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TaxTMI 
TaxTMI 
TaxTMI 
2024 (8) TMI 666
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....and their relatives to show cause as to why the property mentioned in the notice should not be forfeited under SAFEMA. The Show Cause Notice was issued on the ground that one Mohammed Ahmed Umar Dossa was detained under Section 3(1) of Conservation of Foreign Exchange & Prevention of Smuggling Activities Act, 1974 (COFEPOSA) vide order dated 20th March, 1993 by the Government of Maharashtra. The order of detention was neither revoked nor quashed or set aside by any Court of Competent Jurisdiction. An order was passed thereupon against the Appellant for forfeiture of property being relative of the detenue thus covered by Section 2(2)(b) of SAFEMA. The Competent Authority passed an order on 29th February, 2000 pursuant to the first Show Cause Notice. On a challenge to the order, this Tribunal vide its order dated 19th September, 2002 dismissed the Appeal. Aggrieved by the order of this Tribunal the Appellant preferred a Writ Petition before Bombay High Court which quashed the order of this Tribunal on 06th April, 2005. The matter was remanded back to the Tribunal for rehearing. It is stated that after rehearing of the Appeal pursuant to the order of the Bombay High Court, this Tri....
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....properties in reference to each Appellant would be given while dealing with the individual case. We would be first considering the common issue raised by the Appellant. Both the parties were given opportunity to file written arguments and accordingly written arguments have been submitted. Common Issues The issues raised by the Appellant for our consideration (i) Properties were also subject matter of TADA proceedings The Learned Counsel for the Appellant submitted that the property forfeited under SAFEMA was subject matter of proceedings before designated TADA Court (bomb blast). The Court vide its order dated 05th November, 1999 released several properties involved in the impugned Show Cause Notice and the Government has not filed appeal to challenge the said order. Thus, in the light of the aforesaid and judgment of the Apex Court in the case of "Amina Ahmed Dossa & Ors. v/s. State of Maharashtra" reported in 2001 (2) SCC 675, the impugned order deserves to be set aside. It is further submitted that even properties attached under TADA are under challenge at the instance of Appellant and his relatives in the Criminal Writ Petition filed in the year 2001 itself and t....
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....of the properties held by any person to whom this Act applies, either by himself or through any other person on his behalf, his known sources of income, earnings or assets, and any other information or material available to it as a result of action taken under section 18 or otherwise, the competent authority has reason to believe (the reasons for such belief to be recorded in writing) that all or any of such properties are illegally acquired properties. it may serve a notice upon such person (hereinafter referred to as the person affected) calling upon him within such time as may be specified in the notice, which shall not be ordinarily less than thirty days, to indicate the sources of his income, earnings or assets, out of which or by means of which he has acquired such property, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties, as the case may be, should not be declared to be illegally acquired properties and forfeited to the Central Government under this Act. (2) Where a notice under sub-section (1) to any specifies any property as being held on behalf of such person by any other person. ....
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....cases and Section 8 provides burden of proof on the person served with the notice under section 6 of the Act. As against the aforesaid it would be gainful to refer to Section 8 of TADA Act and is quoted thus: Section 8 8. Forfeiture of property of certain persons - (1) Where a person has been convicted to any offence punishable under this Act or any rule made thereunder, the Designated Court may, in addition to awarding any punishment, by order in writing, declare that any property, movable or immovable or both, belonging to the accused and specified in the order, shall stand forfeited to the Government free from all encumbrances. (2) Where any person is accused of any offence under this Act or any rule made thereunder, it shall be open to the Designated Court trying him to pass an order that all or any properties, movable or immovable or both belonging to him, shall, during the period of such trial, be attached, and where such trial ends in conviction, the properties so attached shall stand forfeited to Government free from all encumbrances. (3) (a) If upon a report in writing made by a police officer or an officer referred to in sub-section ....
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....under TADA. Therefore, the first issue raised by the Appellant to challenge the impugned order is not made out. The forfeiture of property under TADA is to be dealt with as per the provision of TADA and would have no effect on the action taken as per the provision of SAFEMA. (ii). Validity of Notice under Section 6 of SAFEMA The Learned Counsel for the Appellant submitted that for issuing notice under Section 6 of the Act, respondents were under an obligation to first establish nexus between the income of the Detenue and the property in question. The Competent Authority has failed to establish nexus to the income of Detenue with the properties sough to be forfeited. The reference of the judgment of the Apex Court in the case of "Aslam Mohammed Merchants v/s. Competent Authority & Ors." reported in 2008 (14) SCC 186 has been given. It was stated that in para 23 of the said judgment, the Apex Court found the relevant provision of SAFEMA and NDPS Act to be pari-materia for recording reason to believe. According to the Appellant no link or nexus to the income of Detenue with the property has been given thus on the strength of the judgment of the Apex Court (Supra), the impugned o....
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....er be the length of time. Secondly, it takes in property which may have been acquired partly from out of illegal activity - in which case, of course, the provision in Section 9 would be attracted. xxxx 44. It is contended by the counsel for the petitioners that extending the provisions of SAFEMA to the relatives, associates and other 'holders' is again a case of overreaching or of over- breadth, as it may be called - a case of excessive regulation. xxxx SAFEMA is directed towards forfeiture of ―illegally acquired properties" of a person falling under clause (a) or clause (b) of Section 2(2). The relatives and associates are brought in only for the purpose of ensuring that the illegally acquired properties of the convict or detenu, acquired or kept in their names, do not escape the net of the Act. It is a well-known fact that persons indulging in illegal activities screen the properties acquired from such illegal activity in the names of their relatives and associates. Sometimes they transfer such properties to them, may be, with an intent to transfer the ownership and title. In fact, it is immaterial how such relative or associate holds the properties ....
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....g the affairs or keeping the accounts of such convict/detenu; (iii) any association of persons, body of individuals, partnership firm or private company of which such convict/detenu had been or is a member, partner or director; (iv) any individual who had been or is a member, partner or director of an association of persons, body of individuals, partnership firm or private company referred to in clause (iii) at any time when such person had been or is a member, partner or director of such association of persons, body of individuals, partnership firm or private company; (v) any person who had been or is managing the affairs or keeping the accounts of any association of persons, body of individuals, partnership firm or private company referred to in clause (iii); (vi) the trustee of any trust where (a) the trust has been created by such convict/detenu; or (b) the value of the assets contributed by such convict/detenu to the trust amounts, on the date of contribution not less than 20% of the value of the assets of the trust on that date; and (vii) where the competent authority, for reasons to be recorded in writing, considers that any properties of such convict/detenu are held on his ....
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....ioned in Section 2(2)(e) are concerned, they are dealt with on a separate footing. If such person proves that he is a transferee in good faith for consideration, his property - even though purchased from a convict/detenu - is not liable to be forfeited. It is equally necessary to reiterate that the burden of establishing that the properties mentioned in the show-cause notice issued under Section 6, and which are held on that date by a relative or an associate of the convict/detenu, are not the illegally acquired properties of the convict/detenu, lies upon such relative/associate. He must establish that the said property has not been acquired with the monies or assets provided by the detenu/convict or that they in fact did not or do not belong to such detenu/convict. We do not think that Parliament ever intended to say that the properties of all the relatives and associates, may be illegally acquired, will be forfeited just because they happen to be the relatives or associates of the convict/detenu. There ought to be the connecting link between those properties and the convict/detenu, the burden of disproving which, as mentioned above, is upon the relative/associate. In this view of....
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....provided by such convict or detenue. If a further requirement regarding establishing any link or nexus is imposed upon the competent authority, the provisions of Section 8 regarding burden of proof will become otiose and the very purpose of enacting such a Section would be defeated. 11. The requirement of establishing a "link or nexus" between the illegally acquired money of the convict or detenue as described in Sub-section (2) of Section 2 of the Act and the properties sought to be forfeited is sought to be derived from certain observations made by this Court in Attorney General for India v. Amratlal Prajivandas (supra) in paragraph 44 of the Reports. If paragraph 44 is read as a whole, it will be clear that no such requirement of establishing any link or nexus on the part of the competent authority has been laid down therein. In the said paragraph, the Bench dealt with contention of the counsel for the petitioners that extending the provisions of SAFEMA to the relatives, associates and other "holders" is again a case of overreaching or of over-breadth, as it may be called - a case of excessive regulation. Xxxx 12. The judgment of a court is not to be i....
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....ds "illegally acquired property" defined in Section 68-B(g) of the Narcotic Drugs and Psychotropic Substances Act, 1985 ("the NDPS Act", for short), which was materially different from the definition of "illegally acquired property" under Section 3 (1) (c ) of SAFEMA; and that therefore the decision in Aslam Mohammad Merchant, was not of much assistance and this aspect was ignored by Rajnikant R. Belekar. It was submitted that Rajnikant R. Belekar was wrongly decided. It was submitted that the principles relating to SAFEMA have been laid by this Court in Attorney General for India v. Amratlal Prajivandas, Fatima Mohd. Amin v. Union of India, Kesar Devi v/s. Union of India and other cases and the High Court had not considered any of those decisions. 8. We find considerable merit in the submission of the appellant. The High Court has not referred to the facts, nor considered the validity of the notices issued under Section 6 of the Act and the orders of forfeiture under Section 7 of the Act with reference to the facts and provisions of SAFEMA and the decisions of this Court. The impugned order cannot therefore be sustained." The paras of the judgment quoted above makes di....
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....operty." In view of the judgment refer to above and plain reading of Section 6 of the Act we do not find that the Competent Authority should have issued Show Cause Notice after showing link or nexus with the income of Detenue and property sought to be forfeited. If the argument is accepted, we would be virtually rewriting the provision, which is not permissible. The second issue raised by the Appellant is accordingly rejected. (iii). Violation of Principles of Natural Justice The Appellant has challenged the order of the Competent Authority on the ground that principles of nature justice have not been followed because proceeding remain pending before many officers but decided by one posted on the date of hearing. The facts mentioned in the written argument are of no substance because proceedings or hearing remain pending and taken up by the Authority posted from time to time. The requirement is for passing of the order by Authority who has heard the case. In the instant case the final hearing was made by the Competent Authority on 23rd May, 2005 said to be for few minutes without any proof has resulted in pronouncement of order. It was by the same Authority. The written ar....