1995 (2) TMI 358 - AT - FEMA

Summary

Issues Involved:

1. Validity of the detention order and its revocation.
2. Legitimacy of the Competent Authority's jurisdiction under SAFEMA.
3. Legitimacy of the forfeited properties.
4. Alleged procedural lapses by the Competent Authority.
5. Principles of promissory estoppel.

Issue-wise Detailed Analysis:

1. Validity of the Detention Order and its Revocation:

The detention order against Shri Thanesar Singh Sodhi was passed on January 2, 1978, under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA), and was revoked on November 9, 1978. The appellant's advocate argued that the revocation should be treated as if the Supreme Court had quashed the detention order. However, the Tribunal held that the Supreme Court had dismissed the writ petitions as withdrawn, and thus, the detention order remained valid. The revocation by the Under Secretary (Home) did not interfere with the Competent Authority's jurisdiction to pass an order under section 7 of SAFEMA.

2. Legitimacy of the Competent Authority's Jurisdiction under SAFEMA:

The Competent Authority's jurisdiction was challenged on the grounds that the revocation of the detention order should nullify the proceedings under SAFEMA. However, the Tribunal clarified that the withdrawal of writ petitions by the appellant and his father meant they lost the potential advantage of the Supreme Court setting aside the detention orders. The Competent Authority's jurisdiction to pass the order under section 7 of SAFEMA was upheld.

3. Legitimacy of the Forfeited Properties:

The properties sought to be forfeited included:
- Business in the name of Messrs. Apsara Hotel, Arya Samaj Road, Karol Bagh, New Delhi.
- House property No. 2/32-A, Punjabi Bagh, New Delhi.
- Balance in Account No. 5820 with New Bank of India, Karol Bagh, New Delhi.

The Tribunal examined the sources of investment and income claimed by Shri Thanesar Singh Sodhi. The Competent Authority found that the investments were from undisclosed sources and linked to smuggling activities. The Tribunal upheld the Competent Authority's findings that the investments in the properties were from illegal activities, and thus, the properties were rightly forfeited.

4. Alleged Procedural Lapses by the Competent Authority:

The appellant claimed that the Competent Authority had taken into consideration evidence without confronting him and had not provided a reasonable opportunity of being heard. The Tribunal found these claims to be unsubstantiated. The appellant had been provided with numerous opportunities to present his case, and the Competent Authority had followed a just, reasonable, and fair procedure.

5. Principles of Promissory Estoppel:

The appellant argued that the principle of promissory estoppel should apply, citing judgments in Union of India v. Anglo Afghan Agencies and Century Spinning and Mfg. Co. Ltd. v. Ulhasnagar Municipal Council. The Tribunal rejected this argument, stating that the only undertaking given was regarding the revocation of the detention order, not the abandonment of proceedings under SAFEMA. There was no representation by the Government that proceedings under SAFEMA would be dropped.

Separate Judgment by Mrs. S. Duggal J. (Chairman):

Mrs. S. Duggal J. agreed with the judgment proposed by the learned Member and supplemented it by addressing additional points raised by the appellant's counsel. She emphasized that the revocation of detention orders under section 11(1) of COFEPOSA did not fall within the exceptions that would nullify the jurisdiction of the Competent Authority under SAFEMA. She also highlighted the appellant's false claims about his association with his father, which were contradicted by the evidence on record.

Conclusion:

The appeal was dismissed, and the Competent Authority's order to forfeit the properties was upheld. The Tribunal found no merit in the appellant's claims regarding the validity of the detention order, procedural lapses, or the application of promissory estoppel. The forfeited properties were deemed to have been acquired from illegal activities.