ASHOK KUMAR Vs. COMPETENT AUTHORITY

JUDGEMENT

(1.) Challenge in this writ petition is to the order passed by the Competent Authority and the Appellate Tribunal constituted under the Smugglers & Foreign Exchange Manipulators (forfeiture of property) Act, 1976 (short the Act). According to the petitioner, the conditions requisite for application of the Act are non-existent, there was no reason for proceeding against the petitioner under the Act and the authorities have not brought on record any connecting link or nexus between holding of the property or assets by the petitioner with illegal activity of the detenu/convict.

(2.) Background facts leading to the filing of the petition are as follows: Chiranji Lal, father of the petitioner was detained under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (in short, COFEPOSA). The order of detention was passed on 19.12.1974. Reason for the detention was that on 23-10-1974 shop of Chiranji Lal was raided by the Customs authorities and during such raid certain contraband articles were found. Articles were cigarette lighters, pen knife, spray lotion, transistor, ladies sarees, T- shirts, which were seized, and a penalty of Rs. 10OO.00 was imposed. But the penalty order was revoked by the Collector of Customs (Appeals) taking into account the low value of the properties seized. Penalty imposed was directed to be refunded and confiscated goods were released. Since the detention of Chirangi Lal was under Section 3(1) of COFEPOSA he was held to be covered under Section 2(2)(b) of the Act, and the petitioner being his eldest son under Section 2(2)(c). Petitioner is employed in State Bank of India, Dehradun from 1972. He purchased a plot of land on 6-1 -1976 by registered sale deed in Dehradun for a consideration of Rs. 12,000.00 and a house was constructed thereon. According to the petitioner, ground floor was constructed during the period 1976-78 at a cost of Rs. 50,000.00 and the first floor was constructed during 1981-82 at a cost of Rs. 80,000.00 approximately. The competent authority appointed under Section 3(b) of the Act issued a notice under Section 6(1) of the Act on 29.1.1988 for forfeiture of the properties i.e. right, title and interest in respect of the house referred to above i.e. No. 2/4, Rest Camp, Dehradun and in respect of life insurance policy No. 26240411 for Rs. 10,000.00 and deposit in bank account No. 24482 in State Bank of India and deposit in joint bank account No. 29276 in the name of the petitioner and his wife Smt Rita Sharma. By order dated 9.2.1989, passed under Section 7(1) and 7(3) the competent authority held that the properties mentioned in the notice under Section 6(1) of the Act were illegally acquired and therefore directed it to be forfeited to. the Govt of India. Petitioner filed an appeal before the Appellate Tribunal as constituted under section 12 of the Act. Out of three members of the Tribunal, two members held that the competent authority's order was justified in the circumstances of the case, while the third member i.e. the Chairman, took a different view. The orders of Competent Authority and the Tribunal, are under challenge in this writ petition.

(3.) Learned counsel for the petitioner, as indicated at the outset, has questioned the legality of the orders on various grounds noted above. Strong reliance has been placed on certain observations of the Apex Court in Attorney General for India Vs. Amratlal Prajivandas, AIR 1994 SC. 2179 and Shanti Devi Vs. Union of India, 73(1998) DLT 477. In essence, it is submitted that the Income-tax authorities accepted the stand of the petitioner that the constructions were made by the petitioner out of his own funds and accordingly he was assessed to income-tax. For initiation of proceedings against any person under the Act, reasons are to exist and it has not been shown as to what reasons exist for initiation of the proceedings. With reference to Section 6 of the Act, it is stated that the Competent Authority must have reasons to believe, which are to be recorded in writing, that the properties sought to be forfeited to the Central Government were illegally acquired properties. There is no reasons for coming to such a conclusion. Additionally, it is submitted that to attract forfeiture, the property must have been acquired illegally by the detenu or convict as the case may be. The Act has no application even if a person in whose name it stands has acquired it illegally. It is further submitted that for applying the rule of evidence as contained under Section 8 casting a burden of proof on the person affected there must be some link or nexus between the holding of the property or assets by the person proceeded against and illegal activity of detenu/convict. This link or nexus has to be established by the authorities.