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Issues:
1. Interpretation of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. 2. Validity of forfeiture of properties under the Act. 3. Rights of a mortgagee in forfeited properties. Detailed Analysis: 1. The case involved the interpretation of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. The appellant, the wife of a person detained under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, was issued a notice under section 6(1) of the Act regarding various properties. The Competent Authority proceeded ex parte against her after finding her explanations unsatisfactory and eventually forfeited the properties. The appellant did not adduce any evidence despite multiple notices issued from 1981 to 1990. The Competent Authority's decision was challenged through an appeal. 2. The appellant's properties were alleged to be illegally acquired and subject to forfeiture under the Act. However, the appellant argued that the properties were purchased by her and mortgaged with a bank in good faith and for adequate consideration. The bank had filed civil suits for recovery of the mortgage amount, which were pending. The appellant contended that the bank's mortgage interest in the properties could not be considered illegally acquired property under the Act. The Tribunal agreed with the appellant's argument and held that the mortgage interest of the bank in the properties was not subject to forfeiture. 3. The Tribunal analyzed the provisions of the Act regarding illegally acquired property and concluded that the mortgage in favor of the bank, which came into existence in 1974, was bona fide and for adequate consideration. The mortgagee rights of the bank in the properties could not be treated as illegally acquired property under the Act. Therefore, the Competent Authority erred in forfeiting the mortgagee rights of the bank. The Tribunal modified the order to forfeit only the equity of redemption owned by the appellant in the properties, free from all encumbrances. In conclusion, the Tribunal partially allowed the appeal, holding that the mortgagee rights of the bank in the properties were not subject to forfeiture under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. The order of the Competent Authority was modified to forfeit only the equity of redemption owned by the appellant in the properties.
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