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Issues Involved:
1. Forfeiture of immovable property (Kadam-Sahatka Wadar, Gwalior) 2. Forfeiture of immovable property (constructed property) 3. Forfeiture of appellant's share and interest in Neelam Watch Co. 4. Forfeiture of Government Bonds 5. Forfeiture of life insurance policy Detailed Analysis: 1. Forfeiture of Immovable Property (Kadam-Sahatka Wadar, Gwalior) The first asset forfeited is the property Kadam-Sahatka Wadar, Gwalior, purchased by the appellant in 1958 for Rs. 6,000. The Competent Authority suggested that the property was bought by the appellant's father, who was not assessed to income-tax and could not have saved enough to acquire such properties, concluding that the funds were from illegal earnings. The appellant argued that no adverse order could be made under SAFEMA for a property purchased before the Act's commencement in 1975 and without initiating proceedings against his father, who provided the funds. Additionally, the property was sold in 1982 to third parties who were not heard by the Competent Authority. The court found that forfeiture cannot be sustained when neither the person providing the funds nor the current owner was heard. Thus, the order of the Competent Authority in respect of this asset was set aside. 2. Forfeiture of Immovable Property (Constructed Property) The second asset is an immovable property valued at Rs. 1,08,000, constructed by the appellant on a plot purchased in 1972 for Rs. 4,000. The construction was completed by 1976 with an investment of Rs. 1,05,000, recorded in the books of Neelam Watch Co. The Competent Authority observed that the investments were recorded in the business books, but the business was considered an illegally acquired property. The court disagreed, stating that the business income, primarily from watch repairs, was not tainted. The explanation for the acquisition of the house was found probable and could not be disbelieved without contrary evidence. The order of the Competent Authority in respect of this asset was set aside. 3. Forfeiture of Appellant's Share and Interest in Neelam Watch Co. The appellant's share in Neelam Watch Co., which became a firm in 1975, was forfeited. At the firm's commencement, the appellant had a balance of Rs. 6,417, but unexplained amounts of Rs. 5,350 and Rs. 10,782 were introduced as capital. The court noted that only Rs. 6,500 could be explained, while about Rs. 16,000 were from unexplained sources. The Competent Authority's decision to forfeit this asset was upheld. 4. Forfeiture of Government Bonds The appellant acquired Government Bonds worth Rs. 1,250 in December 1975 during a voluntary disclosure. The appellant claimed the amount was part of withdrawals for income-tax, but the court found no funds left in his account to support this claim. The forfeiture of this asset was confirmed. 5. Forfeiture of Life Insurance Policy The life insurance policy for Rs. 10,000, taken out in 1972, was also forfeited. The appellant claimed the premiums were paid from his business capital account. However, the court noted that his drawings were inadequate to cover household expenses, and no evidence was provided to support the adequacy of his drawings. The forfeiture of this asset was upheld. Conclusion: The court set aside the forfeiture of the two immovable properties but confirmed the forfeiture of the three movable properties. The appeal was allowed in part. The separate judgment by D. R. Khanna emphasized that the unexplained amounts of Rs. 5,200 and Rs. 5,350 should be forfeited along with any attributable interest, and an inquiry should be directed by the Competent Authority to determine the appellant's current capital and assets in the business. The insurance premiums and Government bonds were confirmed to be forfeited.
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