given therein and it did not mention anything about his earnings. A supplementary notice was issued on 29.11.1990 wherein 13 properties were mentioned. This notice is also invalid as it does not satisfy the requirement of law and it does not mention anything about the income and earnings of the petitioner. Thus the law laid down in Aslam Mohammed Case and R.Ramakrishnan case has been violated. The writ petitioners as appellants before the Tribunal sought to lead additional evidence in the form of a Certificate from the employer of K.P.Abdul Majeed at Dubai to prove that they had indeed made remittances to the NRI account. The Tribunal did not consider the same. In this regard, the learned Senior Counsel relied on the decisions reported in AIR 1957 SC 882 (Union of India Vs. T.R.Varma) and AIR 1999 SC 2169 (Sahi Ram Vs. Avtar Singh and Others)
11.1. The validity of Section 6(1) notice was never challenged either before the competent authority or before the appellate authority. It is not the case of the petitioners that no reasons were recorded but the reasons recorded were not sufficient. The value of the properties, known sources of income of the relative/holder of the properties and other information were considered and stated in the notice. Thus, all the requirements of law were considered and followed while issuing notice under Section 6(1) of the said Act. It is an admitted case of the wives before the authorities and also in their affidavit filed before this Court that money has flown from the detenu/ husband and the properties were not purchased out of their independent earnings. The reasons recorded are subjective satisfaction of the competent authority. Sufficiency of reasons recorded can not be gone into by this Court while exercising jurisdiction under Article 226 of the Constitution of India.
11.2 The connecting link is required only in cases where the properties stood in the name of the wives individually acquired from their individual income as found in the decision reported in 1994 (5) SCC 54 (Attorney General for India Vs. Amratlal Prajivandas). In the present case all the properties are in the joint name of the detenu and his wives. Kesar Devi case reported in 2003 (7) SCC 427 is in conformation with Attorney General case. The decisions relied on by the petitioners reported in 2003 (7) SCC 436 ( Fatima MOhd. Amin Vs. Union of India); 2007 (2) SCC 510 (P.P. Abdulla and Another vs. Competent Authority and Others); are not applicable to the present case as they are distinguishable on facts.
11.3 The first notice was issued on 18.2.1986 to K.P. Abdul Majeed and his wife Umaiba and no notice was issued to the other wife Rukhiya as she was not married at that time. The reply submitted by the petitioners to the first notice was accepted and the properties thereunder were released. The second notices were issued on 21.11.1990 to all the petitioners. The properties mentioned in the second notice were different from first notice and they were admittedly purchased, after issuance of first notice, between 1986 to 1989. In the second notice issued to Abdul Majeed and Umaiba it was mentioned as supplementary notice. But no such mention was made in the notice issued to Rukhiya. This was done only to remind them that there was a prior notice in respect of those two persons. The caption "supplementary" cannot make the second notice supplement to the first notice in the absence of any such purpose of supplementing the first notice. Nature of notice cannot be decided by its nomenclature and only the contents of the documents are relevant. The second notice is independent notice, in respect of other properties with separate reasons recorded.
11.5 The detenu was a known smuggler. Many detention orders were clamped against him for his repeated indulging in smuggling activities during 1984 to 2005. The money earned by violation of law in India are transmitted out through hawala transaction and sent back by way of NRE account. The detenu must prove his legal source. Section 21 of the said Act contemplates that the findings rendered under the other laws are not conclusive for proceeding under SAFEMA. Therefore, the acceptance of returns by the Income or Wealth Tax Assessing Officer has no relevance as held by the Division Bench of this Court in a decision reported in CDJ 2011 MHC 3203 (DB) = 2011 (3) CTC 345 (The Competent Authority Vs. Hameed Abdul Kader and Another).
of the prejudice caused to him by not supplying the said statement. The petitioners failed to show the nature of the prejudice.
11.7. The decision reported in AIR 1996 (SC) 1669 ( State Bank of Patiala Vs. S.K.Sharma ) is relied on by the learned counsel for the respondents to contend that mere non-supply of documents will not amount to violation of principles of natural justice where there is substantial compliance of the same and where no prejudice is caused on account of it.
11.8. He further contends that the judgment made in Kesar Devi case confirms and in consonance with the Attorney General case. The other three subsequent decisions viz., Fatima Mohd Amin ; P.P.Abdulla; Aslam Md. cases are rendered by the Benches comprised of lesser number of Judges. The law laid by the Constitution Bench at paragraph 44 that the burden or disproving the connecting link between those properties in the name of the relative and the detenu is upon the relative/ associate still holds the field. The nexus need not be established where the property concerned is that of the detenu himself. The said nexus is required to be established only when the property is held benami in the name of any other person or relative. Therefore, the decision made in Attorney General case alone is to be applied and followed in these cases.
14.1 Section 2 of the said Act deals with its Application. As per the said provision, the said Act shall apply to "every person" who has been convicted under the Customs Act of an offence in relation to goods of a value exceeding one lakh rupees ; or convicted under the Foreign Exchange Regulation Act for an offence involving the amount exceeding one lakh rupees and "every person" in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, provided that such detention order has not been revoked or set aside by a Court of competent jurisdiction. "every person" who is a relative of a person referred to in clause (a) or clause (b) of Section 2(2); "every associate" of a person referred to in clause (a) or clause (b) of Section 2 (2); any holder of any property which was previously held by a person referred to in clause (a) or clause (b).
14.2. Explanation 2 to Section 2 defines the term"relative". Explanation 3 defines the term "associate".
14.3. Section 3 (1)(c) defines the term "the illegally acquired property" as follows:-
"(i) 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; or
(ii) 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 in respect of which any such law has been contravened; or
(iii) 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 the source of which cannot be proved and which cannot be shown to be attributable to any act or thing done in respect of any matter in relation to which Parliament has no power to make laws ; or
(iv) any property acquired by such person, whether before or after the commencement of this Act, for a consideration, or by any means, wholly or partly traceable to any property referred to in sub-clauses (i) to (iii) or the income or earnings from such property; and includes -
A) any property held by such person which would have been, in relation to any previous thereof, illegally acquired property under this clause if such previous holder had not ceased to hold it, unless such person or any other person who held the property at any time after such previous holder or, where there are two or more such previous holders, the last of such previous holders is or was a transferee in good faith for adequate consideration;
B) any property acquired by such person, whether before or after the commencement of this Act, for a consideration, or by any means, wholly or partly traceable to any property falling under item (A), or the income or earnings therefrom;"
14.4. Section 6 deals with the issue of notice of forfeiture which reads as follows:-
"6. Notice of forfeiture
(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 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.
(2) Where a notice under sub-section (1) to any person 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.
14.5. Section 7 deals with forfeiture of property by the competent authority . Section 8 deals with burden of proof which is extracted hereunder:-
"8. Burden of proof :- 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. "
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) requisitioning any public record or copy thereof from any Court of office;
(e) issuing commissions for examination of witness or documents; (f) any other matter which may be prescribed.
14.7. Section 18 empowers the competent authority to conduct any inquiry or investigation or survey in respect of any person, place, property ,assets, documents, books of account or any other relevant matters for the purposes of any proceedings under the said Act or any initiation of any such proceedings.
properties" and as against the procedure adopted by the competent authority in forfeituring those properties from the hands of the petitioners.
a) The competent authority did not expressly state that the money for acquisition of the properties have flown from the detenu.
b) The reasoning stated in the said notice, that husband has been indulging in smuggling activities and therefore the investment has emanated from illegal source, is insufficient.
c) It must state that wives have no independent income.
d) A nexus must be shown between the detenu and the illegally acquired property.
"25. The core question which, therefore, arises for consideration is what are the statutory requirements for initiating a valid proceeding. INTERPRETATION
source of income, earning or assets, (iii) Any other information or material made available as a result of a report from any officer making an investigation under Section 68-E of the Act or otherwise.
When the aforementioned conditions are satisfied, the competent authority would be entitled to issue a show cause notice, if he has reason to believe, wherefore reasons are to be recorded in writing that the properties are illegally acquired properties. "
"31. Once the notice to show cause is found to be satisfying the statutory requirements which are condition precedent therefor, a valid proceeding can be said to have been initiated for forfeiture of the property. Only in a case where a valid proceeding has been initiated, the burden of proof that any property specified in the notice is not illegally acquired property, would be on the `person' affected.
"38. It is, however, beyond any doubt or dispute that a proper application of mind on the part of the competent authority is imperative before a show cause notice is issued.
reason to believe' and recording of reasons' must be premised on the materials produced before him. Such materials must have been gathered during the investigation carried out in terms of Section 68-E or otherwise. Indisputably therefore, he must have some materials before him. If no such material had been placed before him, he cannot initiate a proceeding. He cannot issue a show cause notice on his own ipse dixit. A roving enquiry is not contemplated under the said Act as properties sought to be forfeited must have a direct nexus with the properties illegally acquired.To come to such conclusion, the Apex Court has found that the show cause notices issued therein did not contain any reason so as to satisfy the requirements of Section 68H (1) of the NDPS Act.
"Shri Kundirikkal Parambil Abdul Majeed was a detenu under the COFEPOSA Act and thus a person within the meaning of section 2(2)(b) of the SAFEM (FOP) Act, 1976. Accordingly, proceedings under the SAFEM (FOP) Act, 1976 were initiated in his case on 18.2.1986 by issue of notice under Section 6(1) of the Act. However, on further enquiries, it is seen that Shri Kundirikkal Parambil Abdul Majeed has acquired, in addition to the properties already covered by notice under Section 6(1) dated 18.2.1986, the following properties in his own name or jointly with his relatives:-
(i) 48 Cents of garden land in R.S.21-9-183/185 pt. in Panniyankara Amsom Desom purchased as per document No. 2306/86 dt. 25.8.86 for Rs. 38,400/_ Own Name (ii) 48 cents of garden land in R.S.21-9-183/184/185 in Panniyankara Amsom Desom purchased as per document No. 2768/86 dt. 13.6.86 for - doRs. 43,200/-
(iii) 35 cents of Garden land inR.S.21-26-699 in Paniyankara Amsom Desom purchased as per - dodocument No.1486/86 dt. 27-5-86 for Rs.35,000/-
(iv) 793/8 cents of garden land in R.S.59-1 in Jointly held Panniyankara Amsom Desom purchased as by the AP with per document No. 562/89 dt. 23-2-89 for his wife Smt. Rs.97,500/Umaiba. (v) Business assets – lodging house- Everest Lodge Kallai, purchased as per document No.2884/89 dt. 27-10-88 (Rs.1,70,000) document No.3183 dt. 5.12.88 (Rs.3,40,000), document No.15/89 - Own dt. 2.1.89 (Rs.2,55,000), including cost of stamp Name paper etc.,
(vi) 19.80 cents of land in R.S.No.5-2 in Vengeri Jointly held Amsom, Calicut, purchased as per document by the APNo.2642/87dt.16-10-87for Rs. 47,520/- with his wife Smt. Umaiba.
(vii) 13.05 cents of land in R.S.No.5-2 in Vengeri Amsom, Calicut, purchased as per document -doNo. 2677 dt. 21-10-87 for Rs. 48,285/-
(viii) Residential building under construction in the above plots (amount so far spent upto -do31.3.89 Rs.2,25,000)
(ix) Residential building at Beach Road, Jointly held purchased on 3.12.1988 by the AP as per document No.2487/88 with his wife for Rs. 2,75,000/-. Smt. Rukhiya
(x) 11 cents of garden land in Chevayoor in Jointly held R.S.No. 122/1 as per document No. 4960/87 by the AP dated 14.12.87 for Rs. 11,000/-. with his wife Smt. Rukhiya
(xi) 4 rooms with upstairs (Building No. Jointly held by the 10/17/18 19 of Calicut Corporation at AP with his S.M.Street, Calicut in S.No.69/1A, 1C and brother Shri R.S.No.10-2-39 of Nagaram Amsom of K.P. Abdul Khader Calicut District purchased on 7.12.1988 value Rs.8 lakhs.
(xii) 14 cents of coconut garden in R.S.No. 21-28-731 of Panniyankara Village of Calicut, -dovalue Rs. 56,000/-
(xiii) 1.20 acres of coconut garden in R.S.No. 21-28-731 of Panniyankara Village of Calicut -doDistrict - value Rs. 5 lakhs.
In view of the fact that the affected person has been indulging in smuggling activities, the acquisition of the abovesaid properties is to be considered as having arisen out of his illegal sources of income. They are, therefore, liable for forfeiture under the provisions of Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. Accordingly, I have reason to believe that this is a fit case to issue supplementary notice under section 6(1) of the SAFEM (FOP) Act, 1976 to Shri Kundirikkal Parambil Abdul Majeed in respect of the above mentioned properties. "
"Smt.P. Umaiba, is the wife of shri Kundirikkal Parambil Abdul Majeed, a person detained under the COEPOSA Act. She is , therefore, a 'relative' within the meaning of clause (i) of Explanation 2 to Section 2(2) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. Accordingly, proceedings under the SAFEM (FOP), Act, 1976 were initiated in her case on 18.2.86 by issue of notice under section 6(1) of the Act. However, on further enquiries, it is seen that the affected person Smt.P.K.Umaiba has acquired, in addition to the properties already covered by notice under Section 6(1) dated 18.2.1986, the following properties in her own name or jointly with her husband :-
(i) 34 cents of land with Godown at Nagaram - Own name Amsom, Kozhikodeu, purchased as per document No. 365/89 dated 22.2.89 for Rs.1,60,000/-.
(ii) 793/8 cents of garden land in R.S.59-1 in - Jointlyheld Panniyankara Amsom Desom purchased as per by the AP with document No. 562/89 dt. 23.2.898 her Husband Shri. for Rs.97,500/-. K.P.Abdul Majeed
(iii) 19.80 cents of land in R.S.No. 5.2. in Vengeri
Amsom, Calicut, purchased, as per document No. 2642/87 dt. 16.10.87 for Rs.47,520.
(iv) 13.05 cents of land in R.S.5.2 in Vengeri -do-
Amsom Calicut, purchased as per document No.2677 dt. 21.10.87 for Rs.48,285/-
(v)Residential building under construction
-do-
in the above plots (amount so far spent upto 31.3.80 Rs.2,25,000).
In view of the fact that Shri Kundirikkal Parambil Abdul Madjeed, her husband, has been indulging in smuggling activities, the acquisition of the above said properties is to be considered as having arisen out of illegal sources of income. They are, therefore, liable for forfeiture under the provisions of SAFEM (FOP) Act, 1976. Accordingly, I have reason to believe that this
is a fit case to issue supplementary notice under Section 6(1) of the SAFEM (FOP) Act, 1976 to Smt. P.K.Umaiba in respect of the above mentioned properties. "
"Mrs. Rukhiya is the wife of Shri Kundirikkal Parambil Abdul Majeed, a person detained under the COFEPOSA Act. She is, therefore, a 'relative' within the meaning of clause (i) of Explanation 2 to Section 3(2) of the SAFEM (FOP) Act, 1976. She is found to have acquired the following properties jointly within her husband :-
(i) Residential Building at Beach Road, purchased on 3.12.1988 as per document No.2467/88 for Rs. 2,75,000/R.S.No. 1.12.474.
(ii) 11 Cents of Garden land in Chevayoor in R.S.122/1 (Half share) purchased on 14.12.87 as per document No.4960/87 for Rs. 11,000/-.
The sources of this investment is not known. As the husband of Smt.Rukhiya has been indulging in smuggling, it has to be considered that the investment has emanated from illegal sources. I am thus satisfied that this is a fit case for issue of notice under Section 6(1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 for the properties mentioned above. "
1986 to 1989 i.e. after the period of detention. Thus, the competent authority having found that those properties were acquired after the period of detention in the name of the detenu or jointly with his wives and his brother, has issued the notice under Section 6(1) by recording the reasons as stated supra.
satisfaction of the competent authority and not to the satisfaction of the person affected. In other words, if the competent authority has reasons to believe that the properties under dispute were acquired out of illegal sources of income such satisfaction is enough to all upon the concerned person to show cause. Insufficiency of the reasons recorded is different from no reasons recorded. Whether reasons stated in the notice would satisfy the requirement is the question not for this Court to go into it, as the same is the subjective satisfaction of the competent authority.
"43. .... We can take note of the fact that persons engaged in smuggling and foreign exchange manipulations do not keep regular and proper accounts with respect to such activity or its income or of the assets acquired therefrom. If such person indulges in other illegal activity, the position would be no different. The violation of
foreign exchange laws and laws relating to export and import necessarily involves violation of tax laws. Indeed, it is a well-known fact that over the last few decades, smuggling, foreign exchange violations, tax evasion, drugs and crime have all got mixed-up. Evasion of taxes is integral to such activity. It would be difficult for any authority to say, in the absence of any accounts or other relevant material that among the properties acquired by a smuggler, which of them or which portions of them are attributable to smuggling and foreign exchange violations and which properties or which portions thereof are attributable to violation of other laws (which Parliament has the power to make). It is probably for this reason that the burden of proving that the properties specified in the show-cause notice are not illegally acquired properties is placed upon the person concerned. ...
"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 over-breadth, as it may be called a case of excessive regulation. It is submitted that the relatives or associates of a person falling under clause (a) or clause (b) of Section 2(2) of SAFEMA may have acquired properties of their own, may be by illegal means but there is no reason why those properties be forfeited under SAFEMA just because they are related to or are associates of the detenu or convict, as the case may be. It is pointed out that the definition of 'relative' in Explanation (2) and of ,associates' in Explanation (3) are so wide as to bring in a person even distantly related or associated with the convict/detenu, within the net of SAFEMA, and once he comes within the net, all his illegally acquired properties can be forfeited under the Act. In our opinion, the said contention is based upon a misconception.."
"43. The Competent Authority in its show cause notice, very clearly stated that the property was purchased with the unexplained money. The relationship of the second respondent with the detenu was also indicated in the show cause notice. Therefore, the word "unaccounted money" as indicated in the show cause notice, was used only with reference to the money contributed by the detenu under COFEPOSA. Since the Competent Authority clearly indicated the reasons for taking action under SAFEMA, naturally burden of proof shifted on the First Respondent to prove that the property was not illegally acquired property. ..... ...... .....
orders passed by the Statutory Authorities."
Thus, from the reading of the above decisions, it could be seen that the notice issued under Section 6(1) is in accordance with law and does not vitiate the proceedings.
"4. .... To substantiate the contention that PA1 went abroad and made his earnings there, he has produced photo copies of his passport J518769 issued on 16.06.73, which was valid upto June, 1983. PA1 also furnished a coy of another passport U086552 dated 23.04.83 issued at Dubai and valid upto
22.04.1988. A scrutiny of the departure and arrival entry indicates that PA1 had last visited Dubai on 10.01.84 and returned back on 14.01.84. Thereafter, there have been no arrival and departure entries in the passport. This indicates that ever since January, 1984, PA1 had not gone to Dubai. This being the position, it is apparent that during the period of remittances from abroad i.e. 06.05.86 to 28.05.92, as indicated herein above, PA1 was not employed in Dubai but was available only in India. The obvious conclusion is that the remittances have been made not from his own earnings made at Dubai."
The doubtful nature of the transaction and the manner in which the sums were found credited in the books of accounts maintained by the assessee have been duly taken into consideration by the authorities below. The transactions though apparent were held to be not real ones. May be the money came by way of bank cheques and paid through the process of banking transaction but that itself is of no consequence."
"50. The First Respondent has shown the loan amount in his income tax returns and that was accepted by the Income Tax Department. Mere acceptance of the said return would not absolve the First Respondent from his liability to prove the acquisition of property inasmuch as the burden is on him to demonstrate that the property was not illegally acquired SAFEMA nowhere provides that the Competent Authority is bound by by the Income -tax returns submitted by the person against whom action was taken. These two enactments operate in two different fields. The authorities under SAFEMA are at liberty to take the assistance of the Customs Department, Central Excise Department, Income Tax Department, Police Department and all offices of Central or State Government for the purpose of deciding the proceedings initiated under the said Act. Section 18 gives an option to the Competent Authority to conduct enquiry or survey in respect of any person, place, property or any other relevant matters through the authorities under the Income- tax Act. However, that does not mean that a duty is cast upon the Competent Authority to refer the matter at all time to the Income tax Department. The learned Single Judge proceeded on the basis that the failure on the part of the Competent Authority to invoke Section 18 vitiated the ultimate order passed by him. With respect, we are not in agreement with the said view. The provisions of SAFEMA does not contain any indication that assessment orders passed by the income authorities would constitute sufficient proof regarding the legal nature of the acquisition of property. When the burden is on the concerned person to prove that the property
was not acquired with the tainted income, necessarily, he should produce materials to prove his source of money.
krr/
SD /- Asst. Registrar /True Copy/ Sub Asst.Registrar To 1. The Registrar The Appellate Tribunal for Forfeited Property, 4th Floor Lok Nayak Bhawan, Khan Market New Delhi 100 002.
Pre-Delivery Order in W.P.Nos.16341,16342 and 16343 of 2000 SJ(CO) SD 21/01/2014
3 issues framed by the court
Whether the notice issued under Section 6(1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 was valid and sustainable in law?
Whether the proceedings were vitiated by violation of the principles of natural justice on account of non-supply of the statement of the detenu dated 6.2.1984?
Whether the composite order passed by the competent authority under Section 7(1) and the Appellate Tribunal's order under Section 12 called for interference?
Colour shows how this judgement treated each authority
Attorney General for India Vs. Amratlal Prajivandas and OthersRelied on¶39
AIR 1994 SC 2179 · Who else cites this
Fathima Amin Vs. Union of IndiaReferred¶28
2003 (7) SCC 436 · Who else cites this
PP Abdulla Vs. Competent AuthorityReferred¶29
2007 (2) SCC 510 · Who else cites this
Aslam Mohammed Merchant Vs. Competent AuthorityRelied on¶22
2008 (14 ) SCC 186 · Who else cites this
Kesar DeviReferred¶29
2003 (7) SCC 427 · Who else cites this
R.Ramakrishnan Vs TribunalReferred¶30
2011 (6) MLJ 661
Union of India Vs. T.R.VarmaReferred¶38
AIR 1957 SC 882 · Who else cites this
Sahi Ram Vs. Avtar Singh and OthersReferred¶38
AIR 1999 SC 2169 · Who else cites this
State Bank of Patiala Vs. S.K.SharmaRelied on¶43
AIR 1996 SC 1669 · Who else cites this
The Competent Authority Vs. Hameed Abdul Kader and AnotherRelied on¶40
CDJ 2011 MHC 3203 (DB) = 2011 (3) CTC 345
Commissioner of Income Tax Vs. P.MohanakalaRelied on¶45
2007 (6) SCC 21 · Who else cites this
9 provisions across 3 enactments
Smt.Rukhiya
K.P.Abdul Majeed
Smt.P.K.Umaiba
The Registrar, The Appellate Tribunal for Forfeited Property
The Competent Authority, Smugglers & Foreign Exchange Manipulators (Forfeiture of Properties) Act, 1976
K.Ravichandrababu
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court