1997 Supreme(SC) 1486

1997(10) Supreme 6
SUPREME COURT OF INDIA
(From Bombay High Court)
S.B. Majmudar & M. Jagannadha Rao, JJ.
Aamenabai Tayebaly & Ors. -Appellants
versus
Competent Authority under SAFEMA & Ors. -Respondents
Civil Appeal No. 11836 of 1995
Decided on 19-11-1997
Counsel for the Parties
For the Appellants : R.F. Nariman, Sr. Advocate, Mrs. M. Karanjawala, Advocate.
For the Respondents : K.N. Shukla, Sr. Advocate, T.C. Sharma, S. Rajappa, S.N. Terdol, A.P. Mayee and A.M. Khanwilkar, Advocates.

Headnote:(i) Constitution of India-Art. 136-Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976-Sections 6, 7 & 11-Appeal against judgment confirming order forfeiting property under SAFEMA-Detention order under COFEPOSA-Wife of detenu purchased a property-Order u/s 7 holding property was illegally acquired, so forfeited to Central Government-Challenged-Writ petition-Order of forfeiture stayed on an undertaking by her that she would not dispose of property pending final disposal of writ petition-Petitioner sold away property to appellants during pendency of proceedings-Detenue died-Breach of undertaking-Plea of purchaser that he purchased property in good faith-Contempt proceedings-She was held guilty-She underwent sentence imposed-Order of forfeiture of second property-Appeal-Whether provisions of SAFEMA apply to sale transaction between widow of detenu and purchaser?-(Yes)-Whether purchaser was a bonafide purchaser for value without notice?-(No)-Whether forfeiture of purchaser s property can be treated as double forfeiture?-(No)-Whether provisions of Section 9 of SAFEMA could be applied?-(No)

       Held : The COFEPOSA detenu Talab Haji Hussein was a smuggler. When the purchaser purchased the said flat standing in the name of the wife of the said smuggler, in usual course of conduct the said purchaser must have been put on enquiry as to how COFEPOSA detenu s wife Tahira Sultana became the owner of this property and what had happened to this property in the proceedings under SAFEMA and whether title of the said flat was clear or not. No such enquiry seems to have been made and it is not the case of the purchaser that any such enquiry was made by him at the relevant time when he entered into the said transaction pending the writ petition in the Bombay High Court. Thus on broad probabilities of the case it must be held that purchaser willingly and with open eyes played with fire and purchased litigation and it is too tall a claim on his part to submit that he was a bona fide purchaser for value without notice. Such stand does not bear scrutiny on the touchstone of probabilities. But even that apart once the writ petition filed by Tahira Sultana challenging forfeiture order of 12th October 1977 got dismissed by the Bombay High Court and once that order became final the original order of forfeiture of this property dated 12th October 1977 operated in full swing and the result was that as per Section 7 sub-section (3) of SAFEMA the said property stood forfeited to the Central Government free from all encumbrances. Therefore, it must be held that by 12th October 1977 the property in dispute had ceased to belong to purchaser s vendor Tahira Sultana and had vested in the Central Government. Consequently when she purported to sell this property on 30th July 1981 to the purchaser Tayab Ali she can be said to have sold the property which had already ceased to belong to her and she could not pass any valid title in favour of Tayab Ali in connection with the said property which no longer belonged to her since 1977. It is, of course, true that when she sold the said property the order of forfeiture had been stayed by the High Court but, as seen earlier, it was a limited stay subject to the condition of inalienability of the property by Tahira Sultana and breach of such undertaking, which was a substitute for an injunction, would make that transaction voidable and its efficacy had to be seen in the light of the final result of the writ petition and once the final result was against Tahira Sultana, whatever she did in the meantime became an exercise in futility. (Para 10)

       Further held that the transaction of purchase by the appellants predecessor Tayab Ali was also hit by Section 11 of SAFEMA. Consequently in 1981 when the purchaser purchased this property from Tahira Sultana she had no interest in the said flat which she could convey to the appellants predecessor. In substance it amounted to selling of Central Government s property by a total stranger in favour of the purchaser. No title, therefore, in the said property passed to the appellants predecessor. Appellants predecessor, therefore, had no legal defence against the claim of the authorities in calling upon the appellants as heirs of the original purchaser to vacate and hand over the possession of the property to the Central Government as full owner thereof. (Para 10)

       (ii) Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976-Section 7-Detenue detained under COFEPOSA -Property purchased by wife of detenu-Forfeiture of-Writ petition-Property sold in breach of undertaking, during pendency of proceedings-Second property purchased utilising a part of sale proceeds-Forfeiture of second property-Whether amounts to double forfeiture?-(No)

       Held; it cannot be said that the original forfeiture of Dharam Jyoti Building flat on 12th October 1977 was in any way affected by the subsequent forfeiture of another immovable property purchased by the widow of original COFEPOSA smuggler when she purchased the second flat. The said transaction was quite independent of the earlier transaction which had already resulted in forfeiture of the disputed property. It is not as if that Dharam Jyoti Building flat is being forfeited twice. Consequently the forfeiture of the Dharam Jyoti flat on 12th October 1977 by the competent authority must be treated to be quite an independent transaction as compared to the latter order of forfeiture of Shivasthan Flat on 18th June 1987. The latter order of forfeiture of entirely different immovable property cannot retrospectively invalidate the earlier order of forfeiture of 12th October 1977 pertaining to Dharam Jyoti Building flat. At the time when the earlier order of 12th October 1977 was passed the said disputed property clearly reflected the utilisation of tainted money of Rs. 88,562/-. If subsequent dealing with the said property is found to be unauthorised and inoperative in law and if such subsequent transaction qua the said property remains a still-born one no life can be infused in it on account of the subsequent forfeiture of some other property of the original vendor when a subsequent forfeiture has stood on its own and has become final. (Para 11)

       (iii) Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976-Section 9-Fine in lieu of forfeiture-Forfeiture of property-Writ petition-Appellant purchased property despite there being an injunction and an undertaking by his vendor pending writ proceedings-Writ petition confirmed order of forfeiture of this property purchased by appellant-Such a still-born transaction cannot be resurrected by passing an order of fine in lieu of forfeiture. (Para 12)