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Report No. 173

We are accordingly of the opinion that a new sub-clause (8) should be added in clause 3 to the following effect:

"(8) A person receiving or in possession of information which he knows or believes might be of material assistance -

(i) in preventing the commission by any other person of a terrorist act; or

(ii) in securing the apprehension, prosecution or conviction of any other person for an offence involving the commission, preparation or instigation of such an act, and fails, without reasonable cause, to disclose that information as soon as reasonably practicable to the police, shall be punished with imprisonment for a term which may extend to one year or fine or both."

Clauses 4: Clause 4 provides for punishment for disruptive activities. The clause occurring in Criminal Law Amendment Bill is proposed to be substituted in its entirety by the Official Amendments. We shall, therefore, deal with clause 4 as contained in the official amendments.

Sub-clause (1) of that clause says that "whoever questions, disrupts, whether directly or indirectly, the sovereignty or territorial integrity of India or supports any claim whether directly or indirectly for the cession of any other part of India or secession of any part of India from the Union, commits a disruptive act". The Explanation appended to sub-clause (1) defines the expressions "cession" and "secession". Paragraph (c) of the Explanation, however, excludes "trade union activity or other mass movement without the use of violence or questioning the sovereignty or territorial integrity of India or supporting any claim for cession of any part of India or secession of any part of India" from the purview of sub-clause (1).

Sub-clause (2) seeks to punish those who commit, conspire or attempt to commit or abet, advocate, advise or knowingly facilitate the commission of any disruptive act or any act preparatory thereto. Sub-clause (3) seeks to expand the scope of disruptive activity. According to this sub-clause, "any action taken whether by act or by speech or through any other media or in any other manner whatsoever, which (a) advocates, advises, suggests or incites or (b) predicts, prophesies or pronounces or otherwise expresses, in such manner as to incite, advise, suggest or prompt the killing or the destruction of any person bound by or under the Constitution to uphold the sovereignty and integrity of India or any public servant" amounts to disruptive activity.

Sub-clause (4) provides punishment for persons who knowingly harbour a disruptionist. A reading of clause 4 shows that it seeks to punish speech. Though sub-clause (3) uses the expression "act", it again appears to be confined to an act of speech. Shri K.G. Kannabiran, Shri H.D. Shourie and some others have suggested segregation of offences relating to disruptive activities from the provisions of the anti-terrorism legislation.

In our opinion, inclusion of mere offensive speech in this Bill is liable to be termed a case of over-reaction and a disproportionate response. We are not suggesting that such speech is either valid or that such speech should not be made punishable. All that we are suggesting is that such speech or its punishment should not find place in an anti-terrorism law. We, therefore, recommend that clause 4 be deleted altogether from the Bill or it may be redrafted so as to take in physical acts directed towards disturbing the integrity or sovereignty of India so as to take in acts other than those mentioned in clause 3. Mere offensive speech may be dealt with by another enactment - may be by amending the Indian Penal Code. This is a matter for the government to decide.

Clauses 5: We have no comments to offer with respect to clause 5.

Clauses 6 & 7: Clauses 6 and 7 of the Bill, as prepared by the Government, read together, provide for the following:

(a) If an officer investigating an offence under the Act has reasons to believe that "any property in relation to which an investigation is being conducted" is property derived from terrorist activity and includes proceeds of terrorism, he shall seize/attach that property after making an order in that regard so that such property is not transferred or otherwise dealt with except with his permission or with the permission of the special court. The officer seizing/attaching such property has to inform the special court of the said fact within 48 hours and it shall be open to the court to either confirm or revoke the order.

(b) It is equally open to the special court trying an offence under this Act to attach properties belonging to the accused and where such trial ends in conviction, the property shall stand forfeited to the government free from all encumbrances.

(c) Where a person is convicted under the Act, the special court may, in addition to awarding any punishment, direct forfeiture of the properties belonging to him.

(d) If the property forfeited represents shares in a company, the company shall forthwith register the government as the transferee of such shares.

The Law Commission had suggested in its Working Paper that in addition to the provisions contained in clauses 6 and 7, there should be a parallel procedure providing for forfeiture/confiscation of proceeds of terrorism. The expression "proceeds of terrorism" was defined to mean "all kinds of properties which have been derived or obtained from commission of any terrorist act or disruptive activity or has been acquired through funds traceable to terrorist act or disruptive activity".

It was also proposed in the Working Paper that there should be a specific section declaring the holding of proceeds of terrorism itself as illegal and providing for their confiscation. It was suggested that there should be provisions prescribing the procedure following which proceeds of terrorism can be seized/attached and forfeited to the government. It was clarified that for this purpose it is not necessary that the person holding such proceeds or owning such proceeds or in possession of such proceeds should have been prosecuted under the Act.

The object behind the provision has been to reach the properties of the terrorists, who, for some reason or other cannot be arrested or prosecuted including for the reason that they are safely ensconced abroad. Reference was made to the fact that certain persons are said to be directing, controlling and carrying on terrorist activities within India while stationed outside the country. It was pointed out that attaching and forfeiting the properties belonging to such persons, irrespective of the fact in whose name and in whose possession they were held, would be an effective way of fighting terrorism. It was suggested that such attachment could be made only by an officer not below the rank of Superintendent of Police and that he should inform the special court of such seizure/attachment within 48 hours.

It was further provided that it shall be open to the officer seizing/attaching the properties to either produce them before the court where the person owning such properties is prosecuted under the Act or to produce the same before the designated authority (who shall be distinct from a designated court). If the property seized/attached is produced before the designated authority, he shall issue a notice to the person in whose name it is standing or in whose possession they are found, to show cause as to why the said properties should not be declared to be the proceeds of terrorism and forfeited/confiscated in favour of the government.

It was further provided that in such a proceeding, the burden shall lie upon the person to whom a notice is issued to establish that the properties mentioned in the show cause notice do not represent the "proceeds of terrorism" or that they were earned by legitimate and lawful means. After making appropriate inquiry (which would naturally involve an inquiry into facts in case there is a dispute as to facts), the Designated Authority shall pass final orders either forfeiting such property in favour of the government or releasing it as the case may be. Detailed procedure on the lines of the procedure contained in SAFEMA (whose constitutionality has been upheld by a nine-judge Constitution Bench of the Supreme Court) was provided.

The only objection which has been put forward in the course of seminars to these provisions is that the power to forfeit the properties should not be vested in administrative authority like the Designated Authority but that it should vest in a court or a special court, as the case may be. Though it cannot be said that the said objection is totally without any substance, it is necessary to mention at the same time that even under SAFEMA, the power to forfeit is vested in an administrative officer and not in a court.

More important - though the Designated Authority may be an administrative officer, once he is designated as a Designated Authority, he becomes a tribunal for all purposes and would be obliged to observe the principles of natural justice while making the inquiry and while passing the final orders. In fact, an appeal is provided from the orders of the Designated Authority to the High Court directly. In such a situation, there can be no room for any valid apprehension that the proceedings under this parallel procedure would result in miscarriage of justice. Accordingly, we reiterate our proposals and recommend that provisions and modifications suggested in para 5.13.3 should be incorporated in the Bill. They read as follows:

"6. Holding of proceeds of terrorism illegal:(1) No person shall hold or be in possession of any proceeds of terrorism.

(2) Proceeds of terrorism, whether they are held by a terrorist or by any other person and whether or not such person is prosecuted or convicted under this Act shall be liable to be forfeited to the Central Government in the manner hereinafter provided.

6A. Powers of investigating officers: (1) If an officer (not below the rank of Superintendent of Police) investigating an offence committed under this Act has reason to believe that any property in relation to which an investigation is being conducted is a property derived or obtained from the commission of any terrorist act or represents proceeds of terrorism, he shall, with the prior approval in writing of the Director General of the Police of the State in which such property is situated, make an order seizing such property and where it is not practicable to seize such property, make an order of attachment directing that such property shall not be transferred or otherwise dealt with except with the prior permission of the officer making such order, or of the Designated Authority, or the Special Court, as the case may be, before whom the properties seized or attached are produced. A copy of such order shall be served on the person concerned.

(2) The investigating officer shall duly inform the Designated Authority or, as the case may be, the Special Court, within forty-eight hours of the attachment of such property.

(3) It shall be open to the Designated Authority or the Special Court before whom the seized or attached properties are produced either to confirm or revoke the order of attachment so issued.

(4) In the case of immovable property attached by the investigating officer, it shall be deemed to have been produced before the Designated Authority or the Special Court, as the case may be, when the Investigating Officer so notifies in his report and places it at the disposal of the Designated Authority or the Special Court, as the case may be.

6B Forfeiture of proceeds of terrorism: Where any property is seized or attached in the belief that it constitutes proceeds of terrorism and is produced before the Designated Authority, it shall, on being satisfied that the said property constitutes proceeds of terrorism, order forfeiture of such property, whether or not the person from whose possession it is seized or attached, is prosecuted in a Special Court for an offence under this Act.

6C Issue of show-cause notice before forfeiture of proceeds of terrorism:

(1) No order forfeiting any proceeds of terrorism shall be made under section 6B, unless the person holding or in possession of such proceeds is given a notice in writing informing him of the grounds on which it is proposed to forfeit the proceeds of terrorism and such person is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of forfeiture and is also given a reasonable opportunity of being heard in the matter.

(2) No order of forfeiture shall be made under sub-section (1), if such person establishes that he is a bona fide transferee of such proceeds for value without knowing that they represent proceeds of terrorism.

(3) It shall be competent to the Designated Authority to make an order, in respect of property seized or attached, (a) in the case of a perishable property directing it to be sold: and the provisions of section 459 of the Code shall, as nearly as may be practicable, apply to the net proceeds of such sale; (b) in the case of other property, nominating any officer of the Central Government to perform the function of the Administrator of such property subject to such conditions as may be specified by the Designated Authority.

6D Appeal: (1) Any person aggrieved by an order of forfeiture under section 6B may, within one month from the date of the communication to him of such order, appeal to the High Court within whose jurisdiction the Designated Authority, who passed the order to be appealed against, is situated.

(2) Where an order under section 6B is modified or annulled by the High Court or where in a prosecution instituted for the violation of the provisions of this Act, the person against whom an order of forfeiture has been made under section 6B, is acquitted and in either case it is not possible for any reason to return the proceeds of terrorism forfeited, such person shall be paid the price therefor as if the proceeds of terrorism had been sold to the Central Government with reasonable interest calculated from the day of seizure of the proceeds of terrorism and such price shall be determined in the manner prescribed.

6E Order of forfeiture not to interfere with other punishments: The order of forfeiture made under this Act by the Designated Authority, shall not prevent the infliction of any other punishment to which the person affected thereby is liable under this Act.

6F Claims by third parties: (1) Where any claim is preferred, or any objection is made to the forfeiture of any property under section 6C on the ground that such property is not liable to such forfeiture, the Designated Authority or the Special Court, as the case may be, before whom such property is produced, shall proceed to investigate the claim or objection.

Provided that no such investigation shall be made where the Designated Authority or the Special Court considers that the claim or objection was designed to cause unnecessary delay.

(2) In case claimant or objector establishes that the property specified in the notice issued under section 6C is not liable to be attached or confiscated under the Act, the notice under section 6C shall be withdrawn or modified accordingly.

6G Powers of the Designated Authority: The Designated Authority, acting under the provisions of this Act, shall have all the powers of a Civil Court required for making a full and fair enquiry into the matter before it.

6H Obligation to furnish information: (1) Notwithstanding anything contained in any other law, the officer investigating any offence under this Act, shall have power to require any officer or authority of the Central Government or a State Government or a local authority or a Bank, a company, a firm or any other institution, establishment, organisation or any individual to furnish information in their possession in relation to such persons, on points or matters as in the opinion of such officer, will be useful for, or relevant to, the purposes of this Act.

(2) Failure to furnish the information called for under sub-section (1), or furnishing false information shall be punishable with imprisonment for a term which may extend to three years or a fine or with both.

(3) Notwithstanding anything contained in the Code, the offence under sub-section (1) shall be tried as a summary case and the procedure prescribed in Chapter XXI of the said Code [except sub-section (2) of section 262] shall be applicable thereto.

(4) Any officer in possession of any information may furnish the same suo motu to the officer investigating an offence under this Act, if in the opinion of such officer such information will be useful to the investigating officer for the purposes of this Act.

6I. Certain transfers to be null and void: Where after the issue of an order under section 6A or issue of a notice under section 6B(1), any property referred to in the said notice is transferred by any mode whatsoever, such transfer shall, for the purpose of the proceedings under this Act, be ignored and if such property is subsequently confiscated, the transfer of such property shall be deemed to be null and void."

The above provisions suggested by the Law Commission are consistent with sub-clause (6) of clause 3; indeed these suggested provisions advance the objective underlying the said sub-clause.



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