Forfeiture - Indian Laws - General

Meaning of word Forfeiture Quoting from Blacks Law Dictionary it was found that the terms fine , forfeiture and penalty are often used loosely and forfeiture is a penalty by which one looses his right and interest in a property. [State of Kerala, vs M/S. Bharathi Airtel limited - 2018 (11) TMI 1439 - KERALA HIGH COURT] The word forfeiture is defined in Murray s Oxford Dictionary :- The fact of losing or becoming liable to deprivation of goods in consequence of a crime, offence, or breach of engagement ..... the penalty of the transgression or a punishment for an offence . According to the dictionary meaning of the word forfeiture the loss or the deprivation of goods has got to be in consequence of a crime, offence or breach of engagement or has to be by way of penalty of the transgression or a punishment for an offence. Unless the loss or deprivation of the goods is by way of a penalty or punishment for a crime, offence or breach of engagement it would not come within the definition of forfeiture. This word forfeiture must bear the same meaning of a penalty for breach of a prohibitory direction. The fact that there is arithmetical identity, assuming it to be so, between the figures of the illegal collections made by the dealers and the amounts forfeited to the State cannot create a conceptual confusion that what is provided is not punishment but a transference of funds. If this view be correct, and we hold so, the legislature, by inflicting the forfeiture, does not go outside the crease when it hits out against the dealer and deprives him, by the penalty of the law , of the amount illegally gathered from the customers. The Criminal Procedure Code, Customs Excise Laws and several other penal statutes in India have used diction which accepts forfeiture as a kind of penalty. [Bankura Municipality Vs. Lalji Raja- 1953 (3) TMI 48 - SUPREME COURT] The word forfeiture is derived from the French word forfaiture which means the loss of property by violation of his own duty. The Black s Law Dictionary defines forfeiture as follows [See: Henry Campbell Black on Black s Law Dictionary , 1968, 4th Edition]: - the loss of a right, privilege, or property because of a crime, breach of obligation, or neglect of duty. something (especially money or property) lost or confiscated by this process; a penalty a destruction or deprivation of some estate or right because of the failure to perform some obligation or condition contained in a contract In R.S. Joshi, Sales Tax Officer, Gujarat Ors. v. Ajit Mills Limited Anr.- 1977 (8) TMI 140 - SUPREME COURT , while explaining the true purport and meaning of the term forfeiture observed that whether a forfeiture clause is penal in nature must be decided in the specific setting of a statute. The relevant observations read as under: - 18. Coming to forfeiture , what is the true character of a forfeiture ? Is it punitive in infliction, or merely another form of exaction of money by one from another? If it is penal, it falls within implied powers. If it is an act of mere transference of money from the dealer to the State, then it falls outside the legislative entry. Such is the essence of the decisions which we will presently consider. There was a contention that the expression forfeiture did not denote a penalty. This, perhaps, may have to be decided in the specific setting of a statute. But, speaking generally and having in mind the object of Section 37 read with Section 46, we are inclined to the view that forfeiture has a punitive impact. Black s Legal Dictionary states that to forfeit is to lose, or lose the right to, by some error, fault, offence or crime to incur a penalty. Forfeiture , as judicially annotated, is a punishment annexed by law to some illegal act or negligence. . . . ; something imposed as a punishment for an offence or delinquency. The word, in this sense, is frequently associated with the word penalty , According to Black s Legal Dictionary. The terms fine , forfeiture and penalty , are often used loosely and even confusedly; but when a discrimination is made, the word penalty is found to be generic in its character, including both fine and forfeiture. A fine is a pecuniary penalty and is commonly (perhaps always) to be collected by suit in some form. A forfeiture is a penalty by which one loses his rights and interest in his property. More explicitly, the U. S. Supreme Court has explained the concept of forfeiture in the context of statutory construction. Chief Justice Taney, in the State of Maryland v. The Baltimore Ohio RR Co. 11 L ED. 714, 712 observed: And a provision, as in this case, that the party shall forfeit a particular sum, in case he does not perform an act required by law, has always, in the construction of statutes, been regarded not as a contract with the delinquent party, but as the punishment for an offence. Undoubtedly, in the case of individuals, the word forfeit is construed to be the language of contract, because contract is the only mode in which one person can become liable to pay a penalty to another for breach of duty, or the failure to perform an obligation. In legislative proceedings, however, the construction is otherwise and a forfeiture is always to be regarded as a punishment inflicted for a violation of some duty enjoined upon the party by law; and such, very clearly, is the meaning of the word in the act in question 19. The same connotation has been imparted by our Court too. A Bench has held: Bankura Municipality v. Lalji Raja and Sons, 1953 Cri LJ 1101: According to the dictionary meaning of the word forfeiture the loss or the deprivation of goods has got to be in consequence of a crime, offence or breach of engagement or has to be by way of penalty of the transgression or a punishment for an offence. Unless the loss or deprivation of the goods is by way of a penalty or punishment for a crime, offence or breach of engagement it would not come within the definition of forfeiture This word forfeiture must bear the same meaning of a penalty for breach of a prohibitory direction. The fact that there is arithmetical identity, assuming it to be so, between the figures of the illegal collections made by the dealers and the amounts forfeited to the State cannot create a conceptual confusion that what is provided is not punishment but a transference of funds. If this view be correct, and we hold so, the legislature, by inflicting the forfeiture, does not go outside the crease when it hits out against the dealer and deprives him, by the penalty of the law, of the amount illegally gathered from the customers . THE AUTHORISED OFFICER, CENTRAL BANK OF INDIA VERSUS SHANMUGAVELU- 2024 (2) TMI 291 - SUPREME COURT (LB)