Post-notice property transfers under SAFEMA cannot claim good-faith transferee protection when forfeiture proceedings are pending.

A purchaser who acquires property after service of notice under Section 6(1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 cannot rely on the transferee-in-good-faith protection in Section 2(2)(e). The statutory scheme treats post-notice transfers of notified property as ineffective for the forfeiture proceedings, and Section 11 deems such transfers null and void once forfeiture is confirmed. Claims based on due diligence, bank financing, or asserted bona fides do not validate a transfer prohibited by the Act. The forfeiture order was therefore upheld and no further opportunity was required.

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Issues: Whether a purchaser of property transferred after service of notice under Section 6(1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 can claim protection as a transferee in good faith for adequate consideration and seek a further opportunity before forfeiture is confirmed.

Analysis: The property in question had been notified under Section 6(1) before the sale in favour of the appellants. Under the statutory scheme of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, persons covered by Section 2(2), the burden under Section 8, the prohibition on holding illegally acquired property under Section 4, and the forfeiture mechanism under Section 7 operate together to prevent alienation of the property during the pendency of proceedings. Section 11 expressly provides that any transfer of the property referred to in a notice under Section 6 or Section 10, if made after issuance of such notice, is to be ignored for the purposes of the proceedings and is deemed null and void once forfeiture follows. The exception for a transferee in good faith for adequate consideration under Section 2(2)(e) applies to a holder protected by that clause, but not to a purchaser who acquires the property after notice under Section 6(1). The appellants' due diligence, bank financing, and alleged bona fides could not validate a transfer prohibited by statute.

Conclusion: The appellants were not entitled to claim protection as transferees in good faith, and no further opportunity was required to be given to them. The forfeiture order was upheld and the appeal failed.

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