2001 (12) TMI 817 - HC - Companies Law

Summary

Issues:
Challenge to show-cause notice under SAFEMA - Vagueness and non-specificity of notice - Honest and bona fide belief in illegally acquired properties - Previous notice and forfeiture - Prima facie case for forfeiture notice - Nexus with detenue's illegal activity - Legality of Tribunal's direction - Allegations of mala fide and lack of jurisdiction in issuing notice.

Analysis:
The judgment deals with three writ petitions challenging a show-cause notice issued under the Smugglers & Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA). The petitioners sought to challenge the notice directly under articles 226 and 227 of the Constitution without replying to it.

1. Vagueness and Non-specificity: The petitioners claimed the notice was vague, but since they were aware of the properties involved, this argument was deemed untenable.

2. Honest Belief in Illegally Acquired Properties: The petitioners questioned the belief in the properties being illegal, but they had the opportunity to satisfy the competent authority about this.

3. Previous Notice and Forfeiture: The petitioners argued that a previous notice was issued and properties were forfeited, but they could demonstrate to the authority if the notice was redundant.

4. Prima Facie Case for Forfeiture: The petitioners contended that there was no prima facie case for forfeiture, but it was suggested they address this with the competent authority.

5. Nexus with Detenue's Illegal Activity: The lack of nexus with the detenue's illegal activity was raised, but it was advised to present this argument before the competent authority.

6. Legality of Tribunal's Direction: The challenge to the Tribunal's direction was dismissed since the petitioners had relied on it.

7. Allegations of Mala Fide and Lack of Jurisdiction: The claim of mala fide and lack of jurisdiction was rejected due to insufficient details, and the petitioners were advised to respond to the notice.

In conclusion, the Court found the petitioners approached prematurely and should have responded to the show-cause notice. The writ petitions were dismissed as premature, with no costs imposed.