Madras High Court
The Competent Authority vs Mohammed Thahaumma (Deceased) on 19 August, 2024
Author: S.M.Subramaniam
Bench: S.M.Subramaniam
2024:MHC:3099
W.A.No.543 of 2012
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 01.08.2024
PRONOUNCED ON : 19.08.2024
CORAM
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
AND
THE HONOURABLE MR.JUSTICE C.KUMARAPPAN
W.A.No.543 of 2012
and
M.P.No.1 of 2012
The Competent Authority,
Smugglers and Foreign Exchange Manipulators
(Forfeiture of Property) and NDPS Acts,
T.Nagar, Chennai – 17. ... Appellant
Vs.
Mohammed Thahaumma (Deceased)
1.S.S.A.Hayarunisha
2.S.S.A.Sheik Kamal
3.S.S.A.Aminath Fathima
4.S.S.A.Ayshath Zulaiha
5.S.S.A.Seyed Anifa
6.S.S.A.Husain Jalal
7.S.S.A.Kathija Rilwana
8.S.S.A.Basheer
9.Appellate Tribunal for Forfeited Property
Loknayak Bhavan, 4th Floor,
Khan Market, New Delhi – 3. ... Respondents
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Prayer: Writ Appeal filed under Clause 15 of Letters Patent praying to allow
the writ appeal, to set aside the order in W.P.No.7609 of 2001 dated
08.04.2011 and consequentially dismiss the same together with costs.
For Appellant : Mr.N.Ramesh
For R1 to R8 : Mr.B.Kumar
Senior Counsel
For Mr.S.Ramachandran
For R9 : Tribunal
JUDGMENT
S.M.SUBRAMANIAM, J.
FACTUAL MATRIX:
The Competent Authority, Smugglers and Foreign Exchange
Manipulators (Forfeiture of Property) Act, 1976 [hereinafter referred as
“SAFEMA”] preferred this writ appeal challenging the common order dated
08.04.2011 passed in W.P.No.7609 of 2001.
2. Notice under Section 6(1) of SAFEMA was issued to
Smt.Mohammed Thahaumma (Deceased) on 09.02.1976. Persons affected
were S.S.A.Shahul Hameed, his wife and three sons. Reply statement was
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given by Mr.S.S.A.Shahul Hameed / detenu on 09.05.1977 and 16.07.1977.
Court granted stay for forfeiture of property under SAFEMA on 08.08.1977
and the stay was vacated on 18.07.1994. Thereafter, personal hearing was
fixed. The detenu / Mr.S.S.A.Shahul Hameed died on 17.10.1994. The wife
of detenu and his three sons were brought on record. Personal hearing was
held on 04.04.1995 and on 31.03.1995. The wife and sons of the detenu
Mr.S.S.A.Shahul Hameed made a statement before the authorities that the
properties were purchased by their father in their names. The sons of the
detenu / Mr.S.S.A.Shahul Hameed clearly stated that they are not aware of
the other details. However, they made a statement that the properties sought
to be forfeited were purchased by their father in their names. It was made
clear by the sons of the detenu that they have not invested for the purchase of
the subject properties. The affected persons have not produced any document
or evidence to establish that the subject properties are ancestral properties.
Considering the materials available on record and based on the statement of
affected persons, the Competent Authority passed an order of forfeiture under
Section 7(1) of the Act in proceedings dated 28.04.1995.
3. Pursuant to issuance of Section 6(1) Notice, proceedings are
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commenced by the Competent Authority on 02.02.2000. After conducting an
inquiry, the Competent Authority passed an order on 26.02.2001. The
affected persons filed an appeal before the Appellate Tribunal for forfeited
property in New Delhi in F.P.A.No.66/MDS/95. After adjudication, the
Appellate Tribunal ordered forfeiture of property on 31.01.2001. Thereafter,
W.P.No.7609 of 2001 was filed challenging the order dated 31.01.2001. The
Writ Court set aside the show cause notice dated 09.02.1977 issued under
Section 6(1) of SAFEMA. Challenging the Writ Court order dated
08.04.2011, the present writ appeal came to be instituted.
SUBMISSIONS ON BEHALF OF THE APPELLANTS:
4. Mr.N.Ramesh, learned counsel appearing on behalf of the appellant
would mainly contend that the Writ Court has not considered the spirit and
the intent of SAFEMA and quashed the very 6(1) Notice itself. The
procedures as contemplated under the Act had been followed scrupulously by
the authorities competent. The Writ Court has not considered principles laid
down by the Apex Court of India with reference to the scope of SAFEMA.
5. In the present case, it is not in dispute that Late Mr.S.S.A.Shahul
Hameed was detained. Smt.Mohammed Thahaumma is the wife of the
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W.A.No.543 of 2012detenu. Hussain Jalal and Sheik Kamal are the sons of the detenu.
Smt.Ameenath Fathima, Smt.Katheejathul Rilwana and Smt.Aysasth Zulaika
are daughters of the detenu. Common order dated 28.04.1995 was passed by
the Competent Authority, Madras under Section 7(1) of SAFEMA, whereby,
the properties were forfeited.
6. The order of the Competent Authority dated 28.04.1995 was also
under challenge. Therefore, the contention of the respondents that it has not
been served on them is incorrect. The common order dated 28.04.1995
passed by the Competent Authority, Madras under Section 7(1) of SAFEMA
was referred by the Appellate Tribunal for forfeited property in New Delhi, in
its final order dated 31.01.2001. Therefore, the contention of the respondents
that the order dated 24.08.1995 had not served to the respondents are false
and incorrect.
7. Section 6(1) Notice under SAFEMA issued properly in compliance
with the provisions of the Act. Section 6(1) Notice was not challenged by the
noticees during the relevant point of time. The common order under Section
7(1) dated 28.04.1995 was challenged before the Appellate Tribunal by the
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affected persons. The Appellate Tribunal confirmed the common order.
8. Mr.Ramesh, would rely on the judgment of the Hon’ble Supreme
Court of India in the case of Kesar Devi vs. Union of India and Others 1,
held as follows;
“10. Section 2(1) of SAFEMA lays down that
the provisions of the said Act shall apply only to
the persons specified in sub-section (2) of that
section. Sub-section (2) of Section 2 gives a long
list of different categories of persons to whom the
Act shall apply and they include those who have
been convicted under the Customs Act, 1962, Sea
Customs Act, 1878, Foreign Exchange Regulation
Act, 1947 or 1973, where the value of goods or the
amount involved exceeds Rs 1 lakh or have been
convicted subsequently under the aforesaid Acts.
Clause (b) of this sub-section includes a person
against whom an order of detention has been
made under the COFEPOSA Act and is not
covered by the proviso to this clause. Clause (c) to
sub-section (2) includes every person who is a
relative of the person referred to in clause (a) or
clause (b). Explanation (2) gives a long list of
1 [(2003) 7 SCC 427)
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relatives for the purpose of clause (c) and in view
of clause (i) thereof, Kesar Devi being the spouse
of Jagannath Sharma is clearly covered by the
provisions of the Act. Section 6 of the Act lays
down that if, having regard to the value of the
properties held by any person to whom the Act
applies, either by himself or through any other
person on his behalf, his known source 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
calling upon him to indicate the sources of his
income, earnings or assets, out of which or by
means of which, he has acquired such property
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. The
condition precedent for issuing a notice by the
competent authority under Section 6(1) is that he
should have reason to believe that all or any of
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such properties are illegally acquired properties
and the reasons for such belief have to be
recorded in writing. The language of the section
does not show that there is any requirement of
mentioning any link or nexus between the convict
or detenu and the property ostensibly standing in
the name of the person to whom the notice has
been issued. Section 8 of the Act which deals with
the burden of proof is very important. It lays down
that in any proceedings under the Act, the burden
of proving that any property specified in the
notice served under Section 6 is not illegally
acquired property, shall be on the person affected.
The combined effect of Section 6(1) and Section 8
is that the competent authority should have reason
to believe (which reasons have to be recorded in
writing) that properties ostensibly standing in the
name of a person to whom the Act applies are
illegally acquired properties, he can issue a notice
to such a person. Thereafter, the burden of
proving that such property is not illegally
acquired property will be upon the person to
whom notice has been issued. The statutory
provisions do not show that the competent
authority, in addition to recording reasons for his
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belief, has to further mention any nexus or link
between the convict or detenu [as described in
sub-section (2) of Section 2] and the property
which is sought to be forfeited in the sense that
money or consideration for the same was provided
by such convict or detenu. 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 detenu 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 [(1994) 5 SCC 54 : 1994 SCC (Cri)
1325] in para 44 of the Report. If para 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 the contention of the counsel for the
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petitioners that extending the provisions of
SAFEMA to the relatives, associates and other
“holders” is again a case of overreaching or of
overbreadth, as it may be called, a case of
excessive regulation. The relevant part of para 44
(p. 92 of the Report) is being reproduced below:
“The language of this section is indicative
of the ambit of the Act. Clauses (c) and (d) in
Section 2(2) and Explanations (2) and (3)
occurring therein shall have to be construed and
understood in the light of the overall scheme and
purpose of the enactment. The idea is to forfeit the
illegally acquired properties of the convict/detenu
irrespective of the fact that such properties are
held by or kept in the name of or screened in the
name of any relative or associate as defined in the
said two Explanations. The idea is not to forfeit
the independent properties of such relatives or
associates which they may have acquired illegally
but only to reach the properties of the
convict/detenu or properties traceable to him,
wherever they are, ignoring all the transactions
with respect to those properties. By way of
illustration, take a case where a convict/detenu
purchases a property in the name of his relative or
associate — it does not matter whether he intends
such a person to be a mere name-lender or
whether he really intends that such person shall
be the real owner and/or possessor thereof — or
gifts away or otherwise transfers his properties in
favour of any of his relatives or associates, or
purports to sell them to any of his relatives or
associates — in all such cases, all the said
transactions will be ignored and the propertiesPage 10 of 55
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W.A.No.543 of 2012forfeited unless the convict/detenu or his
relative/associate, as the case may be, establishes
that such property or properties are not ‘illegally
acquired properties’ within the meaning of
Section 3(c). … 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,
maybe 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.”
12. The judgment of a court is not to be
interpreted like a statute where every word, as far
as possible, has to be given a literal meaning and
no word is to be ignored. The observations made
have to be understood in the context of the facts
and contentions raised. As mentioned earlier,
Explanation (2) appended to clause (c) of sub-
section (2) of Section 2 gives a very long list of
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relations. The combined effect of clauses (iii) and
(vii) of the Explanation is that a convict or
detenu’s wife’s sister’s lineal descendant whether
male or female and howsoever low is also
included even though the relationship is quite
remote. In those cases where the relationship is a
very remote one, the competent authority may
have to indicate some link or nexus while
recording reasons for belief that the property is
an illegally acquired property. But cases where
relationship is close and direct like spouse, son or
daughter or parents stand on an altogether
different footing. Here no link or nexus has to be
indicated in the reasons for belief between the
convict or detenu and the property, as such an
inference can easily be drawn.
13. We are, therefore, clearly of the opinion
that under the scheme of the Act, there is no
requirement on the part of the competent authority
to mention or establish any nexus or link between
the money of the convict or detenu and the
property sought to be forfeited. In fact, if such a
condition is imposed, the very purpose of enacting
SAFEMA would be frustrated, as in many cases it
would be almost impossible to show that the
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property was purchased or acquired from the
money provided by the convict or detenu. In the
present case, the appellant is the wife of the
detenu and she has failed to establish that she had
any income of her own to acquire the three
properties. In such circumstances, no other
inference was possible except that it was done so
with the money provided by her husband.
16. The judgment in Fatima Mohd. Amin
[CAs Nos. 7400-01 of 1996, decided on 16-1-2003
: (2003) 7 SCC at p. 436 (below)] relied upon by
the learned counsel for the appellant can be of no
assistance to him. On facts, the Court found that
the notice issued by the competent authority did
not disclose any reasons and thus the same did
not meet the requirement of sub-section (1) of
Section 6 of the Act. As shown above, this is not
the case here as the reasons for belief have been
clearly recorded by the competent authority.”
9. In the case of Union of India vs. Champabai Devichand Saha
(Dead) By LRs and Others2, held as follows;
“6. In Rajnikant R. Belekar [ WP (Cri) No.
2 [(2011) 4 SCC 451]
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837 of 2007, decided on 22-7-2008 (Bom)], the
High Court held that unless the direct nexus
between the property which was sought to be
forfeited under SAFEMA and the income derived
by way of contravention of the provisions of
SAFEMA, or the acquisition of the property by the
person concerned by illegal activities, was
established, the property could not be made the
subject-matter of the proceedings under SAFEMA.
For this purpose, in Rajnikant R. Belekar [ WP
(Cri) No. 837 of 2007, decided on 22-7-2008
(Bom)] it relied upon the decision of this Court in
Aslam Mohammad Merchant v. Competent
Authority [(2008) 14 SCC 186 : (2009) 2 SCC
(Cri) 793] .
7. The appellant submitted that Rajnikant
R. Belekar[ WP (Cri) No. 837 of 2007, decided on
22-7-2008 (Bom)] had not considered Section
6(1) of SAFEMA. It was also submitted that the
decision in Aslam Mohammad Merchant [(2008)
14 SCC 186 : (2009) 2 SCC (Cri) 793], relied
upon in Rajnikant R. Belekar [ WP (Cri) No. 837
of 2007, decided on 22-7-2008 (Bom)] , dealt with
the words “illegally acquired property” defined in
Section 68-B(g) of the Narcotic Drugs and
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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 [(2008) 14 SCC 186 : (2009) 2 SCC
(Cri) 793] , was not of much assistance and this
aspect was ignored by Rajnikant R. Belekar [ WP
(Cri) No. 837 of 2007, decided on 22-7-2008
(Bom)] . It was submitted that Rajnikant R.
Belekar [ WP (Cri) No. 837 of 2007, decided on
22-7-2008 (Bom)] 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 [(1994) 5 SCC
54 : 1994 SCC (Cri) 1325], Fatima Mohd. Amin v.
Union of India [(2003) 7 SCC 436 : 2003 SCC
(Cri) 1661], Kesar Devi v. Union of India [(2003)
7 SCC 427 : 2003 SCC (Cri) 1652] 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
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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. On this limited ground the matters
deserve to be remitted to the High Court for fresh
consideration in accordance with law.”
10. In the case of Competent Authority, ‘UTSAV’, No.64/1,
G.N.Chetty Road, T.Nagar, Chennai – 600 017 vs. Hameed Abdul Kader
and Another3, the Madras High Court held as follows;
“36. The legality of notice issued under
Section 6 of SAFEMA was considered by the
Supreme Court in Kesar Devi v. Unon of India,
2003 (7) SCC 427. The Supreme Court held that
notice issued under Section 6 need not show any
link or nexus between the illegally acquired
money of the detenu and the property sought to be
forfeited for passing order of forfeiture under
Section 7. The relevant observation is as under:
“10. … The condition precedent for issuing
a notice by the Competent Authority under Section
6(1) is that he should have reason to believe that
all or any of such properties are illegally acquired3 [2011 SCC Online Mad 549]
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W.A.No.543 of 2012properties and the reasons for such belief have to
be recorded in writing. The language of the
Section does not show that there is any
requirement of mentioning any link or nexus
between the convict or detenu and the property
ostensibly standing in the name of the person to
whom the notice has been issued. Section 8 of the
Act which deals with burden of proof is very
important. It lays down that in any proceedings
under the Act, the burden of proving that any
property specified in the notice served under
Section 6 is not illegally acquired property, shall
be on the person affected. The combined effect of
Section 6(1) and Section 8 is that the Competent
Authority should have reason to believe (which
reasons have to be recorded in writing) that
properties ostensibly standing in the name of a
person to whom the Act applies are illegally
acquired property will be upon the person to
whom notice has been issued. The statutory
provisions do not show that the Competent
Authority, in addition to recording reasons for his
belief, has to further mention any nexus or link
between the convict or detenu (as described in
sub-section (2) of Section 2) and the property
which is sought to be forfeited in the sense that
money or consideration for the same was provided
by such convict or detenu. If a further requirement
regarding establishing any link or nexus is
imposed upon the Competent Authority, the
provision of Section 8 regarding burden of proof
will become otiose and the very purpose of
enacting such a Section would be defeated.
13. We are, therefore, clearly of the opinion
that under the Scheme of the Act, there is no
requirement on the part of the Competent
Authority to mention or establish any nexus orPage 17 of 55
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and the property sought to be forfeited. In fact, if
such a condition is imposed, the very purpose of
enacting SAFEMA would be frustrated, as in many
case it would be almost impossible to show that
the property was purchased or acquired from the
money provided by the convict or detenu.”
37. The learned Counsel for the First
Respondent by placing reliance on the judgment
of the Supreme Court in P.P. Abdulla v. The
Competent Authority, 2007 Crl. L.J. 1449,
contended that the order of confiscation is a very
stringent order and as such, it has to be construed
strictly.
38. The issue before the Supreme Court in
P.P. Abdulla (supra) was regarding the failure on
the part of the Competent Authority to indicate the
actual reasons which made them to believe that
the property was purchased with tainted money.
The Supreme Court found that Section 6(1)
contains a mandatory requirement to indicate
reasons and as such, the failure on the part of the
Competent Authority to record reasons would
vitiate the subsequent proceedings. However, in
the instant case, reasons recorded by the
Competent Authority clearly gives an indication
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about the actual reasons which weighed with the
authority to arrive at a prima facie conclusion
that the immovable property was purchased only
out of the income provided by the detenu.
39. The learned Senior Counsel placed
reliance on the judgment of Supreme Court in
Aslam Mohammed Merchant v. The Competent
Authority, 2008 (14) SCC 186. In the said case,
the Supreme Court was considering Sections 68-I,
68-C, 68-H, 68-E and 68-F under Chapter V-A of
Narcotic Drugs and Psychotrophic Substances
Act. The Supreme Court found that the show cause
notice does not contain the statutory requirements
which are condition precedent for initiating the
proceeding. Therefore, the Supreme Court
observed that when stringent laws become
applicable as a result whereof some persons are
to be deprived of his/her right in property,
scrupulous compliance of the statutory
requirements is imperative.
43. The Competent Authority in its show
cause notice, very clearly stated that the property
was purchased with the unexplained money. The
relationship of the second Respondent with the
detenu was also indicated in the show cause
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notice. Therefore, the word “unaccounted
money”, as indicated in the show cause notice,
was used only with reference to the money
contributed by the detenu under COFEPOSA.
Since the Competent Authority clearly indicated
the reasons for taking action under SAFEMA,
naturally burden of proof shifted on the First
Respondent to prove that the property was not
illegally acquired property.
44. Section 8 of SAFEMA deals with burden
of proof. The said provision reads thus:
“In any proceedings under this Act, the
burden of proving that any property specified in
the notice served under Section 6 is not illegally
acquired property shall be on the person
affected.”
45. The learned Counsel for the First
Respondent challenged the order under Section
6(1) on the ground that sufficient reasons were
not indicated and in the absence of the same,
question of burden of proof loses significance. The
First Respondent has no case before the Statutory
Authorities that the Show Cause Notice was
defective. The First Respondent in his explanation
attempted to justify the purchase by showing the
persons from whom he received money. The
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explanation gives a clear indication that his
contribution was nil. He raised the money through
gift and loans. Though he has stated that a sum of
Rs. 8,500/- was received from a relative in
Singapore, very strangely, he was not in a
position even to name the relative. Therefore, the
Competent Authority was fully justified in
rejecting the said source. A sum of Rs. 10,000/-
was received from Mr. S.A.K. Shahul Hameed.
There were no documents produced by the First
Respondent either to show that the amount was
given by him or that he was having the necessary
resources to give the amount. Similar was the case
of loan received from his brother T.S.A. Abdul
Hameed. Therefore, the Competent Authority was
right in its observation that it was only with the
tainted money, he has purchased the property.
52. The satisfaction recorded by the
Competent Authority was on the basis of
materials. The explanation submitted by the First
Respondent was considered threadbare and
detailed reasons were given. The Tribunal in its
well considered and reasoned order, concurred
with the findings recorded by the Competent
Authority.
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53. The question is whether it is open to this
Court exercising jurisdiction under Article 226 of
the Constitution of India to re-appreciate the
materials and arrive at a different conclusion. The
power of judicial review is concerned only with
the decision making process. Under the guise of
judicial review, it is not permissible to consider
the facts once again. Limited power of judicial
review does not enable the Court to scan the
materials considered by the Statutory Authorities
and to arrive at an independent conclusion.
Therefore, we are of the view that the learned
Single Judge was not justified in upsetting the
orders passed by the Statutory Authorities.
54. The exercise of power of judicial review
to interfere with a finding of fact arrived at by the
Designated Authority was considered by the
Supreme Court in Tulip Star Hotels v. Union of
Centaur Tulip Employees, 2007 (15) SCC 255 and
it was observed thus:
“9. … At this juncture, we may now consider
as to when the High Court could interfere with a
finding of fact arrived at by the Special Court, in
the exercise of its jurisdiction under Article 226 of
the Constitution. It is now well settled that the
High Court, in its Writ jurisdiction under Article
226 of the Constitution, may interfere with thePage 22 of 55
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only if the findings are based on no evidence or
based on conjectures or surmises and if no
reasonable man would on given facts and
circumstances come to the conclusion reached by
the Special Court. Therefore, it is pellucid that it
is only in these special circumstances that it would
be open to the High Court to interfere with the
findings of fact arrived at by the Special Court.”
11. In the case of Biswanath Bhattacharya vs. Union of India and
Others4, the Hon’ble Supreme Court held as follows;
“16. We reject the submission of the
appellant for the following reasons. Firstly, there
is no express statutory requirement to
communicate the reasons which led to the
issuance of notice under Section 6 of the Act.
Secondly, the reasons, though not initially
supplied along with the notice dated 4-3-1977,
were subsequently supplied thereby enabling the
appellant to effectively meet the case of the
respondents. Thirdly, we are of the opinion that
the case on hand is squarely covered by the ratio
of Narayanappa case [AIR 1967 SC 523] . The
appellant could have effectively convinced the
respondents by producing the appropriate
4 [(2014) 4 SCC 392]
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material that further steps in furtherance to the
notice under Section 6 need not be taken. Apart
from that, an order of forfeiture is an appealable
order where the correctness of the decision under
Section 7 to forfeit the properties could be
examined. We do not see anything in the ratio of
Ajantha Industries case [Ajantha Industries v.
CBDT, (1976) 1 SCC 1001 : 1976 SCC (Tax) 127]
which lays down a universal principle that
whenever a statute requires some reasons to be
recorded before initiating action, the reasons
must necessarily be communicated.”
12. In the case of M/s.Vuppalamritha Magnetic Components
Limited, Secunderabad vs. Director of Revenue Intelligence (Zonal Unit) 5,
the High Court of Hyderabad held as follows;
“10. At the outset, we are of the considered
view that the writ petition is not maintainable. The
show cause notice dated 30-07-2009, which is
under challenge in the present writ petition, is no
longer in force. The show cause notice has
already culminated in a Order of adjudication
and the order of adjudication has also been
5 [2016 SCC Online Hyd 366]
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confirmed by the Tribunal, the High Court and the
Supreme Court. The doctrine of merger has come
into play and the show cause notice is not
available any more for the petitioner to
challenge.”
13. In the case State of Orissa and Another vs. Mamata Mohanty 6,
the Hon’ble Supreme Court held as follows;
“Appointment/employment without advertisement
35. At one time this Court had been of the
view that calling the names from employment
exchange would curb to certain extent the menace
of nepotism and corruption in public employment.
But, later on, it came to the conclusion that some
appropriate method consistent with the
requirements of Article 16 should be followed. In
other words there must be a notice published in
the appropriate manner calling for applications
and all those who apply in response thereto
should be considered fairly. Even if the names of
candidates are requisitioned from employment
exchange, in addition thereto it is mandatory on
the part of the employer to invite applications
6 [(2011) 3 SCC 436]
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W.A.No.543 of 2012
from all eligible candidates from the open market
by advertising the vacancies in newspapers having
wide circulation or by announcement in radio and
television as merely calling the names from the
employment exchange does not meet the
requirement of the said article of the Constitution.
(Vide Delhi Development Horticulture Employees’
Union v. Delhi Admn. [(1992) 4 SCC 99 : 1992
SCC (L&S) 805 : (1992) 21 ATC 386 : AIR 1992
SC 789], State of Haryana v. Piara Singh [(1992)
4 SCC 118 : 1992 SCC (L&S) 825 : (1992) 21
ATC 403 : AIR 1992 SC 2130], Excise Supdt. v.
K.B.N. Visweshwara Rao [(1996) 6 SCC 216 :
1996 SCC (L&S) 1420], Arun Tewari v. Zila
Mansavi Shikshak Sangh [(1998) 2 SCC 332 :
1998 SCC (L&S) 541 : AIR 1998 SC 331], Binod
Kumar Gupta v. Ram Ashray Mahoto [(2005) 4
SCC 209 : 2005 SCC (L&S) 501 : AIR 2005 SC
2103], National Fertilizers Ltd. v. Somvir Singh
[(2006) 5 SCC 493 : 2006 SCC (L&S) 1152 : AIR
2006 SC 2319], Telecom District Manager v.
Keshab Deb [(2008) 8 SCC 402 : (2008) 2 SCC
(L&S) 709], State of Bihar v. Upendra Narayan
Singh [(2009) 5 SCC 65 : (2009) 1 SCC (L&S)
1019] and State of M.P. v. Mohd. AbrahimPage 26 of 55
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W.A.No.543 of 2012[(2009) 15 SCC 214 : (2010) 1 SCC (L&S) 508] .)
36. Therefore, it is a settled legal
proposition that no person can be appointed even
on a temporary or ad hoc basis without inviting
applications from all eligible candidates. If any
appointment is made by merely inviting names
from the employment exchange or putting a note
on the noticeboard, etc. that will not meet the
requirement of Articles 14 and 16 of the
Constitution. Such a course violates the mandates
of Articles 14 and 16 of the Constitution of India
as it deprives the candidates who are eligible for
the post, from being considered. A person
employed in violation of these provisions is not
entitled to any relief including salary. For a valid
and legal appointment mandatory compliance
with the said constitutional requirement is to be
fulfilled. The equality clause enshrined in Article
16 requires that every such appointment be made
by an open advertisement as to enable all eligible
persons to compete on merit.
Order bad in inception
37. It is a settled legal proposition that if an
order is bad in its inception, it does not get
sanctified at a later stage. A subsequentPage 27 of 55
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which was not lawful at its inception, for the
reason that the illegality strikes at the root of the
order. It would be beyond the competence of any
authority to validate such an order. It would be
ironic to permit a person to rely upon a law, in
violation of which he has obtained the benefits. If
an order at the initial stage is bad in law, then all
further proceedings consequent thereto will be
non est and have to be necessarily set aside. A
right in law exists only and only when it has a
lawful origin. (Vide Upen Chandra Gogoi v. State
of Assam [(1998) 3 SCC 381 : 1998 SCC (L&S)
872 : AIR 1998 SC 1289], Mangal Prasad Tamoli
v. Narvadeshwar Mishra [(2005) 3 SCC 422 : AIR
2005 SC 1964] and Ritesh Tewari v. State of U.P.
[(2010) 10 SCC 677 : (2010) 4 SCC (Civ) 315 :
AIR 2010 SC 3823] )”
14. Relying on the above judgments, Mr.Ramesh, learned counsel for
the appellant would submit that the procedures as contemplated under
SAFEMA were followed by affording opportunity to the affected persons.
The affected persons approached the Tribunal and the relief as such sought
for by the affected person were declined. The Writ Court has not considered
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the findings made by the Appellate Tribunal and set aside the notice issued
under Section 6(1) of SAFEMA on the ground that such notice has been
issued not in compliance with the mandatory requirements contemplated
under Section 6(1) of SAFEMA.
SUBMISSIONS ON BEHALF OF THE RESPONDENTS:
15. Mr.B.Kumar, learned Senior Counsel appearing on behalf of the
respondents 1 to 8 would oppose by stating that Section 6(1) Notice is infirm.
The mandatory requirements as contemplated under Section 6(1) has not
been complied with. Therefore, the Writ Court has rightly nullified the Notice
issued under Section 6(1). Notice of forfeiture can be issued, if the known
sources of the income and the link or nexus between the purchase of property
and ill-gotten money are established. In the absence of any materials available
on record, Notice under Section 6(1) is void. It is a precondition stipulated
under Section 6(1) that sufficient materials must be made available on record,
so as to form an opinion to issue Notice under Section 6(1) of the Act. The
Writ Court in the present case has rightly arrived at a conclusion that the
ingredients as contemplated under Section 6(1) has not been complied with.
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16. That apart, the details and the value of the properties along with
the nexus or link with the detenu are to be made available for the purpose of
sustaining the notice issued under Section 6(1).
17. In this context, the learned Senior counsel mainly relied on the
principles considered by the learned Single Judge of this Court in the case of
R.Ramakrishnan vs. Appellate Tribunal7, for forfeiture property. It is
contended that the entire gamut of law has been considered by the learned
Single Judge of this Court and the legal principles are summarised. Applying
the said legal principles, Section 6(1) Notice issued against the appellants
herein are invalid and not in compliance with the requirements as
contemplated under Section 6(1) of SAFEMA.
18. The learned Senior Counsel referred paragraph no.44 of the
Judgement in the case of Attorney General of India Vs. Amratlal
Prajivandas and others8. Nine Judges Bench of the Hon’ble Supreme Court
of India has considered the principles which would prevail over all other
judgements. Learned Senior Counsel Mr.B.Kumar further referred the
7 2011(2) MWN (Crl) 582
8 1994 (5) SCC 54
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Judgement of the Three Judges Bench of the Supreme Court India in the case
of Fatima Mohd. Amin vs. Union of India 9, wherein, paragraph no.6 the
Three Judges Bench relied on the principles laid down in Amratlal
Prajivandas case cited supra . In the said case, it is reiterated that the
properties acquired by the detenu or his relatives, must be a benami property
or acquired illegally, is to be proved. In the event of no allegation in specific,
link or nexus, then such notices are to be declared as non-erst and violative of
Section 6 of SAFEMA.
19. In the case of Kesar Devi vs. Union of India cited supra, the
Hon’ble Supreme Court again referred paragraph no.44 of Amratlal
Prajivandas case cited supra. The case of Aslam Mohammed Merchant vs.
Competent Authority and others10, is relied upon by the appellants.
However, the said case was relating to the Narcotic Drugs and Psychotropic
Substances Act, 1985 (NDPS Act). The provisions of the NDPS Act and
SAFEMA are in-comparable and thus, the ingredients and requirements,
required for initiation of action are distinct and different. Thus, the principles
in Aslam Mohammed Merchant’s case cited supra, in respect of the
9 2003 (7)SCC 436
10 2008 (14) SCC 186
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provisions under NDPS Act, may not have application in respect of the cases
under SAFEMA. Thus, the analogy made on behalf of the appellant deserves
no merit consideration.
20. The respondents have further relied on the judgement of the
Division Bench of this Court in the case of Competent Authority SAFEMA
and NDPS Acts UTSAV vs. M.Khader Moideed cited supra. The Division
Bench has referred Aslam Mohammed Merchant’s case cited supra and the
nine Judges Bench judgement in the case of Amratlal Prajivandas’s case.
21. Mr.B.Kumar, learned Senior Counsel mainly relied on the legal
principles culled out by the learned Single Judge of this Court in the case of
R.Ramakrishnan cited supra. It is reiterated that the said principles are
carved out from and out of the judgements of the Supreme Court. Therefore,
it is to be followed in the present case. The Division Bench judgement of this
Court, in the case of M.Khader Moideed cited supra has been further
followed by another Division Bench of this Court in the case of Competent
Authority vs. Smt.Ayisath Munawara11.
11 W.P.No.1333 of 2018 dated 13.10.2022
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22. The learned Senior Counsel mainly contended that the common
order passed under Section 7(1) of SAFEMA by the Competent Authority in
proceedings dated 28.04.1995 had not served on the affected person. The
copy of the common order has been handed over by the appellant in the
Court and therefore, all further proceedings are to be set aside.
23. In reply, Mr.Ramesh, learned counsel would state that the said
common order dated 28.04.1995 passed under Section 7(1) of SAFEMA was
challenged by all the affected persons before the Appellate Tribunal for
forfeited property and the Appellate Tribunal confirmed the said order on
31.01.2001. That being so, the very submission that the common order dated
28.04.1995 has been served on the affected person is incorrect.
SCOPE OF SECTION 6 OF SAFEMA:
24. Section 6(1) of SAFEMA stipulates “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 on his
behalf, his known sources of income, earnings or assets, and any other
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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”.
25. Careful reading of Section 6(1) is of paramount importance, since
Section 6(1) Notice is the basis for all further actions to be continued under
the provisions of SAFEMA. The first phrase of Section 6(1) indicates that
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 on his behalf. It
speaks about the application of the Act under Section 2 of SAFEMA.
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Therefore, the authority competent must first ensure that the provisions of
SAFEMA is applicable to a person for issuance of Notice under Section 6(1)
of the Act. The second phrase indicates that known sources of income,
earnings or assets, any other information or material available to it as a result
of action taken under Section 18 or otherwise. Therefore, a report submitted
by the Inspector under Section 18 of the Act can be taken into consideration
or the materials available on record or the information thereon may also be
considered by the authority competent. Known sources of income, earnings,
assets and any other information or materials are the prima facie materials/
informations required for the purpose of forming an opinion that the
competent authority has “reason to believe”, that all or any such properties
are illegally acquired properties.
26. The very purpose of description regarding the known sources of
income or earnings or assets or information or a report under Section 18 is to
ensure that the competent authority apply his mind for forming an opinion
that he has reason to believe that such properties are acquired illegally.
27. The phrase “reason to believe” has live link between the materials /
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informations or reports available and the application of mind on the part of
the competent authority. Therefore the requirements contemplated under
Section 6(1) are to be taken into consideration by the Competent Authority
for forming an opinion that he has “reason to believe” that all or any of such
properties are illegally acquired properties.
28. It is amply clear that the competent authority has to form an
opinion and that he has reason to believe to form such an opinion to issue
Notice under Section 6(1) of the Act. It is absolutely unnecessary for the
competent authority to arrive at a final decision in respect of the legality of
the details of the properties, materials which all are necessary for the purpose
of issuing Notice under Section 6(1) of SAFEMA.
29. To reiterate, Section 6(1) of SAFEMA require some materials on
record and such materials shall prima facie establish that all or any of such
properties are illegally acquired properties. If the competent authority has
reason to believe that such properties are illegally acquired properties, such
reasons would be sufficient for issuing a Notice under Section 6(1) of
SAFEMA.
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30. The argument on behalf of the appellant that “there must be a
conclusive material for the purpose of forming an opinion” is incorrect since
it is only a Notice issued calling upon the persons 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
the provisions of SAFEMA. Since Section 6(1) Notice is a Show Cause
Notice, to provide opportunity to the persons to whom the Act applies, it
becomes unnecessary for the authorities to arrive at a final opinion or collect
all the materials necessary for the purpose of exercising the powers under
6(1) of SAFEMA.
31. A fine distinction can be drawn between Notice under Section 6(1)
and the order of forfeiture to be passed under Section 7(1) of SAFEMA.
However, considering the Right to Property under Article 300-A of the
Constitution of India, the Parliament thought fit and imposed certain pre-
requisite conditions for forming prima facie opinion and to arrive at a
conclusion that the authority has reason to believe that all or any of such
properties are illegally acquired properties.
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32. Strict availability of documents and evidences required to invoke
Section 7(1) may not be required for issuing Notice under Section 6(1) of
SAFEMA. Even after issuance of Section 6(1) Notice, the competent
authority is empowered to conduct inquiry and drop all further proceedings.
Therefore, the requirements of Section 6(1) need not be conclusive. It would
be sufficient, if prima facie materials are available on record to form an
opinion that the authority has reason to believe that the properties are illegally
acquired property.
33. The phrase “reason to believe” is the subjective satisfaction of the
competent authority. Therefore, it is not necessary that the all the
informations and materials, for the purpose of invoking Section 7(1), is to be
considered at the time of issuance of Section 6(1) Notice. Further enquiry
after Notice under Section 6(1) may throw more light on the issues for the
purpose of invoking the provisions of SAFEMA. Since such probabilities are
inbuilt under the scheme of the Act, the scope of ingredients for issuing
Notice under Section 6(1) of SAFEMA need not be expanded so as to defeat
the very purpose and object of SAFEMA.
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34. The very object of SAFEMA is for the effective prevention of
smuggling activities, and foreign exchange manipulations, which are having a
deleterious effect on the national economy. It is necessary to deprive persons
engaged in such activities and manipulations of their ill-gotten gains.
Therefore, mere issuance of Notice, based on certain prima facie material,
would not cause prejudice to the persons since enquiry will be conducted for
the purpose of arriving at a decision to invoke Section 7 of the Act. Thus, the
arguments advanced on behalf of the appellants that Section 6(1) Notice is
invalid, is unacceptable and stands rejected.
35. The requirements of material contemplated under Section 6(1) of
SAFEMA is only to establish a prima facie case for forming an opinion that
the authority has reason to believe that all or any of such properties are
illegally acquired properties. Once Section 6(1) Notice is issued, burden of
proof lies on affected person. The noticee, on receipt of Notice is at liberty to
disprove the prima facie opinion formed by the competent authority.
Therefore, Section 6(1) Notice can be issued if the competent authority has
reason to believe, based on the materials available on record. Such materials
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may be insufficient for forfeiture of property under Section 7.
(I) Validity of Notice issued under 6(1) of SAFEMA;
36. Validity of Section 6(1) Notice was never challenged either before
the competent authority or before the appellate authority. It is not the case of
the appellants that no reasons were recorded but the reasons recorded were
not sufficient.
37. Value of the properties, ‘known sources of income’ of the
relative/holder of properties and other information were considered and stated
in the notice. The said notice was issued based on the statement of wealth
return filed by the respondents. Thus the Competent Authority has complied
with the requirements, while issuing Notice under Section 6(1) of the Act.
38. It has been clarified by the Hon’ble Supreme Court in Attorney
General for India & Ors, vs. Amratial Prajivanda & Ors. cited supra, as
follows in paragraph- 44:
“It is equally necessary to reiterate that the
burden of establishing that the properties
mentioned in the show-cause notice issued underPage 40 of 55
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W.A.No.543 of 2012Section 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 the matter, the
apprehension and contention of the petitioners in
this behalf must be held to be based upon a
mistaken premise.”As clarified above in the judgement, the “connecting link” is required only in
case if the properties stood in the name of wife and acquired from their
individual income. In the present case all the properties are in the names of
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W.A.No.543 of 2012detenu’s wife and relatives. It is further seen from the wealth return and as
admitted, money has been drawn from detenu’s account. Therefore, the
requirement of connecting link loses its-significance.
39. Kesar Devi vs. Union of India cited supra is in conformation with
the Attorney General’s case. In Kesar Devi’s case supra, the petitioner was
wife of the detenu. She was never assessed to tax and had no known sources
of income. In the notice under Section 6(1) it was simply stated that Kesar
Devi was the wife of detenu and therefore a person under the Act. The Court
accepted the reasons recorded as sufficient.
(II) Respondents Replying on Precedents, which are Distinguishable and
Inapplicable:
40. By the decision in Attorney General of India & Ors. vs. Amratlal
Prajivanda & Others cited supra, the SAFEMA Provisions and Act were
held to be constitutionally valid by the 9 Judges Bench of Hon’ble Supreme
Court. The next judgment in Kesar Devi vs Union of India cited supra
confirms and in consonance with the attorney general case.
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41. The other three subsequent decisions which are cited, namely,
(i)Fatima Mohd. Amin (Dead) through Lrs vs. Union of India
cited supra;
(ii)P.P.Abdulla & Anr. vs. Competent Authority & Ors.12; and
(iii) Aslam Md. Merchant vs. Competent Authority cited supra.
have to be read in the light of the Constitution Bench decision since they are
decisions by Benches comprised of lesser number of Judges. It is obvious that
none of these subsequent decisions could have intended taking a view
contrary to that of the Constitution Bench in Attorney General vs. Amratlal
Prajivandas’s case cited supra. The law laid down in paragraph 44 by the
Constitution Bench that there ought to be the connecting link between those
properties in the name relative/associate and the convict/detenu, the burden of
disproving which as mentioned above is upon the relative/associate.
42. In Fatima Mohd. Amin (Dead) Through LRs vs. Union of India
& Another case cited supra, the Hon’ble Supreme Court held that the
contents of the 6(1) notice therein even if taken on their face value did not
disclose any reason warranting action against the appellant. It was observed
that no allegation whatsoever has been made to the effect that there exists any
12 (2007) 2 SCC 510
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link or nexus between the property sought to be forfeited and the illegally
acquired money of the detenu. It may be noted that, the property that was
sought to be forfeited belong to the mother, whereas the detenus were her two
sons and it was the case of the respondent that the illegal activity was carried
out by two sons, and the property was acquired in the name of the mother
from the ill gotten monies.
43. In the present case, admittedly, the said properties are purchased
by the detenu in the names of the respondent. The link or nexus is not
required in view admitted flow of fund from the detenu. Therefore on facts,
the above citation in Fatima Mohd. Amin is not applicable to the present
case. In Kesar Devi’s case cited supra, the Court had distinguished the
Fatima Md. Amin case.
44. In P.P.Abdulla & Anr. v. Competent Authority & Ors., case cited
supra, the Hon’ble Supreme Court applied the decision in Fatima Mohd.
Amin cited supra. The Hon’ble Supreme Court observed as follows:
“9. In our opinion, the facts of the case are
covered by the decision of this Court in Fatima
Mohd. Amina v. Union of India (supra). In thePage 44 of 55
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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.”
45. In the case on hand, sufficient reasons have been duly recorded. On
facts, the above judgement is not applicable to the facts of the case of
respondents. According to the clarification given by Constitutional Bench in
Attorney General’s case supra, the link or nexus is required to be mentioned
only in case of relative/associate. The subsequent judgement in Kesar Devi
vs. union of India cited supra was also of the same view.
46. Unfortunately Attorney General’s case supra and Kesar Devi’s
case supra were not brought to notice of the Court, while deciding
P.P.Abdulla’s case supra. In P.P.Abdulla’s case has incorrectly held that link
or nexus has to be mentioned in the notice even for detenu, which is contrary
to the Constitutional Bench case. In the above cited case, P.P.Abdulla was
detenu. Thus the above judgement in P.P.Abdulla has been rendered per
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incuriam.
47. In Aslam Mohd. case supra, the Court has observed in para-36
that the Competent Authority himself was not satisfied as to the reasons. The
Hon’ble Court was of NDPS Act. Under the NDPS Act, the authorities had
power of “freezing”, “tracing”, “identifying” the properties and were
therefore bound to establish the proof that the property was derived from
illicit traffic. Further, the definition of “Property” and “Illegally Acquired
Property” under the Narcotics Drugs and Psychotropic Substances (NDPS)
Act, 1985 is different from the definition of SAFEMA. Therefore on facts, the
Court in Aslam Mohammed Merchant’s case supra held that, under the
scheme of the NDPS Act, the necessity of establishing link or nexus is writ
large on the face of the statutory provision as would appear from the
definition of “Illegally Acquired Property” (under NDPS) as also that of
“Property” (NDPS). On the other hand, under the provisions of SAFEMA
there is no requirement of establishing the link. Thus on facts, Aslam
Mohammed Merchant’s case supra is not applicable to the case on hand.
48. That is, nexus between the income derived from illegal activity and
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the acquisition of the property need not be established where the property
concerned is that of the detenu himself. The said nexus is required to be
established only when the detenu’s property is held benami in the name of
any other person or relative, It is only in such cases that the nexus between
the income derived from illegal activity, and the property is required to be
established.
49. A perusal of the said subsequent judgments indicates that none of
these Judgments have considered paragraph 44 of Attorney General’s case
supra in proper perspective. The observations made in the above judgments
that even in the cases where the property is held by the detenu himself, there
should be connecting link or nexus, should be held as made in ignorance of
and without considering the law laid down in paragraph 44, which is binding.
50. Therefore, not only the decision in Attorney General’s case supra
must be followed on account of the larger strength of the Bench that delivered
it but all the subsequent decisions, which taken contrary view to the Attorney
General’s case supra and Kesar Devi’s case supra must be held to be per-
incuriam and hence not binding, since they have not taken into account the
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W.A.No.543 of 2012
ratio of the judgment of the Constitution Bench. As per the doctrine of ‘per
incuriam’, any judgment, which has been passed in ignorance of or
without considering a statutory provision or a binding precedent is not
good law and the same ought to be ignored.
51. Therefore, the notice issued by Competent Authority is valid and in
accordance with the provisions and the properties mentioned therein are
liable to be forfeited to the Government.
52. In the case of Biswanath Bhattacharya vs.Union of India and
others case cited supra, the Apex Court held as follows:
“39. If a subject acquires property by means
which are not legally approved, the sovereign
would be perfectly justified to deprive such
persons of the enjoyment of such ill-gotten wealth.
There is a public interest in ensuring that persons
who cannot establish that they have legitimate
sources to acquire the assets held by them do not
enjoy such wealth. Such a deprivation, in our
opinion, would certainly be consistent with the
requirement of Articles 300-A and 14 of thePage 48 of 55
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W.A.No.543 of 2012Constitution which prevent the State from
arbitrarily depriving a subject of his property.
53. The question of principles of natural justice has been dealt with in
the case of Smt.Rukhiya vs. The Registrar the Appellate Tribunal for
Forfeited Property13, as under:
“42. I have carefully gone through the order
passed by the competent authority dated
20.6.1996. I am unable to accept the contention of
the petitioners that there is a violation of
principles of natural justice. A perusal of the
order would show that the petitioners were given
sufficient opportunity by the competent authority
before passing the composite order. A common
reply was filed by the petitioners on 30.3.1996
followed by personal hearings on several dates.
During the course of the proceedings, the
petitioners filed written replies on 24.12.88,
18.1.89, 18.3.91, 21.3.91, 19.4.95 and 25.5.95.
Through those replies, the petitioners had
explained the sources of acquisition of the
properties under notice. Thus, after hearing the
petitioners and perusing their written objections,
13 2014 SCC OnLine Mad 20
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W.A.No.543 of 2012
the competent authority passed the composite
order. He has also recorded that during the
course of the proceedings, copies of several
documents such as purchase deeds, passport of
the detenu, SSLC Certificate, NRE Account, details
of cheques issued, pass book of share and loan
account of the petitioners have been filed. Thus, it
is clear that the petitioners have been given full
opportunity to furnish the documents which they
would like to rely upon. The only grievance set out
in these writ petitions on the question of principles
of natural justice is that the competent authority
relied upon a statement of the petitioner dated
6.2.1984 said to have been given under the
COFEPOSA proceedings. According to the
petitioners, the copy of the said statement was not
furnished to the petitioners and therefore it
violates the principles of natural justice. In fact a
perusal of the order of the competent authority
would show that he has not come to the conclusion
based on the said statement alone and on the
other hand he has reasoned out for his conclusion
at paragraph No. 4 itself based on the passports
produced by the detenu/petitioner.”
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W.A.No.543 of 2012
54. The documents produced by the respondents and the report
submitted by the authorities were taken into consideration. Since some of the
cases relied on by the respondents are distinguishable on facts, the same
cannot be followed as precedent in the present case. The legal principles in
the case of Attorney General supra enumerates 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 the relative or an
associate of the convict / detenu, are not illegally acquired properties of the
convict / detenu, lies upon such relative / associates. He must establish that
the said property has not been acquired with the moneys or assets provided
by the detenu / convict or that they in fact did not or do not belong to such
detenu / convict.
55. The Hon’ble Supreme Court of India reiterated that there ought to
be a connective link between those properties and the convict/ detenu, the
burden of disproving which, as mentioned above, is upon the relative /
associate. In view of the said legal principles settled by the 9 Judges Bench of
the Supreme Court of India, the arguments advanced on behalf of the
respondents that even before issuance of 6(1) Notice, there must be complete
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W.A.No.543 of 2012
materials available on record and link between the properties and the detenu
must be established is incorrect proposition and if such an argument is
accepted, the very purpose and object of SAFEMA would be defeated. Rule
of constructive interpretation of statute became necessary in order to ensure
that the object of the enactment is fulfilled.
CONCLUSION:
56. The Writ Court has not considered the scope and the spirit of
Section 6(1) of SAFEMA. The requirements under Section 6(1) to form an
opinion and to arrive a conclusion that there is a reason to believe to issue
notice had not been taken into consideration with reference to the legal
position settled by the Apex Court of India. 6(1) Notice was responded,
inquiry conducted, common order of forfeiture under Section 7(1) was
passed. The affected persons filed an appeal before the Appellate Tribunal
and the Tribunal confirmed the common order passed by the Competent
Authority. In the writ petition filed thereafter, the Writ Court has set aside the
notice issued under Section 6(1) on the ground the requirements are not
complied with.
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W.A.No.543 of 2012
63. Therefore, the decision of the Writ Court is not in consonance with
the scope and spirit of SAFEMA. Consequently, the writ order impugned
dated 08.04.2011 passed in W.P.No.7609 of 2001 is set aside and the Writ
Appeal stands allowed. No costs. Connected MP is closed.
[S.M.S., J.] [C.K., J.]
19.08.2024
Jeni
Index : Yes
Speaking order
Neutral Citation : Yes
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W.A.No.543 of 2012
To
The Appellate Tribunal for Forfeited Property
Loknayak Bhavan, 4th Floor,
Khan Market, New Delhi – 3.
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W.A.No.543 of 2012
S.M.SUBRAMANIAM, J.
and
C.KUMARAPPAN, J.
Jeni
W.A.No.543 of 2012
19.08.2024
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