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2024 (8) TMI 726 - AT - FEMAProperty forfeited under SAFEMA - Properties were also subject matter of TADA proceedings - HELD THAT - The perusal of Section 8 reveals it to be distinct than the provision of SAFEMA and thereby the judgment of the Apex Court Amina Ahmed Dossa 2001 (1) TMI 1028 - SUPREME COURT in reference to different statute cannot be applied. It is more so when even the facts giving rise to the case are different. If the Appellant and his relatives have filed declaratory suits before the Bombay High Court, it would have no bearing on the present proceedings but can be under TADA. Therefore, the first issue raised by the Appellant to challenge the impugned order is not made out. The forfeiture of property under TADA is to be dealt with as per the provision of TADA and would have no effect on the action taken as per the provision of SAFEMA. Validity of Notice under Section 6 of SAFEMA - obligation to first establish nexus between the income of the Detenue and the property in question - HELD THAT - As per plain reading of Section 6 of the Act we do not find that the Competent Authority should have issued Show Cause Notice after showing link or nexus with the income of Detenue and property sought to be forfeited. If the argument is accepted, we would be virtually rewriting the provision, which is not permissible. The second issue raised by the Appellant is accordingly rejected. Violation of Principles of Natural Justice - principles of nature justice have not been followed because proceeding remain pending before many officers but decided by one posted on the date of hearing - HELD THAT - In the instant case the final hearing was made by the Competent Authority on 23rd May, 2005 said to be for few minutes without any proof has resulted in pronouncement of order. It was by the same Authority. The written arguments itself show that the Appellant remain present on the date of hearing though said to be only of 10 to 15 minutes. It is however a fact that the order has been passed by the same Authority. Thus, arguments in reference to the principle of natural justice is not made out and therefore rejected summarily. Forfeiture of property - Flat No. 604 on 6th Floor of the building known as Bagh-e- Rehmat (Rajput Villa) Society, Agripada, in Bombay - Appellant has disclosed the source of acquisition of Flat No. 604 on 6th Floor. It may be that it was originally acquired by the detenue but having settled in favour of the Appellant pursuance to a decree, the forfeiture would nullify the decree of the Court. It cannot be said to be under collusion as the decree was made 10 years prior to detention. Thus, we do not find forfeiture of Flat no. 604 to be legally substantially and accordingly we make interference in the order for property aforesaid. Forfeiture of the property being protected by the realm of the provisions of the Rent Act and who can be affected by the forfeiture is the owner of the property and not the tenant -Provision for forfeiture of property under two different statutes are distinct and separate and the basis of forfeiture is also distinct and different. Section 21 of SAFEMA otherwise makes it clear that finding under other laws not to be conclusive proceedings under this Act. The judgment of the Apex Court in the case of Amina Ahmed Dossa v/s. State of Maharashtra 2001 (1) TMI 1028 - SUPREME COURT is already clarified and in any case if the Appellant is only the tenant and not the owner of the property should not get affected by the forfeiture of the property and according to the Appellant, he has already handed over the Flat No. 2B and Flat No. 12 for redevelopment of the said building. It could not be clarified how the Appellant is affected by the forfeiture when he is only a tenant. The allotment of Flat No. 502-503 by the developer shows that Appellant was in fact enjoying all the benefit in the property and therefore only the forfeiture of the property has been challenged, otherwise tenant would not be affected by change of the hands of the ownership. It may remain with the builder or with the Government. The Appellant has failed to disclose the source of acquisition of property with all the rights referred above. Thus, the arguments are not worth acceptance and thereby summarily rejected. Forfeiture of rented property - So far as Flat No. 611-C, of Meena Apartment is concerned, the source said to have been disclosed but we do not find any material on record to accept the contention. It is contented by the Appellant that he was having income out of gifts and further received Rs. 11,70,000/- under the Foreign Exchange Immunity Scheme, 1991 during the year ended 31st March 1992. The remittance under FEIS is only a mode of transfer and not evidence for receipt of genuine money by the Appellant. Further, the sum of Rs. 2 Lakh said to have been taken as loan from Ms. Hadia Haroon Merchant but no document for it has been submitted. It could have been Income Tax Return and loan agreement but no such document has been submitted. As regards Shop No. 1, on the Ground Floor of Ruksana Palace, Plot No. 57/54A, Mohd. Ali Road, Mumbai, the Appellant is stated to be on monthly rent. No pagdi or premium said to been paid by the Appellant. If that is so than there is no reason for tenant challenge forfeiture of property. We find failure of the Appellant to substantiate the arguments and failure to disclose the sources of property therefore we are unable to cause interferences of the impugned order of the forfeiture. Change of ownership would not affect the tenant - Appellant started a business in the name and style of Sana Communication Centre in 1992 however, it stood closed in 1995. It has been stated by the Counsel that the Appellant had income from interest on saving deposits but no source of such savings has been disclosed. Further, the appellant had purchased equipment for running Sana Communication Centre and income out of it has been received by way of FEIS, 1991 but no documentary evidence has been produced before this Tribunal to support the contentions, as aforesaid. Therefore, we do not find any substance in challenge to the forfeiture of the property in the hands of the Appellant. Property acquired by the Appellant from his natural guardian by a Conveyance Deed - The building has been given on lease and many tenants are said to be residing. It is stated that share of each Appellant is to the extent of 1/5th portion on the property and the source has been disclosed in the Income Tax Return. It is further stated that the property has been acquired by the appellants by way of gifts, but we do not find any material on record to substantiate the arguments and accordingly unable to accept the case of the Appellant against the forfeiture of the property. Property is in the ownership of Seth Ismailji Abdoolally Machiswala Religious and Charitable Trust and was originally let out to Municipal Corporation of Greater Bombay, however it ceased to use the premises - On a bare reading of the terms of the rent agreement relied upon by the appellants, it would show that the appellants are virtually owning the property. However, the appellants have failed to show any source for acquiring the said properties. The bank statement only shows entries but from the amount was sourced has not been proved. Thus for the reason given above and when Appellant is not claiming ownership of the property thus, we do not find any ground to cause interference in the impugned order.
Issues Involved:
1. Properties subject to TADA proceedings. 2. Validity of Notice under Section 6 of SAFEMA. 3. Violation of Principles of Natural Justice. Issue-wise Detailed Analysis: 1. Properties subject to TADA proceedings: The Appellants contended that the properties forfeited under SAFEMA were also subject to proceedings before the designated TADA Court. They argued that the TADA Court had released several properties and the Government did not challenge this order. They relied on the Supreme Court's judgment in "Amina Ahmed Dossa & Ors. v. State of Maharashtra" to support their claim. However, the Tribunal clarified that the provisions of SAFEMA are distinct from TADA, emphasizing that Section 8 of the TADA Act and Section 82 of the Code of Criminal Procedure cannot be applied to SAFEMA proceedings. The Tribunal concluded that forfeiture under SAFEMA is governed by its own provisions and is unaffected by TADA proceedings. 2. Validity of Notice under Section 6 of SAFEMA: The Appellants argued that the Competent Authority failed to establish a nexus between the income of the Detenue and the properties in question, citing the Supreme Court's judgment in "Aslam Mohammed Merchants v. Competent Authority & Ors." The Tribunal examined the relevant provisions of SAFEMA, specifically Sections 6, 7, and 8, and noted that the burden of proof lies on the person served with the notice to demonstrate that the properties were acquired through lawful means. The Tribunal referenced multiple Supreme Court judgments, including "Attorney General for India v. Amratlal Prajivandas" and "Kesar Devi v. Union of India," to affirm that the Competent Authority is not required to establish a direct link between the Detenue's income and the properties. The Tribunal rejected the Appellants' argument, stating that the burden of proof is on the Appellants to show that the properties were not illegally acquired. 3. Violation of Principles of Natural Justice: The Appellants claimed that the principles of natural justice were violated as the proceedings were handled by multiple officers but decided by one. The Tribunal found no merit in this argument, noting that the final hearing was conducted by the same Competent Authority who issued the order. The Tribunal concluded that the principles of natural justice were not violated and rejected the Appellants' argument. Individual Case Analysis: Abida Mohd. Dossa (Appeal No. FPA-4/BOM/2005): The Tribunal found substance in the Appellant's argument that the property was acquired almost 10 years before the Detenue's detention and pursuant to a decree. The Tribunal concluded that the forfeiture would nullify the court's decree and therefore interfered with the order, discharging the property from forfeiture. Mohd. Yaseen Mohd. Dossa & Anr. (Appeal No. FPA-5/BOM/2005): The Tribunal noted that the Appellants were tenants and not owners of the properties. It emphasized that tenants should not be affected by forfeiture and that the Appellants failed to disclose the source of acquisition. The Tribunal rejected the appeal, highlighting that the tenancy rights did not constitute ownership. Arafat Haroon Merchant (Appeal No. FPA-6/BOM/2005): The Tribunal found that the Appellant failed to substantiate the sources of income and acquisition of the properties. The Appellant's reliance on gifts and the Foreign Exchange Immunity Scheme was not supported by documentary evidence. The Tribunal upheld the forfeiture order. Tabrez Mohd. Dossa (Appeal No. FPA-7/BOM/2005): The Tribunal noted that the Appellant failed to provide documentary evidence for the sources of income and acquisition of the property. The Tribunal found no substance in the Appellant's challenge and upheld the forfeiture order. Tabrez Mohd. Dossa & Ors. (Appeal No. FPA-8/BOM/2005): The Tribunal found that the Appellants failed to provide sufficient evidence to substantiate their claims of acquisition through gifts and income tax returns. The Tribunal upheld the forfeiture order. Shahnawaz M. Dossa & Ors. (Appeal No. FPA-10/BOM/2005): The Tribunal noted that the Appellants failed to prove the source of the loan allegedly taken for acquiring tenancy rights. The Tribunal emphasized that tenants should not be affected by forfeiture and upheld the forfeiture order. Conclusion: The Tribunal allowed Appeal No. 4/2005, discharging the property from forfeiture, while dismissing the other appeals for lack of sufficient evidence and failure to disclose the sources of acquisition.
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