Report No. 166
1.9. Some Salient Features of the Proposed Bill.-
The Law Commission of India has kept the aforementioned facts and law while drafting the accompanying Bill (Annexure A). With a view to enable the Competent Authority under the Act to obtain information with respect to the illegally acquired properties and assets of corrupt public servants (which expression includes Ministers and Members of Parliament, both incumbent and former) whether located in India or stashed abroad, the very holding of or possession of illegally acquired properties is made an offence. Declaring such holding or possession illegal and a punishable offence warrants their forfeiture and taking of steps to identify and seize them even when they are kept in numbered accounts or under pseuodonyms.
Power is given to the Competent Authority to call upon any public servant believed to be in possession of illegally acquired properties, whether within India or abroad, to disclose by way of an affidavit the particulars of the assets held/possessed by him, his relatives and associates. Power is also given to the Competent Authority to call upon any person including authority, officer, Bank, or other organisation to disclose information with respect to a person to whom this Act applies and such person is made bound to furnish such information. Refusal to furnish information or furnishing false information is made punishable.
Certain relevant powers of the Civil Court are also vested in the Competent Authority to enable him to function effectively. For the same purpose it is also clothed with the power to attach properties pending the proceedings under the Act, to order any enquiry, investigation, search and seizure through such authorities as he may find appropriate and also to call upon any authority to render such assistance as may it be called upon to render. In short, all provisions necessary for an effective and unhindered functioning of the Competent Authority have been provided for.
The accompanying Bill also bars the court from granting any Injunction against the Competent Authority. It is true that such a provision can not bar the High Court from interfering under Article 226 of the Constitution of India - or, for that matter, the Supreme Court under Articles 32 or 136 - but as held by a nine-Judge Constitution Bench of the Supreme Court in Mafatlal Industries Ltd. v. Union of India, 1997 (5) SCC 536, dealing with a similar provision in the Central Excise Act:
"By virtue of sub-section (3) to section 11B of the Central Excises and Salt Act, as amended by the aforesaid Amendment Act, and by virtue of the Provisions contained in sub-section (3) of section 27 of the Customs Act, 1962, as amended by the said Amendment Act, all claims for refund (excepting those which arise as a result of declaration of unconstitutionality of a provision whereunder the levy was created) have to be preferred and adjudicated only under the provisions of the respective enactments. No suit for refund of duty is maintainable in that behalf. So far as the jurisdiction of the High Courts under Article 226 of the Constitution - or of this Court under Article 32 - is concerned, it remains - unaffected by the provisions of the Act.
Even so, the Court would, while exercising the jurisdiction under the said articles, have due regard to the legislative intent manifested by the provisions of the Act. The writ petition would naturally be considered and disposed of in the light of and in accordance with the provisions of section 11B. This is for the reason that the power under Article 226 has to be exercised to effectuate the regime of law and not for abrogating it. Even while acting in exercise of the said constitutional power, the High Court cannot ignore the law nor can it override it. The power under Article 226 is conceived to serve the ends of law and not to transgress them."
1.9.1. So far as the definition of "relatives" and "associates" is concerned, they have been bodily lifted from SAFEMA. Even the definition of "illegally acquired property" is substantially based upon the definition in the said Act. Indeed, the very Bill accompanying this Report is patterned on SAFEMA. This has been done advisedly for the reason that the constitutional validity of SAFEMA has already been tested and affirmed by a larger Constitution Bench of Nine learned Judges of the Supreme Court of India in Attorney General of India v. Amritlal Prajivandas, referred to supra. The idea has been to avoid time-consuming litigation in courts on the question of constitutionality of the measure.