Vipin Sanghi, J. (Oral)

1. This petition has been preferred under Article 226 of the Constitution of India to assail the order dated 28.11.1994 passed under section 7(1) and 7(3) of Smugglers And Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA), passed by the competent authority; the appellate tribunal order dated 08.03.1996 in FPA No. 4/DLI/95, and; the rectification order dated 08.05.1996 under section 20 of SAFEMA.

2. The petitioner, Piare Lal was served with a detention order dated 08.11.1976 issued in the name of Governor of Punjab, inter alia, stating that with a view to prevent him from dealing in smuggled goods, it is necessary that he be detained. A declaration was also issued by the Governor of Punjab under section 12A(2) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (`COFEPOSA') declaring that the detention is necessary, and that it is not in public interest to disclose the facts or to give an opportunity of making a representation to the detenu.

3. Following the said detention, which was unsuccessfully challenged by the petitioner, a notice dated 10.05.1978 was issued by the competent authority under section 6 of SAFEMA stating that he had reason to believe that the properties mentioned in the schedule have been acquired by him illegally within the meaning of clause (c) of sub section (1) of section 3 of SAFEMA. The petitioner was required to indicate the sources of his income, earnings and assets out of which, or by means of which the petitioner had acquired the scheduled properties, and also to show cause as to why they should not be declared as illegally procured properties and forfeited under the Act. The said notice pertained to the following properties:

"THE SCHEDULE

Description of the property Name of the present holder of property

(1) Plot Nos. 35 to 38, Chandrauli, Delhi Shri Piara Lal

(2) Plot No. 13/1, 14/15, bearing Khasra

No. 21-24 in village Karawal Nagar,

Ilaqa Shahdra, Delhi "

(3) Plot No. 2, B-Block, Laxmi Industrial

Enclave, V, Gharota, Pargna Loni,

Tehsil Ghaziabad, Meerut "

(4) 1/2 share in plots bearing Khasra Nos.

13 to 17 in Karawal Nagar, Ilaqa

Shahdra, Delhi "

(5) 110 Tolas gold ornaments, "

(6) Cash in Hand "

4. Section 6 of SAFEMA obliges the competent authority to record his reasons to believe that the properties in respect whereof the notice is issued are illegally acquired properties. The "reasons to believe" recorded by the competent authority in this case were to the effect that the Commissioner of Income Tax, vide letter dated 24.02.1977 had furnished certain information. The position of the petitioner's income tax returns and assessment was disclosed as follows:

Asst. Years Income returned Income assessed

1967-68 11,300 P

1968-69 11,300 P

969-70 11,300 P

970-71 11,300 P

1971-72 11,300 1,500

1972-73 11,300 22,050

973-74 11,300 2,500

1974-75 11,300 36,062

1975-76 11,300 25,000

5. The competent authority recorded:

"A perusal of the above chart bring out one striking feature. The income returned for all the years from 1967-68 to 1975-76 is the same viz. Rs. 11,300, all the returns have been filed on one date viz. 21.1.76 and all the assessments have also been completed on a single date viz. 19.1.77. The source of this income is stated to be Dalali business, but no accounts are stated to have been maintained. Assessments have been completed for the assessment years 1971-72 to 1975-76. It will be noted that in each year additions have been made to the income returned, the heaviest being in assessment years 1972-73, 1974-75, 1975-76. The additions in these years are on account of various investments made and expenditure incurred by Piara Lal in these years. As a perusal of para 3 would indicate, Piara Lal's investments in real estate were made in the periods relevant to assessment years 1972-73 and 1974-75. In the period relevant to assessment year 1972-73, Piara Lal has made an investment of Rs. 10,800 in the Chandrauli Plot in Delhi. In the co