2017 (8) TMI 756 - AT - FEMA

Appellant not deemed 'relative' or 'associate' under SAFEMA, forfeiture order set aside

Suman S. Rana Versus The Deputy Director Directorate of Enforcement, Mumbai

The Tribunal found that the appellant was not a 'relative' or an 'associate' of the detained individual under SAFEMA. As a result, the provisions of ... Forfeiting the properties as order passed under section 7 of the SAFEMA, 1976 - purview of the term “associate” / 'relative' - connection with alleged illegal activities of the detenu - Held that:- The only activities that have been stated in this regard are that the appellant assisted AP-1 to assume the name of Sanjay Srinath Rana and to obtain documents like Ration Card and Passport in the assumed name and that the detenu resided in the residence of the appellant through November, 2004 to April, 2005. We are of the view that the said activities by themselves would not bring the appellant within the purview of the term “associate” on the basis that she was managing the affairs of or keeping the accounts of AP-1 The explanation of the appellant in this regard is that certain documents had been given by her to AP-1/detenu to help her in obtaining the passport for her blind son Nishant Rana, which was misused by him to obtain a passport for himself in an assumed name using the same set of documents. There is also no evidence whatsoever that may indicate that the appellant was involved in the alleged illegal activities of the detenu/AP-1 in any manner whatsoever. The period of stay of the detenu at the appellant”s premises is also from November, 2004 to April, 2005 whereas the alleged illegal activity of AP-1 was of a later period viz. October, 2005. It is also observed that the impugned order is totally silent as to under which clause of the definition of associate, the appellants case is covered. We therefore find that the finding of the lower authority that the appellant would be covered within the term “associate” as defined in the Act is unsustainable. We find that the appellant cannot be considered as the wife of the detenu/AP-1 and hence not covered under the term “relative” as defined in the Act. She is also not covered within the definition of the term “associate” of detenu/AP-1 as defined under the Act. Consequently, she does not qualify as a person covered by the provisions of SAFEMA and accordingly the provisions of SAFEMA are not applicable to her. In conclusion, we find that the impugned order is unsustainable in law. Issues Involved:1. Applicability of SAFEMA to the appellant.2. Definition and applicability of 'relative' under Section 2(2)(c) of SAFEMA.3. Definition and applicability of 'associate' under Section 2(2)(d) of SAFEMA.4. Nexus between the forfeited properties and the alleged illegal activities of the detenu (AP-1).Issue-Wise Detailed Analysis:1. Applicability of SAFEMA to the appellant:The appeal was filed against the order dated 08.07.2010, under section 7 of SAFEMA, 1976, forfeiting properties belonging to the appellant, Smt. Suman S. Rana. The detenu, Suresh Kumar Jain (AP-1), was detained under COFEPOSA, and his wife, Suman S. Rana (AP-2), was implicated under SAFEMA as a relative and associate. The appellant contested her association with AP-1, claiming she was not his wife but the legally wedded wife of Late Sanjay Rana, and that she had no financial or illegal connection with AP-1.2. Definition and applicability of 'relative' under Section 2(2)(c) of SAFEMA:The appellant argued she was not the wife of AP-1, presenting evidence that she was married to Late Sanjay Rana and had no marital or financial ties with AP-1. The Tribunal considered various statements and evidence, including the appellant’s consistent claim of being married to Sanjay Rana and AP-1’s differing statements about his relationship with her. The Tribunal concluded that the relationship between AP-1 and AP-2 did not meet the criteria of a 'spouse' under the common law meaning of marriage, as defined in the case of D. Velusamy vs. D. Patchaiammal, which requires a long-term cohabitation akin to marriage. The Tribunal agreed that the appellant could not be considered AP-1's wife, and thus, not a 'relative' under SAFEMA.3. Definition and applicability of 'associate' under Section 2(2)(d) of SAFEMA:The respondent argued that the appellant was an 'associate' of AP-1, as she allegedly helped him assume a false identity and obtain documents like a passport and ration card. The Tribunal found no evidence that the appellant knowingly assisted AP-1 in these activities. The appellant’s explanation that AP-1 misused her documents to obtain a passport in an assumed name was accepted. The Tribunal concluded that the appellant’s actions did not amount to managing AP-1's affairs, and thus, she did not fit the definition of an 'associate' under SAFEMA.4. Nexus between the forfeited properties and the alleged illegal activities of the detenu (AP-1):The appellant contested the nexus between the forfeited properties and AP-1’s illegal activities, arguing that the properties in question were acquired through her legitimate income and gifts from her grandfather. The Tribunal noted the lack of evidence linking the properties to AP-1’s illegal activities and found the show cause notice and the impugned order unsustainable in law. Consequently, the Tribunal set aside the forfeiture order, providing relief to the appellant.Conclusion:The Tribunal concluded that the appellant was neither a 'relative' nor an 'associate' of AP-1 under SAFEMA, and therefore, the provisions of SAFEMA were not applicable to her. The impugned order was set aside, and the appellant was granted consequential relief.