TaxTMI 
TaxTMI 
2007 (9) TMI 529
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....e petitioners claim that they have purchased Flat No. 004 of Kamala Mansion, Ground Floor, Promenade Place, No. 45/2, Promenade Road pursuant to a registered sale deed dated 20th March 1997 for valuable consideration from respondents 3 and 4. According to the petitioners, the said deed is registered with the sub-registrar at Shivajinagar, Bangalore. It is not in dispute that certain proceedings were initiated against respondent No. 3 - Vendor under the Conservation of Foreign Exchange and Prevention of Smuggling Act, 1974 (for short 'COFEPOSA Act'). In the said proceedings, he was directed to be detained and has suffered an order of detention. During the course of these proceedings it was revealed that the immovable property, which is the s....
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.... the second representation was given by the 4th respondent for extension of time to file his objections and 13-3-2005 i.e., before first of the summons was issued in respect of tender proceedings, the said property was sold on 10-2-2005 in favour of the petitioners both by respondents 3 and 4, who are wife and husband. The sale consideration is Rs. 26,00,000/-. The Competent Authority pursuant to the impugned order, a copy of which is produced at Annexure 'P' has found that the purchase of the property by respondents 3 and 4 for the relevant period was through the ill-gotten money for which the proceedings were initiated against him under COFEPOSA Act and wherein he was detained. Consequently, on the totality of the circumstances and eviden....
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....for notice. 4. Mr. Arvind Kumar, learned Assistant Solicitor General appearing for respondents 1 and 2 submits that the Enforcement Authority, on an earlier occasion had prima facie found that the acquisition of the property by 3rd and 4th respondents was pursuant to an amount, which was not accounted for. Hence, the order of forfeiture under Section 7 of the Act is just and proper. He would submit placing reliance on Section 11 of the Act that certain transfers, which are made after the proceedings have commenced under Section 6 of the Act, shall be ignored and shall be deemed to be null and void. He submits that even assuming that the petitioners are entitled for notice under the Act, that by itself will not be of any advantage to t....
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....ely. The Act is made applicable to every person under certain enactments, including the persons who have been detained under the COFEPOSA and also who have violated the Foreign Exchange Regulations. 9. Clause (e) of sub-section (2) of Section 2 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 would deal with a person who is classified as any holder of any property, which was at any time previously held by a person referred to in clause (a) or clause (b) unless the present holder or, as the case may be, any one who held such property after such person and before the present holder, is or was a transferee in good faith for adequate consideration. 10. Section 6 of the Act would contemplate issua....
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....at if a person is ultimately required to be hanged or to be crucified, he should be heard in the matter. Ultimately, the Competent Authority might come to a conclusion that all the transactions are null and void and the said transfer is to be ignored for the purpose of forfeiture. 13. Section 9 of the Act would also contemplate fine in lieu of forfeiture. Having regard to this, I am of the view that the impugned order at Annexure 'P' is in violation of the Principles of Natural justice inasmuch as on the date when the order was passed on 23-6-2005, the petitioners had purchased and had come into possession of the property in question. Consequently, the impugned order at Annexure 'P' dated 23-6-2005 is liable to be quashed and accordin....