2001 (1) TMI 920 - AT - FEMA

Summary

Issues Involved:
1. Legality of the forfeiture of two properties under SAFEMA.
2. Validity of the appellant's claim regarding the source of funds for acquiring the properties.
3. Admissibility and authenticity of additional evidence provided by the appellant.
4. Burden of proof under section 8 of SAFEMA.
5. Relevance of the appellant's husband's criminal conviction to the forfeiture proceedings.

Detailed Analysis:

1. Legality of the Forfeiture of Two Properties under SAFEMA:
The appeal challenges the order of the Competent Authority, which directed the forfeiture of two properties-a land in Elamkulam village and a residential building in Cochin-under section 7(1) of the SAFEMA, deeming them illegally acquired. The appellant contested this order, claiming legal acquisition through her husband's earnings abroad and loans.

2. Validity of the Appellant's Claim Regarding the Source of Funds for Acquiring the Properties:
The appellant argued that her husband, employed abroad, transferred funds through an NRE account, which were used to acquire the house property in 1983 for Rs. 2.5 lakhs, and the land in 1985 for Rs. 28,000, supported by a loan from LIC. The Competent Authority initially rejected these claims due to insufficient evidence, but later findings partially accepted the appellant's explanations for the land acquisition, citing the LIC loan as legitimate.

3. Admissibility and Authenticity of Additional Evidence Provided by the Appellant:
The appellant submitted additional evidence, including certificates from Bank Melli, Iran, and other documents, to prove her husband's employment and foreign remittances. The Competent Authority, upon review, acknowledged the husband's employment abroad but questioned the authenticity of the documents, as they lacked proper authentication under section 3 of the Diplomatic and Consular Officers (Oaths and Fees) Act, 1948. The Tribunal found these documents unreliable and rejected them as fabricated, noting inconsistencies with earlier claims.

4. Burden of Proof under Section 8 of SAFEMA:
The burden lay on the appellant to prove that the properties were acquired through legal means. The Tribunal held that the appellant failed to provide sufficient evidence to substantiate the legal acquisition of the house property, particularly regarding the foreign remittances and gold loans. The Tribunal emphasized that unauthenticated documents and inconsistent claims did not meet the required standard of proof.

5. Relevance of the Appellant's Husband's Criminal Conviction to the Forfeiture Proceedings:
The Tribunal referenced the criminal conviction of the appellant's husband for gold smuggling, which reinforced the suspicion of illegal acquisition of the properties. The conviction, confirmed by the High Court of Madras, involved the concealment of gold bars, casting doubt on the legitimacy of the funds used for property acquisition.

Conclusion:
The Tribunal allowed the appeal in part, setting aside the forfeiture of the land in Elamkulam village, recognizing the LIC loan as a legitimate source of funds. However, it confirmed the forfeiture of the residential house in Cochin, as the appellant failed to prove the legal acquisition of the property. The appeal was dismissed regarding the house property, upholding the Competent Authority's order.