2010 (7) TMI 1139 - HC - Indian Laws

Court restores petition challenging property forfeiture and detention order under SAFEMA and COFEPOSA. Upheld legality, dismissed writ.

MAHESH KANTILAL ZAVERI Versus UNION OF INDIA ORS

The court condoned the delay in filing the application for restoration and restored the petition. The challenge was against an order affirming forfeiture ... - Issues Involved:1. Delay in filing the application for restoration.2. Restoration of the petition.3. Challenge to the order of the Appellate Tribunal for Forfeited Property under SAFEMA.4. Validity of the second detention order under COFEPOSA.5. Legality of the forfeiture of properties under SAFEMA.6. Procedural irregularities and burden of proof under SAFEMA.7. Subsequent developments and mortgage of the property.8. Merits of the contentions raised by the Petitioner.Summary:1. Delay in Filing the Application for Restoration:Having heard learned counsel for the parties and for the reasons stated therein, the delay in filing the application for restoration is condoned.2. Restoration of the Petition:Having heard learned counsel for the parties and for the reasons stated therein, the petition is restored to its file.3. Challenge to the Order of the Appellate Tribunal for Forfeited Property under SAFEMA:The challenge in this petition is to an order dated 14th August 2000 passed by the Appellate Tribunal for Forfeited Property dismissing the Petitioner's Appeal No. 48/B/BOM/99 thereby affirming an order dated 22nd November 1999 passed by the Competent Authority, Mumbai u/s 7 and 19 of SAFEMA.4. Validity of the Second Detention Order under COFEPOSA:On 3rd June 1991 a detention order was passed against the Petitioner u/s 3(1) COFEPOSA. The detention order was revoked on 5th August 1996. However, a second detention order dated 5th October 1995 was passed against the Petitioner u/s 3(1) COFEPOSA.5. Legality of the Forfeiture of Properties under SAFEMA:The Competent Authority issued a show cause notice on 31st December 1997 u/s 6(1) SAFEMA to the Petitioner asking him to explain the source of his income, earnings, or assets out of which he had acquired the properties mentioned in the schedule enclosed with the notice.6. Procedural Irregularities and Burden of Proof under SAFEMA:The Competent Authority passed an order u/s 7 and 19 SAFEMA holding that the properties mentioned in the notice dated 31st December 1997 were acquired by the Petitioner and his wife through prohibited means of income in terms of FERA and Customs Act 1962 and were, therefore, illegally acquired properties.7. Subsequent Developments and Mortgage of the Property:The Petitioner mortgaged the flat at 7-B, Tirath Apartments, Andheri (West) with UCO Bank, Churchgate Branch, Mumbai in the year 2000 while obtaining financial assistance to the extent of Rs. 1 crore by depositing the original title deeds in respect of the said flat with the said Bank. The Petitioner failed to repay the loan, leading to proceedings under SARFAESI Act by UCO Bank.8. Merits of the Contentions Raised by the Petitioner:The Petitioner claimed that the second detention order dated 5th October 1995 was not based on any fresh material but on the same material on which the earlier detention order was based. The Petitioner also claimed to have discharged the initial burden of proof to explain the sources with which the above properties were acquired.Court's Conclusion:With the detention order dated 5th October 1995 having become final, it validly formed the basis for initiation of the forfeiture proceedings. The burden of showing the sources from where the Petitioner was able to legally acquire the property in question had to be initially discharged by the Petitioner. The detailed orders passed by the Competent Authority and the Appellate Tribunal on facts have not been shown by the Petitioner to be either perverse or not based on relevant material. Given the limited scope of the powers of this Court under Article 226 of the Constitution, it is not possible to accept the submission of learned counsel for the Petitioner that the impugned orders of the Competent Authority and the Appellate Tribunal are perverse or contrary to law.Final Order:This Court finds no ground to interfere in the matter. The writ petition and the pending applications are dismissed. The interim order stands vacated.