Post-notice transfers under SAFEMA are invalid, and a final forfeiture order cannot be attacked through a consequential possession notice.

A transfer of property made after issuance of notice under SAFEMA Section 6 is statutorily ineffective under Section 11 and cannot be protected as a bona fide purchase for adequate consideration under Section 2(2)(e). The statutory scheme treats such post-notice transfers as invalid and, upon forfeiture, the property vests in the Central Government under Section 7(3). A writ challenge to a possession notice was also held unsustainable where the underlying forfeiture order under Section 7(1) had already attained finality, because the possession notice was only a consequential step and the statutory presumption under Section 8 had not been displaced.

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Issues: (i) Whether a transferee who purchased property after the issue of notice under Section 6 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 could resist forfeiture proceedings by claiming to be a transferee in good faith for adequate consideration under Section 2(2)(e) of the Act. (ii) Whether the writ petition challenging the possession notice was maintainable when the forfeiture order under Section 7(1) had already attained finality.

Issue (i): Whether a transferee who purchased property after the issue of notice under Section 6 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 could resist forfeiture proceedings by claiming to be a transferee in good faith for adequate consideration under Section 2(2)(e) of the Act.

Analysis: Section 2(2)(e) protects an innocent purchaser who acquired the property before the commencement of forfeiture proceedings. Section 11, however, renders transfers made after the issue of notice under Section 6 or Section 10 ineffective for the purposes of the Act and, upon forfeiture, such transfers are deemed null and void. The statutory scheme shows that a transfer made after initiation of proceedings cannot be insulated by invoking good faith or adequate consideration, because the transfer itself stands invalidated by the Act. Section 7(3) further brings about statutory vesting in the Central Government once forfeiture is declared.

Conclusion: The transferee could not claim the protection of Section 2(2)(e) and the post-notice transfer was hit by Section 11; the finding was against the respondent.

Issue (ii): Whether the writ petition challenging the possession notice was maintainable when the forfeiture order under Section 7(1) had already attained finality.

Analysis: The possession notice was only a consequential step flowing from the final forfeiture order. The substantive forfeiture order had not been challenged successfully and had already become final. Once the principal order under Section 7(1) stood concluded, the respondent could not impeach only the consequential notice for possession. The challenge was also unsustainable because the statutory presumption under Section 8 and the burden to disprove illegal acquisition had not been displaced.

Conclusion: The writ petition was not maintainable against the consequential possession notice, and the challenge failed against the respondent.

Final Conclusion: The possession notice was valid, the forfeiture order remained undisturbed, and the appeal succeeded, resulting in restoration of the statutory action under SAFEMA.

Ratio Decidendi: A transfer made after the issue of notice under Section 6 of SAFEMA is statutorily invalid under Section 11 and cannot be defended as a bona fide purchase under Section 2(2)(e), especially where the underlying forfeiture order has attained finality and the subsequent possession notice is merely consequential.

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