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TMI Blog2008 (3) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... to make enquiries regarding the agricultural land, house, investments and capital account shown in the balance sheet of the petitioner in W.P.No.1150/2001. Such petitioner furnished details of the accounts right from 1950-51 till 1966-67 by referring to the regular income tax assessments which had been completed by the Income Tax Officers. 2.On 02.02.1980, the competent authority (the 2nd respondent) issued a notice under Section 6 of the Act to the convict which was in respect of certain gold ornaments and there was not even a single whisper relating to the immovable properties standing in the name of the present petitioners. Thereafter, the petitioner in W.P.No.1150 of 2001 furnished further particulars pursuant to the query of the Income Tax Officer and also furnished different particulars relating to query made by the competent authority vide notice dated 29.03.1993. At that stage, a notice, purporting to be under Section 6 of the Act, was served on the petitioner in W.P.No.1150 of 2001 listing certain immovable properties as well as investments and jeweleries. It was indicated by the said petitioner that the books of accounts had been maintained since 1950 and she also fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not illegal on the above account, the notice was required to be served on the convict and a copy was required to be served on the relative as specifically envisaged under Section 6 of the Act and therefore in the absence of the notice as contemplated, the entire proceeding was vitiated. (iii)The Appellate Tribunal acted illegally in ignoring altogether the report of the Income Tax Officer which was sought for and secured by the 2nd respondent himself. (iv)Keeping in view the voluminous materials produced on behalf of the writ petitioner indicating about their own income which had been accepted and assessed by the Income Tax Authorities for a considerable length of period, extending from 1950 onwards, there was no justification for the Appellate Tribunal to reject such unrebutted materials produced by the petitioner, which would clearly indicate that the petitioner had acquired the property from out of her own income and such property had nothing to do with the convict. (v)The conclusion of both the authorities are based on surmises and conjectures, completely ignoring the various materials produced on behalf of the petitioner and thus the orders are vitiated by non-appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7.Section 3 contains the definition clauses. As per clause (c) illegally acquired property, in relation to the concerned person means, (i)any property acquired by such persons whether before or after the commencement of this Act, wholly or partly out of or by means of any income, earnings or assets derived or obtained from or attributable to any activity prohibited by or under any law for the time being in force relating to any matter in respect of which Parliament has power to make laws; or (ii)any property acquired by such person, whether before or after the commencement of this Act, wholly or partly out of or by means of any income, earnings or assets in respect of which any such law has been contravened; or (iii)any property acquired by such person, whether before or after the commencement of this Act, wholly or partly out of or by means of any income, earnings or assets the source of which cannot be proved and which cannot be shown to be attributable to any act or thing done in respect of any matter in relation to which Parliament has no power to make laws; or (iv)any property acquired by such person, whether before or after the commencement of this Act, fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the show cause notice issued under section 6, and the materials available before it and after giving to the person affected (and in a case where the person affected holds any property specified in the notice through any other person, to such other person also) a reasonable opportunity of being heard, by order record a finding whether all or any of the properties in question are illegally acquired properties. (2)Where the competent authority is satisfied that some of the properties referred to in the show cause notice are illegally acquired properties but is not able to identify specifically such properties, then, it shall be lawful for the competent authority to specify the properties which, to the best of its judgment, are illegally acquired properties and record and finding accordingly under sub-section (1). (3)Where the competent authority records a finding under this section to the effect that any property is illegally acquired property it shall declare that such property shall, subject to the provisions of this Act, stand forfeited to the Central Government free from all encumbrances. (4)Where any shares in a company stand forfeited to the Central Government un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame 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. ... 11.In 2003 (7) SCC 427 KESAR DEVI v. UNION OF INDIA, it was observed in paras 10 12 which is as follows: 10.Section 2(1)of SAFEMA lays down that the provisions of the said Act shall apply only to the persons specified in the sub-section (2) of that section. Sub-section (2) of Section 2 gives a long l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the notice served under Section 6 is not illegally acquired property, shall be on the person affected. The combined effect of Section 6(1) and Section 8 is that the competent authority should have reason to believe (which reasons have to be recorded in writing) that properties ostensibly standing in the name of a person to whom the Act applies are illegally acquired properties, he can issue a notice to such a person. Thereafter, the burden of proving that such property is not illegally acquired property will be upon the person to whom notice has been issued. The statutory provisions do not show that the competent authority, in addition to recording reasons for his belief, has to further mention any nexus or link between the convict or detenu [as described in sub-section (2) of Section 2] and the property which is sought to be forfeited in the sense that money or consideration for the same was provided by such convict or detenu. If a further requirement regarding establishing any link or nexus is imposed upon the competent authority, the provisions of Section 8 regarding burden of proof will become otiose and the very purpose of enacting such a section would be defeated. 12.Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of which or by means of which he had acquired the properties sought to be forfeited. When the competent authority has the reason to believe that the property even if held in the name of a relative is in fact the property of the convict, such competent authority is required to send a notice under Section 6(2) of the Act upon such relative. This is to be done by serving .... copy of the notice under Section 6(1). In the present case, admittedly, no notice has ever been served on the convict under Section 6(1) in relation to the property standing in the name of the petitioner. 15.Learned counsel for the Central Government had contended that since the ostensible owners had been served with the notice and had all opportunity to establish that the properties were actually their own property, it cannot be said that any prejudice has been caused to the petitioner on account of non-service of notice under Section 6(1) on the convict. 16.Even though such a submission may appear, prima facie, to be attractive, on a closer scrutiny cannot be accepted. There is no doubt that any action taken under the Act has got far reaching consequence. The ostensible owner of a property is likely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r passed by the appellate tribunal cannot be supported, as according to the petitioner, inspite of furnishing copious materials, the appellate tribunal has merely short circuited the contentions raised on behalf of the present petitioner. The learned Senior Counsel has painstakingly taken us through the various materials in support of his submission that the conclusion of both the authorities are in fact not based on materials on record and several relevant materials on record have been illegally ignored. In view of our conclusion that the competent authority lacked jurisdiction to proceed further in the absence of issuance of any notice under Section 6(1), it is not necessary to delve further into such aspect. Similarly, the other contentions need not be decided in these writ petitions. 20.Learned counsel for the respondents submitted that if, in any case, this Court concludes that in the absence of any notice under Section 6(1) the proceedings were vitiated, the authorities should be given the option to proceed further by issuing fresh notice. Learned Senior Counsel for the petitioner, on the other hand, submitted that since the convict has admittedly expired in the meantime, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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