2021 (1) TMI 134 - HC - Indian Laws

Seeking forfeiture/surrender of illegally acquired property - petitioner claims that he is a bonafide purchaser, for valuable and adequate consideration, of the said property - further case of petitioner is that the impugned order were passed without any notice to the petitioner and without affording him any opportunity to be heard - principles of natural justice - Section 68-U of the Narcotic Drugs and Psychotropic Substances Act, 1985 - HELD THAT - There is no dispute that the petitioner is a bonafide purchaser and had purchased the said property for a valuable consideration. It is also averred in the present petition, which is not traversed by the respondent, that the petitioner had availed of a loan from HDFC for purchasing the said property and a No Objection Certificate stating that the said property was not subject to any encumbrance or liability had been issued by Sinchan Cooperative Housing Society for the purpose of availing the said loan - The petitioner has been holding the said property since 1996 and it is not disputed that no notice of any proceedings in respect of the said property had been issued to the petitioner. There is no real controversy in respect of the essential facts that are necessary to address the challenge to the impugned orders. Admittedly, the said property had been purchased by Sh. Anand Kumar Bagla prior to issuance of notice under Section 68-H(1) of the NDPS Act. After securing a legal opinion, the Director, NCB had, by a letter dated 06.01.1994, duly informed that the said property had been incorrectly frozen and that the order had been passed inadvertently. The Competent Authority had also accepted that the said property had been transferred to Smt. Krishna Devi Bagla and Sh. Anand Kumar Bagla in good faith and prior to passing the freezing orders under the NDPS Act - In the given circumstances, the Competent Authority was required to consider the same before passing any fresh order of forfeiture. Although the said order of forfeiture was required to be passed by 31.07.1993, the impugned orders were passed almost twenty-seven years thereafter and that too without considering that it had been duly accepted by the Competent Authority that the said property is to excluded from the proceedings. The order passed by the Competent Authority under Section 68I of the NDPS Act to the extent that it forfeits the said property under Section 68-I of the NDPS Act, is without jurisdiction. Mr. Kishore had also contended that an appeal under Section 68-O of the NDPS Act would not be available to the petitioner since the petitioner was not a person to whom the provisions of Chapter V-A of the NDPS Act are applicable - The said contention is, plainly, unmerited. A plain reading of the opening sentence of Section 68-O of the NDPS Act clearly indicates that any person aggrieved by an order of Competent Authority, inter alia, passed under Section 68-I can file an appeal. However, considering that there is no controversy as to the essential facts and it is conceded that it was accepted that the said property was liable to be excluded from the schedule of the properties of the affected person/his relatives or associates, this Court does not consider it apposite to relegate the petitioner to exhausting his statutory remedy. More so as the order passed by the Competent Authority to the extent that it seeks to forfeit the said property and requires its surrender, is without jurisdiction. The impugned orders to the extent that the purport to declare the said property as forfeited to the Central Government and demands it s surrender, are set aside - petition allowed.

Summary

Issues:
Challenge to orders under Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) regarding forfeiture and surrender of property.

Analysis:
1. The petitioner contested orders dated 12.03.2020 under Section 68-U of NDPS Act directing property surrender and under Section 68-I(1) and (3) declaring property forfeiture. Petitioner claimed to be a bonafide purchaser without notice or hearing.

2. Petitioner argued ignorance of a 1994 order excluding the property from NDPS Act's Chapter V-A. Property linked to Virendra Kumar Rai's illicit drug proceeds, leading to forfeiture attempts.

3. Property history involved purchases by various individuals, including petitioner in 1996. Competent Authority wrongly included property in forfeiture list despite legal opinions favoring exclusion.

4. Competent Authority's 2020 orders were ex parte, ignoring past legal opinions and exclusion acceptance. Petitioner's bonafide purchase status and lack of notice were undisputed.

5. Legal arguments cited NDPS Act's Section 68A provisions, emphasizing petitioner's exclusion from Chapter V-A's scope due to bonafide acquisition.

6. Competent Authority's jurisdictional error in forfeiting property without considering exclusion and past legal opinions was highlighted.

7. Court ruled in favor of petitioner, setting aside orders declaring property forfeiture and demanding surrender due to Competent Authority's jurisdictional lapse.

8. Court rejected the need for petitioner to exhaust statutory appeal remedy, given undisputed facts and Competent Authority's error, leading to order annulment.

9. Ultimately, the impugned orders declaring property forfeiture and demanding surrender were overturned, and the petition was allowed in favor of the petitioner.