2017 (11) TMI 265

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.... two petitioners and husband of the third and their common predecessor in interest) was served with a detention order dated 08.11.1976 issued in the name of the Governor of Punjab. The order claimed that to prevent him from dealing in smuggled goods, he had to be detained. A declaration was also issued by the Governor of Punjab under section 12A(2) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 ("COFEPOSA‟) declaring that the detention was necessary, and that it is not in public interest to disclose the facts or to give an opportunity of making a representation to the detenu. Piare Lal unsuccessfully challenged his detention. A notice, dated 10.05.1978 was issued by the competent authority under Section 6 of SAFEMA stating that he had reason to believe that the properties mentioned in the schedule have been acquired by him illegally within the meaning of clause (c) of sub section (1) of section 3 of SAFEMA. The petitioner was required to indicate the sources of his income, earnings and assets out of which, or by means of which, the petitioner had acquired the scheduled properties, and also to show cause as to why they should not be de....

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.... 1974-75. In the period relevant to assessment year 197273, Piara Lal has made an investment of Rs. 10,800 in the Chandrauli Plot in Delhi. In the course of assessment proceedings, being unable to explain the source of his investment, Piara Lal has surrendered the amount of investment for assessment. Similarly in the period relevant to assessment year 1974-75, Piara Lal has made investments in real estate listed at S. No.2,3 and 4 in para 2. The aggregate of these investments comes to about Rs. 16,000. Here again, unable to explain the source of this investment, Piara Lal has surrendered the same for assessment. In this year an addition has also been made on account of inadequate marriage expenses and inadequate household expenses. It will thus be abundantly clear that although Piara Lal's various investments have been considered in the course of assessment proceedings, the source of these investments has at no stage, been proved. Since the source of investment in properties listed at S. No.1 to 4 of para 3, has not been explained and proved, those properties fall squarely within the purview of sec. 3(1)(c)(iii) of the SAFEMA." 4. It was also stated that the said properties ....

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....ion 6 of the Act is not illegally acquired, shall be on the person affected. Piare Lal was unable to explain the source of his income, which enabled him to acquire the properties. Even if the belatedly filed returns were to be accepted, the amount apparently spent on purchase of properties in a few years was far in excess of the income. 6. The learned single judge, by the impugned judgment, in allowing the writ petitions, relied on Shanti Devi v Union of India & Ors 73 (1998) DLT 477 (DB) and held that: "... The Division Bench in this case held that the question of applying the rule of evidence enacted by section 8 of SAFEMA, casting the burden of proof on the person affected, shall come into play only on some connecting link or nexus being established or traced between the holding of the property or assets by the person proceeded against, and illegal activity of the detenue/convict. 15. The "reasons to believe" as recorded in the present case by the competent authority undoubtedly raise a doubt about the source of funds wherefrom the aforesaid properties were acquired at the relevant time. However, they do not go on to state that there was a nexus between the income deriv....

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....detention order under COFEPOSA is successfully challenged, the basis of subsequent order under SAFEMA cannot be questioned. It was also argued that one of the respondents (Kamla Vati), widow of Piare Lal, was an affected person. She had no independent source of income and she was financially dependent on the detenue. She did not possess any means to make any investment as regards the property in her name for the same reason. In this regard, it was argued that in the absence of any explanation for the details of income, it could be concluded that the persons shall be covered under section 2 (2)(c) of SAFEMA and the competent authority's order for forfeiture of the property was therefore valid. Counsel lastly relied on Sh. Zahid Pervaz v Union of India ILR 2012 (1) Del 566, where it was held as follows: "The impugned orders have to be tested on the basis of the materials produced before the authorities who have passed these orders. The said plea is clearly an afterthought and is an attempt to improve his case by petitioner. From the known source of income of the petitioner or his father, the aforesaid properties have not been established to have been acquired. It has not even been....

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....ategorical as to the need for existence of a link between some smuggling activities and the acquisition of assets/properties that are to be the subject matter of SAFEMA proceedings. In P.P. Abdulla (supra), this aspect was highlighted by the Supreme Court, in the following manner: "8. It must be stated that an order of confiscation is a very stringent order and hence a provision for confiscation has to be construed strictly, and the statute must be strictly complied with, otherwise the order becomes illegal. 9. In our opinion, the facts of the case are covered by the decision of this Court in Fatima Mohd. Amin v Union of India (2003) 7 SCC 436. In the present case the contents of the notice, even if taken on face value, do not disclose any sufficient reason warranting the impugned action against the appellant as, in our opinion, the condition precedent for exercising the power under the Act did not exist. Hence, the impugned orders cannot be sustained." 11. Section 6 (1) of SAFEMA provides: "Section 6 - Notice of forfeiture (1) If, having regard to the value of the properties held by any person to whom this act applies, either by himself or through any other person o....

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.... under Section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988 (PITNDPS Act) was in question. The court had to consider if a 12 year old minor's property could be said to have been validly acquired, given that his brother's detention was unsuccessfully challenged. The court, in that case, did not consider either Fatima Mohd. Amin or P.P. Abdulla (supra). Therefore, this court is of the opinion that Zahid Pervez cannot be considered a binding authority, which can be preferred over the decisions of the Supreme Court. 13. In this case, the entire basis of the notice appears to be a detention, the challenge to which was declined. Here, it is important to remember that the detenue's access to Article 226 of the Constitution of India was doubted; nine High Courts held that access existed. The Supreme Court, however overturned their rulings in ADM Jabalpur v Shivakant Shukla AIR 1976 SC 1207, in its majority judgment. This meant that even petitions challenging validity of detention orders, on the ground that no valid rationale for detention existed under the COFEPOSA could not be entertained. The internal emergency that existed at the t....