9911796707
TMI Blog1988 (10) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... da Arts (P.) Ltd., 2-E/6, Jhandewalan Extension, New Delhi, (6) Rajguru Enterprises, J-204, Malaviya Nagar Extension, New Delhi, (7) Guru Carpets (P.) Ltd., D-7/Model Town, New Delhi, and (8)'M/s. Gaurav International, 196, Panchsheel Enclave, New Delhi. Present address : H. No. 183, Sector 15, Faridabad. This order has been passed against Surinder Singh Sood who was involved in a customs case, along with four others, in April 1975, when consignment of skins of snakes, reptiles and other wild animals, was seized when it was in the process of being illegally exported through Air France. All of them were held guilty and penalties were imposed. Subsequently, Surinder Singh was detained under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as the "COFEPOSA Act"), on November 2, 1976. Two orders had been made on that date under this Act by the administrator of the Union Territory of Delhi, one under section 3(1) and the other under section 12A. In the first, it was mentioned that the detention was being effected with a view to prevent smuggling out of India of goods, viz., skins of snakes, reptiles and other w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, Surinder Singh stated that those sources had been accepted by the Income-tax Officer in the course of assessments for the relevant years and copies of one or two assessment orders were laid before the Competent Authority. Thereafter, he started absenting himself from the proceedings and a number of notices were issued to him requiring him to appear and produce evidence. The Competent Authority was quite considerate in granting adjournments, but ultimately when appearance was not being made, decided to proceed in his absence and then made the impugned order. So far as the three' immovable properties are concerned, Surinder Singh's case was that he had less than half share in house-No. J-204, Malaviya Nagar Extension, New Delhi, and that the entire property was later transferred in November 1978, for Rs. 3 lakhs by him and his brother to Mahender Singh. The plot of this land was said to have been acquired by the two brothers in 1971, for Rs. 68,960 from the Delhi Development Authority (total, along with overdue interest, came to Rs. 87,650) and Surinder Singh had paid his one-half share in the same as under Date of payment Amount Source 17-3-1971 Rs. 8,712 Withdrawal from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, New Delhi, which too had been purchased by Surinder Singh from the D. D. A. This was in 1969 for Rs. 24,707 and the payments thereof were said to have been made as under Date Amount Source of payment Rs. 23-4-1969 10, 880.00 Withdrawal from capital account with M/s. Big Dealers, partnership firm. 10-10-1969 244.45 -do- 14-11-1969 488.90 -do- 21-11-1970 733. 45 -do- 7-12-1970 244.45 -do- 10-12-1970 244.45 -do- A/c year for assessment year 1973-74 11,871.80 Withdrawal from own business Total : Rs. 24,787.88 Surinder Singh also intimated to the Competent Authority that he had parted with this flat in favour of Anil Kumar Grover for Rs. 48,000 on July 12, 1979, and the mode was the same as in the case of Mahender Singh, viz., execution of an irrevocable power of attorney, agreement to sell, receipt, etc. Unlike the case of Mahender Singh, the Competent Authority did not consider it proper to issue any notice to Anil Kumar Grover, and as such, according to the latter, he was absolutely unaware of the proceedings under the SAFEMA against this property. It was only when he received notice under section 19 of the SAFEMA after the passing of the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AFEMA to whom the provisions of the Act can be extended is that category of persons against whom there is an order of detention under the COFEPOSA Act. This is subject to the detention order having not been revoked before making of reference to the Advisory Board or on the report of the Advisory Board, etc. Since there was an order under section 12A of the COFEPOSA Act against Surinder Singh in the present case, the following relevant proviso (iii) to section 2 (2) (b) of the SAFEMA may be reproduced here : "(iii) such order of detention, being an order to which the provisions of section 12A of the said Act apply, has not been revoked before the expiry of the time for, or on the basis of, the first review under sub-section (3) of that section, or on the basis of the report of the Advisory Board under section 8, read with sub-section (6) of section 12A, of that Act or ... " For ascertaining the impact of this proviso, we may revert to section 12A of the, COFEPOSA Act which provided for review within 15 days by the appropriate Government if the declaration under section 12A was made by an officer, and in case the same was made by the appropriate Government itself, within four m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w is not reflected in this communication, it could be within the period of four months of the first detention as some time could have been thereafter consumed in the file moving from one office to the other. This latter part was not seriously disputed before us, though we feel that it can still be said that recourse to inference should not be left in such penal matters of far reaching consequences. We are not oblivious of the general presumption that official acts should be treated to have been done in the normal course. However, basing this presumption in a statute of the present nature, where the official records are not shown to be otherwise not available on inference, may not be right. The detention in the present case was made on November 2, 1976. The first review by the Administrator should have been made up to March 1, 1977. The review is shown to have been done in March 1977. It could be on any day from March 1, 1977, to March 7, 1977, when the order was communicated to Surinder Singh Why should it be taken that it essentially was on March 1, 1977, and not on any subsequent date has not been explained. Since, as the subsequent part of this order would show, we are sendin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the Competent Authority is vitiated as he failed to supply a copy of the reasons recorded by him for having recourse to the SAFEMA and issuing notice under section 6 to him. Reference in this regard has again been made to Haji Mastan's case, AIR 1984 SC 681, for pleading that the failure to supply such reasons and copies of documents relied upon, would vitiate detention and subsequent forfeiture of his properties. That was, however, a case arising under writ jurisdiction in which the learned court was competent to go into the validity of the detention order. This aspect, however, is not open to challenge before us in Tribunal as we cannot, while acting under the SAFEMA, consider the propriety, validity or otherwise of the detention under the COFEPOSA Act. It has also been urged from the side of the appellants that in most of the cases, reasons recorded by the Competent Authorities are supplied to the persons affected and the departure in the present case should be treated as discriminatory. Although we feel that normally such reasons and the material gathered, if any, should be supplied to the persons proceeded against under the SAFEMA, we find that in the present case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he office of the Competent Authority in the meanwhile, and they issued fresh notices to Surinder Singh. None of them chose to do so to Mahender Singh. He too, therefore, is justified in saying that he came to know of the impugned order only after the notice under section 19 of the SAFEMA was served on him. Even otherwise, we find that the initial notice that was issued to Mahender Singh required him to explain the source of investment of Rs. 3 lakhs which he made while purchasing the Malviya Nagar property. That was not the issue before the Competent Authority. He had not been detained at any time under the COFEPOSA Act nor fell within the four broad categories of persons enumerated in section 2(2)(a) of the SAFEMA. instead, the Competent Authority was concerned with the source of investment of Surinder Singh in this property while purchasing the plot and effecting construction thereon. Mahender Singh, therefore, could have been enquired if he could throw any light on that source, as the impact of non-compliance of that source had direct adverse consequences on his rights over this property. It was he who was ultimately going to suffer. Unfortunately, the Competent Authority did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so been made by them to section 1 1 of the SAFEMA which provides that where, after the issue of a notice under section 6 or under section 10, any property referred to in the said notice is transferred by any mode whatsoever, such transfer shall, for the purposes of the proceedings under this Act, be ignored and if such property is subsequently forfeited to the Central Government under section 7, then the transfer of such property shall be deemed to be null and void. It is pointed out that the transfer in favour of these appellants did not take place after the issue of notices under section 6 or under section 10 of the SAFEMA. The right to hold the properties arose in favour of these appellants much before that. In fact, so far as Smt. Satya Gupta is concerned, this was even before the detention of Surinder Singh under the COFEPOSA Act. The scheme of the SAFEMA shows that so far as the persons against whom the provisions of the statute can be extended are concerned, it is very broad-based. Not only it covers -those who are convicted under the Sea Customs Act, 1878, Customs Act, 1962, Foreign Exchange Regulation Act, 1947, and Foreign Exchange Regulation Act, 1973, involving prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence to the state of affairs in the present and the time factor of the acquisition would not be relevant. Of course, in this context, the impact of section 1 1 would have to be seen. Apart from taking away such bona fide acquirers of properties from the purview of the Act, section 3(1)(c), while defining "illegally acquired property", reiterates and clarifies that properties of such bona fide holders cannot be treated as illegally acquired. Thus, in clause (A), it is stated as under : " and includes - any property held by such persons which would have been, in relation to any previous holder thereof, illegally acquired property under this clause if such previous holder had not ceased to hold it, unless such persons or any other person who held the property at any time after such previous holder or, where there are two or more such previous holders, the last of such previous holders is or was a transferee in good faith for adequate consideration " Thus, those properties which have been acquired and held by persons as transferees in good faith for adequate consideration cannot be treated as ill-gotten and forfeited. The three appellants other than Surinder Singh, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endeavoured to plead on the authority of the earlier Supreme Court decision in the case of Union of India v. J. N. Sinha, AIR 1971 SC 40, that the principles of natural justice can be expressly excluded by a,statute and that this exclusion can as well be implied considering the scheme of the enactment. It was observed that (p. 42) : "the aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words, they do not supplant the law but supplement it". It had, at the same time, been observed that (at p. 42) : "it is true that if a statutory provision can be read consistently with the principles of natural justice, the courts should do so because it must be presumed that the Legislatures and the statutory authorities intended to act in accordance with the principles of natural justice. But, if on the other hand, a statutory provision, either specifically or by necessary implication, excludes the application of any or all the rules or principles of natural justice, then the court cannot ignore the mandate of the Legislature or the statutory autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngh. They were not partners in any of his businesses or connected with him. The manner in which Surinder Singh has conducted himself in these forfeiture proceedings is a pointer to absence of collusion, inasmuch as if the property had actually belonged to him and these transferees were mere namesakes or mala fide holding on his behalf, he would have contested the proceedings vigorously and endeavoured to prove to the hilt the source of their acquisition by him. We have already observed about the indifferent and dormant attitude he has adopted in this regard. So far as Smt. Satya Gupta is concerned, a number of documents have been laid before us. A registered sale deed exists in her favour of the date, March 12, 1976, and the entire consideration of Rs. 15,000 was paid by her on March 15, 1976, before the Sub-Registrar at the time of the registration of the deed. Since this plot had been allotted to Surinder Singh by the Haryana Urban Development Corporation, the transfer was got registered with that body as well, and it later handed over the possession of the plot to her. Permission for construction of the building thereon was as well obtained by her and the final completion/occ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard may as well exist. In case Surinder Singh wants to throw these persons out from these properties, they can, it would appear, successfully hold them and deny him of that. This is apart from the provisions of section 53A of the Transfer of Property Act embodying the rule of past performance. Under the Negotiable Instruments Act, a holder of a negotiable instrument is recognised as being for consideration and enjoys the fruits thereof. Strictly, the provisions of that statute are not applicable, but the use of the word "holder" by the Legislature in the SAFEMA cannot be treated as being without purpose and it has not to be interpreted as synonymous with "owner". Both Mahender Singh and Anil Kumar Grover, therefore, are entitled to show that they are the present holders being transferees in good faith for valuable consideration. The Competent Authority must provide them opportunity. That apart, arguments have been referred at length by Mr. Kumar, learned counsel appearing for Mahender Singh, for pleading that the protection under section 53A of the Transfer of Property Act is available to these appellants. They have been delivered possession and Surinder Singh has already ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised from both the sides with regard to section 53A of the Transfer of Properly Act do call for due consideration. None of this happened when the matter was pending before the Competent Authority as he did not care to associate these appellants with the forfeiture proceedings. Much can be said on the applicability of section 53A of the Transfer of Property Act. There can be a tenant of a long standing and it is a moot question if the Competent Authority, after forfeiture, can throw him out. Moreover, since there is no provision in the SAFEMA corresponding to section 53A of the Transfer of Property Act, it may be difficult to say how far the non obstante clause of section 24 would obliterate the effect of the former. So far as the Bombay High Court (AIR 1967 Bom 34) decision is concerned, it itself discusses how there has been conflict of decisions between different High Courts. That was a case of an auction purchaser at a court sale under a civil decree. In fact, the Madras High Court, in Annamalai Mudali v. Ramaswami Mudali, AIR 1941 Mad 161 [FB], in a Full Bench decision, appears to have taken a different view on the question whether an auction purchaser can be treated as a legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resh into facts and sources of investment and no finding of any officer or authority under any other law would be conclusive and binding for any proceedings under this Act, still, assessment orders made by independent officers, of the Income-tax Department, especially those made much nearer in time, are fairly relevant pieces of evidence and should not be lightly ignored. In the present case, the Competent Authority who has made the impugned order had issued a fresh notice under section 6 of the SAFEMA in 1987. This was almost after about 10 years or more of the acquisition of the properties by Surinder Singh. They covered a number of assessment years. The limitations of this time-lapse cannot be overlooked. Even for entering into reassessments, limitations have been prescribed under the Income-tax Act and normally that was four years, and in cases so directed by the Commissioner, eight years. It was rarely that the Board could direct reassessment after this period. Under the new amendment introduced in this law, the limitation is 10 years. It has also to be ascertained if a person, in normal circumstances, would continue to keep his account books of the business, even if the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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