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2024 Supreme(Online)(DEL) 6846
HIGH COURT OF DELHI
Sanjeev Narula, J
SHRI KAMLESH KHANTWAL & ANR. – Appellant
Versus
THE COMPETENT AUTHORITY AND ADMINISTRATOR SAFEM – Respondent
W.P.(C) 11614/2024
AVINASH
The execution of a registered sale deed is essential for legal ownership of property, and prior payments do not confer rights without proper documentation.
Headnote:(A) Narcotic Drugs and Psychotropic Substances Act, 1985 - Sections 20 and 68F(1) - Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 - Seizure of property linked to drug trafficking - The Appellate Tribunal upheld the seizure of property acquired by Petitioner No. 1, finding no credible evidence of legitimate income for its purchase. The Court ruled that the sale deed dated 07th January 2021, executed within six years of the incident, rendered the property liable for seizure under the NDPS Act. (Paras 1.1, 4, 8)
(B) Property Law - Transfer of Property Act, 1882 - Registration Act, 1908 - Legal recognition of property transfer - Ownership is conferred only upon execution of a registered sale deed; prior payments do not establish legal title. (Paras 4, 5)
Facts of the case:
The petitioners challenged the seizure of a plot of land valued at INR 12 lakhs, arguing that the property was acquired through legitimate means, with payments made over time. The Appellate Tribunal dismissed their appeal, confirming the seizure.
Findings of Court:
The Court found the seizure justified, as the sale deed's date fell within the six-year period prior to the incident, and no credible evidence was presented to support the claim of legitimate income.
Issues: The main issues were whether the property was legally acquired and if the Appellate Tribunal erred in its decision.
Ratio Decidendi: The Court held that the execution of a registered sale deed is essential for legal ownership, and the petitioners failed to provide sufficient evidence to prove legitimate acquisition of the property.
Result: Petition dismissed.
O R D E R
1. The brief factual background leading to the filing of the petition, as presented in the petition, is summarised as follows:
1.1. On 17th January, 2023, an FIR No. 23/2023 was registered against Petitioner No. 1– Sh. Kamlesh Khantwal alias Kamlesh Kumar, who was found to be in possession of 1050 grams of Cannabis, punishable under Section 20 read with Section 8 of the Narcotic Drugs and Psychotropic Substances Act , 19851.
1.2. After registration of the FIR, the investigating officer conducted a financial investigation into the properties acquired by Petitioner No. 1, both in his name and in the names of his relatives, which were suspected to have been purchased with illicit income generated through drug trafficking
1 “NDPS Act”
W.P.(C) 11614/2024 Page 1 of 6 activities. Based on these investigations, a freezing order (No. 01/2023) was issued on 19th April 2023 under Section 68F(1) of the NDPS Act. This order resulted in the seizure of various assets, including vehicle, bank account and immovable property—a plot of land measuring 0.016 hectares, bearing Khatouni No. 29, situated in Village Lalpur, Patti Sukhro, PS Kotdwar, Pauri Garhwal, Uttarakhand, valued at INR 12 lakhs2.
1.3. Following the issuance of the freezing order, notices were sent to the affected persons, including Petitioner No. 1, who subsequently appeared before the competent authority and filed objections to the seizure. After considering these objections, the competent authority, through an order dated 17th May, 2023, released the vehicle and the bank account held by Petitioner No. 1 with Union Bank of India. However, the seizure concerning the Subject Property was confirmed.
1.4. Aggrieved by this confirmation of seizure, the Petitioners filed an appeal against the order dated 17th May, 2023 [FPA-ND-624/DLI/2023] before the Appellate Tribunal under Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act , 19763. However, through the impugned order dated 07th May, 20244, the Appellate Tribunal dismissed the appeal, thereby upholding the seizure of the Subject Property.
2. The Petitioners have challenged the impugned Appellate Order on several grounds, primarily arguing that the Appellate Tribunal failed to consider critical evidence regarding the acquisition of the Subject Property. The Petitioners contend that, as corroborated by the statement of Mr. Sundar Lal Gaur, the seller of the Subject Property, the sale consideration was
2 “Subject Property”
3 “SAFEMA”
4 “Appellate Order”
W.P.(C) 11614/2024 Page 2 of 6 transferred to him in tranches over a period of time, beginning in 2010. According to the Petitioners, possession of the Subject Property was handed over to them in 2012-13, and they have been utilizing the land for farming and agricultural purposes since that time. It is further contended that the Petitioner No.1 retired in the year 2016 and received pension funds, which was later used to pay the remaining amount to the seller. Further, the Petitioners point out that the seller, Mr. Gaur, has admitted to receiving an amount of INR 6 lakhs from Petitioner No.1 a considerable time ago, as specifically mentioned in the sale deed dated 07th January, 2021. Based on these facts, the Petitioners contend that the financial transactions related to the acquisition of the Subject Property were effectively completed by 2016. Consequently, they argue that the mere fact that the formal registration of the Subject Property was completed in 2021 should not serve as the sole basis for the seizure thereof under the NDPS Act. The Petitioners assert that the Appellate Tribunal’s decision to uphold the seizure was based on an erroneous understanding of the timeline and nature of the transactions, and therefore, the impugned Appellate Order should be set aside.
3. The Court has considered the aforenoted contentions but remains unpersuaded. The crux of the matter revolves around the sale deed dated 7th January 2021, which falls within the six-year period p
