1999 (4) TMI 579 - AT - FEMA

Summary

Issues:
- Appeal against order of Competent Authority under SAFEMA
- Claim of being a bona fide purchaser for value without notice
- Validity of sale transactions in favor of appellant and predecessors
- Interpretation of section 11 of SAFEMA and its implications
- Applicability of section 41 of Transfer of Property Act
- Overriding effect of SAFEMA over general laws

Analysis:
The appeal in question challenges the order of the Competent Authority under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA). The appellant, claiming to be a bona fide purchaser for value without notice, contests the forfeiture of a flat purchased from a previous owner. The Competent Authority argues that the appeal is time-barred and the sale transactions are void under section 11 of SAFEMA.

The crucial issue revolves around the interpretation of section 11 of SAFEMA, which declares any property transfer after a notice is issued to be null and void if the property is subsequently forfeited to the Central Government. The Tribunal notes that the sale to the appellant occurred long after the property was forfeited, rendering it invalid. The Tribunal emphasizes that the provisions of SAFEMA, specifically section 11, override general laws such as the Transfer of Property Act.

Regarding the appellant's reliance on section 41 of the Transfer of Property Act for protection as a bona fide purchaser, the Tribunal rejects this argument. It clarifies that SAFEMA's special provisions, including section 11, take precedence over general laws. The Tribunal emphasizes that section 41 of the Transfer of Property Act does not apply in this case due to the clear mandate of section 11 of SAFEMA.

Ultimately, the Tribunal dismisses the appeal, ruling that the sale to the appellant and predecessors is null and void under SAFEMA. The Tribunal underscores the overriding effect of SAFEMA over general laws, highlighting the specific provisions that govern property forfeiture and transfers in such cases. Consequently, the stay petition is also rejected, affirming the forfeiture of the property in question.