Smt. Kesar
Devi Vs. Union of India & Ors [2003] Insc 334
(31 July 2003)
S. Rajendra
Babu & G. P. Mathur. G.P. Mathur, J.
1.
This appeal has been preferred by special leave against the judgment and order
dated 12.1.1996 of a Division Bench of Rajasthan High Court by which the
special appeal preferred by the appellant against the judgment and order dated
19.7.1995 of a learned Single Judge was dismissed and the order passed by the
Appellate Tribunal for Forfeited Property, New Delhi, was affirmed.
2. The
appellant is widow of late Jagannath Sharma. The Customs and Central Excise
Authorities of Jaipur recovered 5 gold bars from Jagannath Sharma on 24.7.1969.
On 8.4.1972 Police Authorities recovered 15 gold bars from Radha Ballabh and on
15.11.1972 two gold bars of foreign origin were recovered from Ram Parekh and
both of them gave statements that they had bought the same from Jagannath
Sharma. On 11.10.1973 police recovered 38 gold bars from one Ram Prasad Sharma
and the documents showed that the same belonged to Jagannath Sharma. Jagannath
Sharma was then detained under MISA on 8.10.1974, but the detention order was
revoked and he was released in November, 1974. Thereafter, he was again
detained on 4.8.1975 under COFEPOSA Act by an order passed by the Deputy Secretary
to the Home Department, Government of Rajasthan, Jaipur. The detention order
was passed on the ground that the State Government was satisfied that with a
view to prevent Jagannath Sharma from dealing in smuggled goods and engaging in
transporting or concealing or keeping smuggled goods, it was necessary to make
an order under Section 3(1) of the COFEPOSA Act to detain him.
3.
Proceedings for forfeiture of three properties, namely,
(1)
House property No. D-48, Bapu Nagar, Jaipur;
(2)
House property known as Haldia House, Johari Bazar, Jaipur (Municipal
No.JD-JMC-1/106/1948); and
(3)
House Property in Mehandi Ka Chowk, Ramganj Bazar, Jaipur (Municipal
No.GD-JMC-1/276/1948) were initiated under the Smugglers and Foreign Exchange
Manipulators (Forfeiture of Property) Act, 1976 (for short "SAFEMA").
A
notice under Section 6(1) of SAFEMA (hereinafter referred to as "the
Act") was issued to the appellant Smt. Kesar Devi with regard to Bapu Nagar
property and a similar notice was issued to the appellant's husband Jagannath
Sharma with regard to the other two properties, namely, Haldia House and Mehandi
Ka Chowk. Jagannath Sharma gave a reply that the aforesaid two properties did
not belong to him but belonged to his wife. Thereafter, the competent authority
issued a letter dated 27.4.1977 purporting to be a notice under Section 6(2) of
the Act to the appellant. In this letter apart from enclosing a copy of the
notice under Section 6(1) issued to Jagannath Sharma as required by clause (2)
of Section 6, the competent authority called upon the appellant "to
produce evidence if she was the real owner of the aforesaid property, and if
so, to indicate the source of her income, earnings or assets out of which or by
means of which she had acquired the properties." In her reply dated
5.5.1977, the appellant asserted that she was the absolute and exclusive owner
of all the three properties and the same had been purchased out of her own
individual income and they had nothing to do with her husband Jagannath Sharma.
The
competent authority, after considering the material on record passed an order
under Section 7(1) of the Act on 28.7.1977 against the appellant forfeiting Bapu
Nagar property. A separate order was passed against Jagannath Sharma on the
same date forfeiting the other two properties. The orders were passed on the
finding that though the ostensible owner of the properties was Smt. Kesar Devi
but the real owner was her husband Jagannath Sharma. In appeal, the appellate
Tribunal vide its order dated 26.10.1977 set aside the order and remanded the
matter to the competent authority to enable the appellant and her husband to
cross-examine the witnesses and also to produce such witnesses in support of
their case, as they may desire. Thereafter, the competent authority, after
affording an opportunity of hearing and leading evidence, passed a fresh order,
forfeiting all the three properties, namely, properties at Bapu Nagar, Haldia
House and Mehandi Ka Chowk.
4.
Feeling aggrieved by the said order, the appellant preferred an appeal before
the appellate Tribunal. The appellate Tribunal held that in the notice issued
to the appellant under Section 6(1) of the Act, two properties, namely, Haldia
House and Mehandi Ka Chowk were not included. The Tribunal did not accept the
contention of the representative of the Department that the letter dated
27.4.1977 forwarding to the appellant a copy of the notice under Section 6(1)
issued to her husband Jagannath Sharma, was not only a notice under Section
6(2) to her but also a notice under Section 6(1) in respect of these two
properties. After consideration of the evidence adduced by the parties, the
Tribunal agreed with the finding of the competent authority that there was no
evidence to support the assertion that the appellant was carrying on any
business and that any savings were thus available to her for making investment
in the properties acquired. Accordingly, the appeal was allowed qua
(1) Haldia
House property and
(2) Mehandi
Ka Chowk properties and the order of forfeiture passed regarding the aforesaid
properties was set aside. The appeal was, however, dismissed with regard to
house property No.D-48, Bapu Nagar, Jaipur and its forfeiture as directed by
the competent authority was upheld.
5. The
appellant then preferred a writ petition before the Jaipur Bench of Rajasthan
High Court challenging the orders of the competent authority and of the
appellate authority. During the course of hearing of the writ petition, three
main contentions assailing the detention of Jagannath Sharma were raised,
namely,
(1) when
challenge is made regarding forfeiture of the property under SAFEMA, the Court
is competent to examine the orders passed under COFEPOSA Act;
(2)
the order passed by the State Government for detaining the appellant's husband
under COFEPOSA Act was bad in law; and
(3) the
grounds of detention under COFEPOSA Act were not communicated. It was also
urged that reasons for belief had not been recorded as provided under Section
6(1) of the Act. The finding of the authorities that the appellant had failed
to establish that she had purchased the property from her own income, was also
assailed. The learned Single Judge did not accept the contentions raised on
behalf of the appellant and after a detailed consideration of the same dismissed
the writ petition. The special appeal preferred by the appellant was dismissed
summarily by the Division Bench of the High Court.
6. In
support of the contention that it is open to a person to assail the validity of
a detention order passed under COFEPOSA Act while challenging the proceedings
initiated under SAFEMA regarding forfeiture of property, the appellant before
the High Court had placed reliance on Union has been expressly overruled by a
Bench of nine Judges in Attorney General for India v. Amratlal Prajivandas
(1994) 5 SCC 54, wherein it has been held as under:
"Thus
the conclusion is that an order of detention to which Section 12-A is
applicable as well as an order of detention to which Section 12-A was not
applicable can serve as the foundation, as the basis, for applying SAFEMA to
such detenu and to his relatives and associates provided such order of
detention does not attract any of the sub-clauses in the proviso to Section 2(2)(b).
If such detenu did not choose to question the said detention (either by himself
or through his next friend) before the Court during the period when such order
of detention was in force, - or is unsuccessful in his attack thereon – he, or
his relatives and associates cannot attack or question its validity when it is
made the basis for applying SAFEMA to him or to his relatives or
associates." In view of this authoritative pronouncement by this Court,
the main grounds of challenge raised before the High Court have no legs to
stand.
7. The
competent authority as also the appellate authority considered the evidence
adduced by the appellant and came to the conclusion that there was no evidence
to support the appellant's claim that she was carrying on any business and that
any savings were thus available to her for making investment in the acquired
property. The finding is based upon a thorough and proper appraisal and
consideration of the evidence on record and we find no reason to differ from
the same. In the special leave petition, the grounds taken relate to the
validity of the detention order passed under COFEPOSA Act against Jagannath
Sharma and also to the correctness of the finding recorded by the authorities
that the appellant did not have any individual income of her own to purchase
the properties. These grounds, in our opinion, have no substance for the
reasons indicated above and they were rightly not very seriously pressed by the
learned counsel before us.
8. An
application was moved by the appellant on 24.3.2003 for producing additional
documents and for urging additional grounds.
Learned
counsel has submitted that the notice issued under Section 6(1) of SAFEMA does
not show as to how any link or nexus is established between the properties
sought to be forfeited and the alleged illegally acquired money of the detenu Jagannath
Sharma. It has been urged that unless the notice itself showed the link or
nexus between the illegally acquired money of the detenu and the property
sought to be forfeited, no order for forfeiture under Section 7 could be
passed. In support of his submission, learned counsel has placed reliance on a
decision of this Court in Civil Appeal No.7400- 7401 of 1996 (Smt. Fatima Mohd.
Amin (dead) through LR v. Union of India & Anr.) decided on 16.1.2003.
9.
Section 2(1) of SAFEMA lays down that the provisions of the said Act shall
apply only to the persons specified in Sub-section (2) of that Section.
Sub-section (2) of Section 2 gives a long list of different categories of
persons to whom the Act shall apply and they include those who have been
convicted under the Customs Act, 1962; Sea Customs Act, 1878;
Foreign
Exchange Regulation Act, 1947 or 1973, where the value of goods or the amount
involved exceeds Rs.1 lakh or have been convicted subsequently under the
aforesaid Acts. Clause (b) of this Sub-section includes a person against whom
an order of detention has been made under COFEPOSA Act and is not covered by
the proviso to this clause. Clause (c) to Sub-section (2) includes every person
who is a relative of the person referred to in clause (a) or clause (b).
Explanation (2) gives a long list of relatives for the purpose of clause (c)
and in view of clause (i) thereof, Kesar Devi being the spouse of Jagannath
Sharma is clearly covered by the provisions of the Act. Section 6 of the Act lays
down that if, having regard to the value of the properties held by any person
to whom the Act applies, either by himself or through any other person on his
behalf, his known source of income, earnings or assets, and any other
information or material available to it as a result of action taken under
Section 18 or otherwise, the competent authority has reason to believe (the
reasons for such belief to be recorded in writing) that all or any of such
properties are illegally acquired properties, it may serve a notice upon such
person calling upon him to indicate the sources of his income, earnings or
assets, out of which or by means of which, he has acquired such property and to
show cause why all or any of such properties, as the case may be, should not be
declared to be illegally acquired properties and forfeited to the Central
Government. The condition precedent for issuing a notice by the competent
authority under Section 6(1) is that he should have reason to believe that all
or any of such properties are illegally acquired properties and the reasons for
such belief have to be recorded in writing. The language of the Section does
not show that there is any requirement of mentioning any link or nexus between
the convict or detenu and the property ostensibly standing in the name of the
person to whom the notice has been issued. Section 8 of the Act which deals
with burden of proof is very important. It lays down that in any proceedings
under the Act, the burden of proving that any property specified in the notice
served under Section 6 is not illegally acquired property, shall be on the
person affected. The combined effect of Section 6(1) and Section 8 is that the
competent authority should have reason to believe (which reasons have to be
recorded in writing) that properties ostensibly standing in the name of a
person to whom the Act applies are illegally acquired properties, he can issue
a notice to such a person. Thereafter, the burden of proving that such property
is not illegally acquired property will be upon the person to whom notice has
been issued. The statutory provisions do not show that the competent authority,
in addition to recording reasons for his belief, has to further mention any
nexus or link between the convict or detenu (as described in Sub-section (2) of
Section 2) and the property which is sought to be forfeited in the sense that
money or consideration for the same was provided by such convict or detenu. If
a further requirement regarding establishing any link or nexus is imposed upon
the competent authority, the provisions of Section 8 regarding burden of proof
will become otiose and the very purpose of enacting such a Section would be
defeated.
10.
The requirement of establishing a "link or nexus" between the
illegally acquired money of the convict or detenu as described in Sub-section
(2) of Section 2 of the Act and the properties sought to be forfeited is sought
to be derived from certain observations made by this Court in Attorney General
for India v. Amratlal Prajivandas (supra) in paragraph 44 of the Reports. If
paragraph 44 is read as a whole, it will be clear that no such requirement of
establishing any link or nexus on the part of the competent authority has been
laid down therein. In the said paragraph, the Bench dealt with contention of
the counsel for the petitioners that extending the provisions of SAFEMA to the
relatives, associates and other "holders" is again a case of
overreaching or of over-breadth, as it may be called – a case of excessive
regulation. The relevant part of para 44 (page 92 of the Reprots) is being
reproduced below :
"…….
The language of this section is indicative of the ambit of the Act. Clauses (c)
and (d) in Section 2(2) and the Explanations (2) and (3) occurring therein
shall have to be construed and understood in the light of the overall scheme
and purpose of the enactment. The idea is to forfeit the illegally acquired
properties of the convict/detenu irrespective of the fact that such properties
are held by or kept in the name of or screened in the name of any relative or
associate as defined in the said two Explanations. The idea is not to forfeit
the independent properties of such relatives or associates which they may have
acquired illegally but only to reach the properties of the convict/detenu or
properties traceable to him, wherever they are, ignoring all the transactions
with respect to those properties. By way of illustration, take a case where a
convict/detenu purchases a property in the name of his relative or associate –
it does not matter whether he intends that such a person to be a mere name
lender or whether he really intends that such person shall be the real owner
and/or possessor thereof – or gifts away or otherwise transfers his properties
in favour of any of his relatives or associates, or purports to sell them to
any of his relatives or associates – in all such cases, all the said
transactions will be ignored and the properties forfeited, unless the convict/detenu
or his relative/associate, as the case may be, establishes that such property
or properties are not "illegally acquired properties" within the
meaning of Section 3(c). ………………………………………………… ….…………… It is equally necessary to
reiterate that the burden of establishing that the properties mentioned in the
show-cause notice issued under Section 6, and which are held on that date by a
relative or an associate of the convict/detenu, are not the illegally acquired
properties of the convict/detenu, lies upon such relative/associate. He must
establish that the said property has not been acquired with the monies or
assets provided by the detenu/convict or that they in fact did not or do not
belong to such detenu/convict. We do not think that Parliament ever intended to
say that the properties of all the relatives and associates, may be illegally
acquired, will be forfeited just because they happen to be the relatives or
associates of the convict/detenu. There ought to be the connecting link between
those properties and the convict/detenu, the burden of disproving which, as
mentioned above, is upon the relative/associate. ………….."
11.
The judgment of a Court has not to be interpreted like a Statute where every
word, as far as possible, has to be given a literal meaning and no word is to
be ignored. The observations made have to be understood in the context of the
facts and contentions raised. As mentioned earlier, Explanation (2) appended to
Clause (c) of Sub-section (2) of Section 2 gives a very long list of relations.
The combined effect of clauses (iii) and (vii) of the Explanation is that a convict
or detenu's wife's sister's lineal descendant whether male or female and
howsoever low is also included even though the relationship is quite remote. In
those cases where the relationship is very remote one, the competent authority
may have to indicate some link or nexus while recording reasons for belief that
the property is illegally acquired property. But cases where relationship is
close and direct like spouse, son or daughter or parents stand on altogether
different footing. Here no link or nexus has to be indicated in the reasons for
belief between the convict or detenu and the property as such an inference can
easily be drawn.
12. We
are, therefore, clearly of the opinion that under the Scheme of the Act, there
is no requirement on the part of the competent authority to mention or
establish any nexus or link between the money of the convict or detenu and the
property sought to be forfeited. In fact, if such a condition is imposed, the
very purpose of enacting SAFEMA would be frustrated, as in many cases it would
be almost impossible to show that the property was purchased or acquired from
the money provided by the convict or detenu.
In the
present case, the appellant is the wife of the detenu and she has failed to
establish that she had any income of her own to acquire the three properties.
In such circumstances, no other inference was possible except that it was done
so with the money provided by her husband.
13. In
order to examine whether the notice issued by the competent authority satisfies
the requirement of Section 6, it is necessary to reproduce the same and the
same reads as under :
"1.
Kesar Devi alias Kani Devi, of DG-JMC-1/169/1948, Bakshiji-Ki-Gali, Mehandi Ka Chowk,
Ramganj Bazar, Jaipur is the wife of Jagan Nath Sharma in respect of whom an
order of detention under the Conservation of Foreign Exchange and Prevention of
Smuggling Activities Act, 1974 was made on 4.8.1975. She is, therefore, a
person covered by Sec. 2(2)(c) of the Smugglers and Foreign Exchange
Manipulators (Forfeiture of Property) Act, 1976 (hereinafter referred to as the
SAFEMA).
2. The
Commissioner of Income-tax, Jaipur has, vide his D.O. No.ADI/JPR/COFEPOSA/350
dated 1.9.1976, furnished information under Sec. 16(2) of the SAFEMA regarding
the illegally acquired properties of Kesar Devi.
3. Kesar
Devi has never been assessed to tax nor has she ever filed her return of
income. Kesar Devi is the holder of house property D-48, Bapu Nagar, Jaipur. Kesar
Devi, in her statement on 22.7.1976 before Sh. S.P. Gupta, Inspector, Jaipur
has stated that she purchased the plot of land D-48, Bapu Nagar, about 13 years
back and immediately thereafter constructed a house on this plot. She admitted
that she did not remember the price paid for the purchase of the above plot but
stated that the house, including the plot, cost her about Rs.30,000. She
further stated that she received money from her mother-in-law and father-in-law
for the construction of the house, besides the sale proceeds of her ornaments.
She also asserted that she used to earn income from stitching of gota on sarees
and that this income was available to her. When specifically questioned about
evidence in respect of the assertions made by her regarding the source of
investment in the plot or the construction of the house, she in no unequivocal
terms, admitted that she had no evidence. Kesar Devi is reported to have had no
known sources of income. The source of investment in the house, therefore,
remains unproved. The house property thus constitutes property which has, wholly
or partly, come out of or by means of any income, earnings or assets, the
source of which cannot be proved and which cannot be shown to be attributable
to any act or thing done in respect of any matter in relation to which
Parliament has no power to make laws and accordingly is a property within the
meaning of Sec. 3(1)(c)(iii) of the SAFEMA.
4. I
have, therefore, reason to believe that the property mentioned below held by Kesar
Devi is illegally acquired property within the meaning of Sec. 3(1)(c) of the
SAFEMA in respect of which a notice under Section 6(1) of the Smugglers and
Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 should be
served on her to indicate the sources of her income, earnings or assets, out of
which or by means of which she acquired this property, the evidence on which
she relies and other relevant information and particulars and to show cause why
this property should not be declared to be illegally acquired property and
forfeited to the Central Government." The notice clearly records the
reasons for belief and, therefore, it fully complies with the requirement of
law and there is no infirmity in the same.
14.
The judgment in Civil Appeal No.7400-7401 of 1996 relied upon by the learned
counsel for the appellant can be of no assistance to him. On facts, the Court
found that the notice issued by the competent authority did not disclose any
reasons and thus the same did not meet the requirement of Sub-section (1) of
Section 6 of the Act. As shown above, this is not the case here as the reasons
for belief have been clearly recorded by the competent authority.
We,
therefore, find no merit in the appeal and the same is hereby dismissed.
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