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High Court Of Delhi
SHANTI DEVI - Appellant
Versus
UNION OF INDIA - Respondent
C.M. 782 of 1995
Decided On : 05/15/1998
SAFEMA - Illegally Acquired Property - Burden of Proof - Relatives and Associates - Connecting Link or Nexus - Forfeiture of Property.
Fact of the Case:
The petitioner, Shanti Devi, challenged the forfeiture of her house property under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA). The property was acquired by her in 1961, while her husband, Basant Lal, was detained under COFEPOSA in 1975 for smuggling activities. The Competent Authority and the Appellate Tribunal held that the property was illegally acquired and forfeited it to the Central Government.
Finding of the Court:
The Court held that the burden of proof under Section 8 of SAFEMA, which places the onus on the person affected to prove that the property is not illegally acquired, is applicable only if there is a connecting link or nexus between the holding of the property and the illegal activity of the detenu/convict. In this case, there was no evidence of any illegal activity by Basant Lal prior to 1967, when the petitioner acquired the property. Therefore, the Court held that the Competent Authority did not have reason to believe that the property was illegally acquired and that the forfeiture order was not justified.
Issues: 1. Whether the burden of proof under Section 8 of SAFEMA is applicable to relatives and associates of the detenu/convict without establishing a connecting link or nexus between the holding of the property and the illegal activity. 2. Whether the Competent Authority had reason to believe that the petitioner's property was illegally acquired.
Ratio Decidendi: 1. The Court held that the burden of proof under Section 8 of SAFEMA is not applicable to relatives and associates of the detenu/convict unless there is a connecting link or nexus between the holding of the property and the illegal activity. 2. The Court held that the Competent Authority did not have reason to believe that the petitioner's property was illegally acquired because there was no evidence of any illegal activity by Basant Lal prior to 1967, when the petitioner acquired the property.
Final Decision: The Court allowed the petition, quashed the notice of forfeiture, the order of the Competent Authority, and the order of the Appellate Tribunal, and set aside the forfeiture of the petitioner's share in the house property.
( 1 ) BY this petition under Articles226/227 of the Constitution of India, the petitioner seeks to lay challenge to an order dated 28. 4. 80 passed by the Competent Authority under Section 7 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (hereinafter the Act, for short), maintained in appeal by the order dated 1. 8. 94 passed by the Appellate Tribunal For Forfeited Property, New Delhi.
( 2 ) THE facts in so far as relevant for the purpose of the present petition may briefly be noticed. The property forming subject matter of the impugned proceedings was as under:
ANNEXURE (i) Right, title and interest pertaining to half share in House No. 1135, Chatta Madan Gopal, Maliwara, Delhi. (ii) Amounts due to Smt. Shanti Devi from : (a) Suresh Chand Rajender Kumar, 572 Katra Babu Pearcy Lal, Chandni Chowk, Delhi-110006. (b) Shri Ramesh Chand, 5 Hastings Lane, New Delhi. (e) Skytone Electrical (India) Manufacturer of Cables and Wires, 43. Industrial Area, Faridabad-121001 (d) M/s. Pragati Construction Co. Engineers and Contractors, VV-49, Greater Kailashi, New Delhi-11048. (e) M/s. Ganpat Rai Jagdish Narain, General Cloth Merchants and Commission Agents, Katra Marwari, Nai Sarak, Delhi-6. (f) Shri Hira Chand Jain, Delhi (iii) Credit balance in Saving Bank (S. B. Sarafa account with Union Bank of (Market, India. (Chandni Chowk, (iv) F. D. R. in Union Bank of India (Delhi.
( 3 ) THE petitioner Shanti Devi was the wife of one Basant Lal. The marriage had taken place in the year 1945. On 30. 7. 75 Basant Lal was ordered to be detained under Section 3 (1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 with a view to preventing him from dealing in smuggled goods viz. foreign marked smuggled gold otherwise then by engaging in transporting or concealing or keeping smuggled goods.
3. 1. On 27. 9. 77, the Income-tax Office, Spl. Circle-VI (Addl.), New Delhi furnished an information under Section 16 (2) of the Act to the Competent Authority. By reference to the property stated hereunder the ITO communicated that the said property was illegally acquired property (as far as known to the Incom-tax Dep. tt.) within the meaning of Section 3 (1 ) (c) (iv) of the Act: (i) H. No. 1135, Chatte Madangopal Maliwara New Delhi.
2. Parmeshwari Dass Rs. l4,915. 00 Ramrichpal Bansidhar Rs. 15,226. 00 Orient Electric Co. Rs. 1,000. 00 Hirachand Jain Rs. 6,000. 00 Ratanlal Rs. 10,000. 00
3. Union Bank of India Rs. 4,683. 00 cash in hand Rs. 8,72 1/ Rs. 60. 546. 00 It was also stated that Smt. Shanti Devi was the wife of Basant Lal and hence a relative within the meaning of Section 2 (2) of the Act.
32. On 29. 7. 78 notice was issued by the Competent Authority to the petitioner calling upon her to indicate the sources of her income, earnings or assets out of which or by means of which the said properties could have been acquired alongwith evidence and other relevant information and particulars. The petitioner partici pa tea in the proceedings.
33. By order dated 28. 4. 80 the Competent Authority formed an opinion that the said properties were illegally acquired properties of Smt. Shanti Devi within the meaning of Section 3 (l) (c) (i) to (iv) of the Act. The Competent Authority also expressed anopinion that the affected person had completely failed to discharge her harden which under Section 8 of the Act is cast on her. Hence the properties were forfeited to the Central Government free from all encumbrances.
3. 4. As already stated the petitioner preferred an appeal which has been dismissed.
( 4 ) AT the hearing the learned Counsel for the petitioner submitted that the petitioner is confining her challenge to the impugned orders to the extent of house property only and was givingup her claims to the remaining properties. We would, therefore, notice hereafter the facts relevant only to the house property.
( 5 ) IT may be placed on record that Smt. Shanti Devi, the petitioner
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