2019 (12) TMI 1497 - HC - Indian Laws

Forfeiture of property - direct relationship of the detenu with the property or not - if the property sought to be forfeited was the property of a person with whom a direct relationship of the detenu or the associate of the detenu could not be established, then it would be incumbent on the authority under the Act of 1976 to establish that the relevant property was acquired with illegal funds? - HELD THAT - In exercise of the authority of judicial review, the scope for interference is rather limited. When a fact-finding authority has addressed the objections of the writ petitioner and an appellate authority has endorsed the relevant order, the High Court in exercise of its jurisdiction under Article 226 of the Constitution cannot reappraise the matter. All that the High Court seeks to ascertain is whether the procedure adopted by the authorities under the relevant statute was rational, reasonable and proper. The High Court would also attempt to find out whether due notice was given to the writ petitioner, whether he was afforded a fair hearing and a reasoned order was passed. Once the High Court is satisfied that the order complained against was passed by an authority possessing jurisdiction, that the procedure adopted was reasonable and the process of adjudication culminated in a cogent decision, the High Court would not look any further. The other ground that can be invoked by the High Court to interfere with an order of such kind would be if the order shocks the conscience of the court, in the sense that no reasonable person in the position of the relevant executive or quasi-judicial authority could have passed the order on the set of facts before it. The facts in this case were that the writ petitioner had been detained under the Act of 1974, though the Advisory Board opined that there was not enough material against him to detain him. Even if the writ petitioner s status as a detenu under the Act of 1974 was wiped clean upon the opinion of the Advisory Board to not proceed against the writ petitioner, the writ petitioner s association with the said Pothiawala was good ground under Section 2(2)(d) of the Act of 1976 to forfeit any property of the writ petitioner. As to whether the writ petitioner was an associate of the said Pothiawala or the writ petitioner could be said to have had no nexus with such person, was essentially a question of fact. When the writ court discovered that a fact-finding authority had addressed the matter and had rendered a finding which was endorsed in appeal, unless glaring anomalies were demonstrated, the writ court would not have reopened the matter or revisited the issue - Appeal dismissed.

Summary

Issues:
1. Challenge to the order of forfeiture under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976.
2. Jurisdiction and principles of natural justice in the order of forfeiture.
3. Validity of detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.
4. Compliance with procedural requirements and fairness in the adjudication process.
5. Grounds for interference by the High Court in judicial review cases.

Issue 1: The primary issue in this case was the challenge to the order of forfeiture under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. The judgment highlighted that if the property sought to be forfeited did not have a direct relationship with the detenu or their associate, the authority needed to establish that the property was acquired with illegal funds. It was also noted that if the property belonged to a close relative of the detenu or their associate, the authority did not need to prove that the property was acquired through illegal means.

Issue 2: The judgment discussed the jurisdiction and principles of natural justice in the order of forfeiture. It emphasized that the challenge to the order was not based on lack of jurisdiction or breach of natural justice principles. The writ petitioner's status as an associate of a COFEPOSA detenu was crucial in determining the validity of the notice of forfeiture issued to the petitioner.

Issue 3: Another significant issue addressed was the validity of the detention under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. The grounds of detention indicated that the writ petitioner was involved in unauthorized financial activities in association with another individual, leading to the detention order in 1989. Despite evading the order initially, the petitioner surrendered in 1996 and was later released following a report by the Advisory Board.

Issue 4: The judgment delved into the compliance with procedural requirements and fairness in the adjudication process. It mentioned that the writ petitioner was directed to produce evidence regarding the sources of funds for the properties and assets held, and proceedings under the Act of 1976 were initiated. The petitioner chose not to attend some hearings, leading to the eventual forfeiture of properties by the Central Government.

Issue 5: Lastly, the judgment elaborated on the grounds for interference by the High Court in judicial review cases. It highlighted that the High Court's role was supervisory rather than appellate, focusing on the rationality, reasonableness, and propriety of the procedure adopted by the authorities. The High Court aimed to ensure due notice, fair hearing, and a reasoned order were provided, without delving into a reappraisal of the facts unless glaring anomalies were present.

In conclusion, the judgment dismissed the appeal challenging the order of forfeiture, emphasizing the limited scope for interference in judicial review cases and the importance of factual findings endorsed by relevant authorities. The High Court's supervisory role in ensuring procedural fairness and rational decision-making was underscored, ultimately upholding the order of forfeiture in this case.