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TMI Blog1998 (5) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... Delhi-110006. (b) Shri Ramesh Chand, 5 Hastings Lane, New Delhi. (c) Skytone Electrical (India) Manufacturer of Cables and Wires, 43. Industrial Area, Faridabad-121001 (d) M/s. Pragati Construction Co. Engineers Contractors, W-49, Greater Kailash 1, New Delhi-11048. (e) M/s. Ganpat Rai Jagdish Narain, General Cloth Merchants Commission Agents, Katra Marwari, Nai Sarak, Delhi-6. (f) Shri Hira Chand Jain, Delhi (iii) Credit balance in Saving Bank AC (S.B. Sarafa (Market, (Chandni Chowk, (iv) F.D.R. in Union Bank of India (Delhi. 3. The petitioner Shanti Devi was the wife of one Basant Lal. The marriage had taken place in the year 1945. On 30.7.75 Basant Lal was ordered to be detained under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 with a view to preventing him from dealing in smuggled goods viz. foreign marked smuggled gold otherwise then by engaging in transporting or concealing or keeping smuggled goods. 3.1. On 27.9.77, the Income-tax Office, Spl.Circle-VI (Addl,), New Delhi furnished an information under Section 16(2) of the Act to the Competent Authority. By reference to the property state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally filed this petition has expired during the pendency of the petition. Her sons and daughters have sought for their substitution which has been allowed. However, the term petitioner wherever occurring in this order, refers to the original petitioner Smt. Shanti Devi. 6. It is in not dispute that the house property was acquired by registered deed of sale dated 17.2.61 (Annexure-D). The petitioner Shanti Devi is co-owner to the extent of one-half; the other half having been purchased in the name of Smt. Kalawati, the mother-in-law of the petitioner. Before her death Smt. Kalawati executed a Will as to her half share bequeathing (he same to the eldest daughter-in-law of Smt. Shanti Devi, whose name is Smt.Veena Devi. Proceedings under the Act have been initiated only against the petitioner Smt. Shanti Devi. No proceedings appear to have been initiated by the Competent Authority against the legal heirs of Smt. Kalawati Devi in respect of other one-half share in the property. Hence it is the one-half share of Smt. Shanti Devi in the house property which alone is under scrutiny. 7. The Appellate Tribunal has recorded a finding in its appellate order that Basant Lal had been the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of wealth tax, income-tax or other laws or by other means in the names of their relatives, associates and confidants in clandestine manner. 9.2. The Competent Authority may under Section 7 forfeit property on recording a finding that the properties in question were illegally acquired properties. Notice of forfeiture under Section 6 has to be given by the Competent Authority on having reason to believe to be recorded in writing, that all or any such properties were illegally acquired properties. Sections 4 prohibits as from the commencement of this Act any person to whom this Act applies to hold any illegally acquired property either by himself or through any other person on his behalf. 9.3. Vide Section 2, the provisions of the Act are applicable to a person in respect of whom an order of detention has been made under COFEPOSA 1974 amongst others and also to every person who is a relative of such a person. 'Relative' includes spouse of such person. Explanation 4 provides for the avoidance of doubt that the question whether any person is a person to whom the provisions of this Act applied may be determined with reference to any facts, circumstances or events includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of taxes is integral to such activity. It would be difficult for any authority to say, in the absence of any accounts or other relevant material that among the properties acquired by a smuggler, which of them or which portions of them are attributable to smuggling and foreign exchange violations and which properties or which portions thereof are attributable to violation of other laws (which the Parliament has the power to make). It is probably for this reason that the burden of proving mat the properties specified in the show cause notice are not illegally acquired properties is placed upon the person concerned. May be this is a case where a dangerous disease required a radical treatment. Bitter medicine is not bad medicine. In law it is not possible to say that the definition is arbitrary or is couched in unreasonably wide terms. (pages 2202-2203) 10. 2. What their Lordships have held (in para 43) while clearing with Question No. 5, needs to be extracted and reproduced extensively for in our opinion the law laid down by their Lordships provides key to solving the riddle posed before us. Their Lordships have held : 43. Question No. 5 : It is contended by the Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rview of the Act. The fact of their holding or possessing the properties of convict/detenu, furnishes the link between the convict/detenu and his relatives and associates. Only the properties, of the convict/detenu are sought to be forfeited, wherever they are. The idea is to reach his properties in whosoever's name they are kept or by whosoever they are held. The independent properties of relatives and friends, which are not traceable to the convict/detenu, are not sought to be forfeited nor are they within the purview of SAFEMA**. We may proceed to explain what we say. Clause (c) speaks of a relative of a person referred to in Clause (a) or Clause (b) (which speak of a convict or a detenu). Similarly, Clause (d) speaks of associates of such convict or detenu. If we look to Explanation (3) which specifies who the associates referred to in clause (d) are, the matter becomes clearer. Associates means : (i) any individual who had been or is residing in the residential premises (including outhouses) of such person ( such person') refers to the convict or detenu, as the case may be, referred to in Clause (a) or Clause (b); (ii) any individual who had been or is managing the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erties traceable to him wherever they are, ignoring all the transactions with respect to those properties. By way of illustration, take a case where a convict/detenu purchases a property in the name of his relative or associate--it does not matter whether he intends such a person to be a mere name-lender or whether he really intends that such person shall be the real owner and/or possessor thereof--or gifts away or otherwise transfers his properties in favour of any of his relatives or associates, or purports to sell them to any of his relatives or associates--in all such cases, all the said transactions will be ignored and the properties forfeited unless the convict/detenu or his relative/associate, as the case may be, establishes that such property or properties are not illegally acquired properties within the meaning of Section 3(c). In this view of the matter, there is no basis for the apprehension that the independently acquired properties of such relatives and associates will also be forfeited even if they are in no way connected with the convict/detenu. So far as the holders (not being relatives and associates) mentioned in Section 2(2)(e) are concerned, they are dealt wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the properties of relatives and associates are concerned they are not liable to be forfeited unless same connecting link or nexus between such properties and the activities of such detenu/convict is brought out. Once there is some material available before the Competent Authority which would enable recording of reasons to believe that all or any such properties are illegally acquired properties so as to issue a notice of forfeiture under Section 6 of the Act the rule of evidence enacted by Section 8 casting the burden of proof on the person affected would come into play. In the total absence of such connecting link or the nexus being available the said rule of evidence enacted by Section 8 would not be attracted. 12. A perusal of the order of the Appellate Tribunal shows that though the petitioner had tried to explain and establish the source of acquisition of the said house property as accountable to her own means, but the Tribunal found such explanation extending only to part of the value of the property and not the entire value of the property. However, the fact remains that on the record mere is nothing available to show the detenu Basant Lal having indulged into any illegal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law the burden of proof could not have been cast on the person proceeded against and even if so cast by the law yet the onus of proving the facts attracting the applicability of presumption would lie on the State. 15. Salmond states in his work on Jurisprudence (12th Edn. at page 14) : Here we must notice that peculiarity of English Law, the penal action. At one time it was a frequent practice, when it was desired to repress some type of conduct thought to be harmful, to do so by the machinery of the civil rather than of the criminal law. The means so chosen was called a penal action, as being brought for the recovery of a penalty and it might be brought according to the wording of the particular statute creating the penal action, either by the Attorney-General on behalf of the State, or by a common informer on his own account. Since penal actions follow all the forms of civil actions, and are governed by the same rules, we must regard them as civil actions, and ignore for the purpose of classification their resemblances to criminal law. 15.1. The necessity of proof has led to development of rules of evidence. One of me rules of evidence is conditional presumptions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. Experience guided the Legislature in placing burden of proof on the person best able to bear it or who may most justly be made to bear it. It is combination of procedural expedient and conclusion firmly based upon the results of wide human experience earned by the framers of the rule. It takes care of unusual situations brought into being by evaders of law. The rule may in individual cases prove to be too hard but has to be sustained in the interest of society at large. While applying the rule controlling standards shall have to be associated with its applicability else the rule may turn out to be 'law beyond the law' to borrow the phrase from Lloyd. Such 'controlling standards' are to be found in the Act itself and in the law laid down by their Lordships in the case of Attorney General v. Amrit Lal (supra). 20. The language of Section 8 itself is suggestive of its applicability depending on availability of two factors, namely : (1) there must be proceedings under this Act, (ii) there must be a notice under section 6 specifying the property as illegally acquired property. Section 6 provides the third relevant factor (iii) the Competent Authority must have re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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