2015 (7) TMI 1375 - HC - Indian Laws

Forfeiture of property - petitioner's only ground of challenge is that on the materials on record the Tribunal had not found it to be established that the properties ordered to be forfeited were the properties held by the petitioner on behalf of the detenue as his associate - HELD THAT - It is found that the said Court in SMT. KESAR DEVI VERSUS UNION OF INDIA ORS 2003 (7) TMI 650 - SUPREME COURT had interpreted the law declared in ATTORNEY GENERAL FOR INDIA VERSUS AMRATLAL PRAJIVANDAS 1994 (5) TMI 235 - SUPREME COURT . The Division Bench of the Supreme Court while delivering that interpretation, took note of the judgment in FATIMA MOHD. AMIN VERSUS UOI. 2003 (1) TMI 657 - SUPREME COURT delivered by a Larger Bench of the said Court. This Court finds in Fatima Mohd. Amin there does not appear to be any exercise made in interpreting the law declared in Amratlal Prajivandas. Since the interpretation was made subsequently by the Division Bench of the Supreme Court in the manner reproduced above, this Court is bound by such interpretation in following COMMISSIONER OF INCOME-TAX, WEST BENGAL-III VERSUS M/S. OBEROI HOTELS(P) LTD. 2011 (3) TMI 596 - CALCUTTA HIGH COURT and therefore cannot interfere with the order upholding the order of forfeiture made by the competent Authority on the ground that no link or nexus was found to have been established to show that the properties sought to be forfeited were the properties of the detenu, held by the associate, the petitioner. After the order was made Mr. Chakraborty submitted that he had further points of challenge regarding the impugned order being perverse on the ground that the petitioner is not the associate. Such argument made at belated stage after the order has been dictated pursuant to point of challenge raised as recorded in earlier order dated 15th July, 2015, cannot be considered - Prayer dismissed.

Summary

Issues:
Interpretation of the law regarding forfeiture of properties under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976.

Analysis:
1. The petitioner challenged an order of forfeiture of properties made by the competent Authority under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. The petitioner argued that the Tribunal did not establish that the properties ordered to be forfeited were held on behalf of the detenue. The petitioner relied on the interpretation of the Act by the Supreme Court in the case of 'Attorney General for India v. Amratlal Prajivandas'. The Revenue, on the other hand, relied on the judgment in 'Kesar Devi (Smt.) v. Union of India & Ors.' to argue that there is no requirement to establish a nexus between the money of the convict/detenu and the property sought to be forfeited. The matter was adjourned for further submissions on the applicable law.

2. The petitioner, referring to the decision in 'Kesar Devi (Smt.) v. Union of India & Ors.', argued that the competent Authority must indicate a link or nexus when the relationship between the property owner and the convict/detenu is remote. However, if the relationship is close, no such indication is necessary. The petitioner contended that the omission to mention cases of associates with no relationship should not lead to a blanket interpretation that no nexus needs to be established.

3. The petitioner further argued that the omission in the interpretation of the law should not be considered a straight-jacket formula. Referring to the case of 'Fatima Mohd. Amin v. Union of India', the petitioner highlighted the importance of establishing a link between the property sought to be forfeited and the illegally acquired money of the detenu. The court, following the interpretation provided by the Division Bench of the Supreme Court, dismissed the writ petition as the petitioner failed to establish the required nexus.

4. The Revenue relied on the judgment in 'Commissioner of Income Tax, West Bengal-III v. Oberoi Hotels (P) Ltd.' to emphasize the importance of following the interpretation provided by the Supreme Court, especially when there are conflicting opinions between different benches. The court noted the sequence of judgments and the binding nature of subsequent interpretations by the Supreme Court.

5. The court, after analyzing the judgments cited, concluded that the interpretation provided by the Division Bench of the Supreme Court in 'Kesar Devi (Smt.) v. Union of India & Ors.' must be followed. The court held that since the law was interpreted subsequently by the Division Bench, the petitioner's challenge based on the lack of established nexus between the properties and the detenu's money could not be upheld. The writ petition was dismissed, and the request for a stay on the order was rejected due to belated arguments.

This detailed analysis of the legal judgment provides a comprehensive overview of the issues involved and the arguments presented by both parties, leading to the final decision of the court based on the interpretation of the relevant laws and precedents.