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TMI Blog2022 (11) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Smuggling Activities Act, 1974 were launched, has come up with this appeal. 2. The appellant issued a notice under Section 6(1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (ACT 13 0f 1976), requiring the first respondent to show cause, as to why, her properties should not be forfeited under the provisions of the Act of 13 of 1976. The notice alleged that these properties have been purchased out of the monies that were illegally made by her father whose detention under the COFEPOSA Act, was sustained. Since she was unable to provide details of the sources of acquisition of the funds, the Authority prima facie felt that the properties have been illegally acquired and therefore, liable for forfeiture. 3. The Competent Authority after affording an opportunity to the first respondent herein by its order dated 10.03.1977, exercising powers under Section 7 of the Act 13 of 1976, passed an order forfeiting the properties belonging to the first respondent. Aggrieved the first respondent preferred an Appeal to the Appellate Tribunal for forfeited property in F.P.A.No.15/MDS/77-78. The Appellate Tribunal while allowing the Appeal in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urden of proof and after referring to Section 102 of the Evidence Act, concluded that if either of the parties do not let in evidence, it is the person charging who should fail and not the person charged. 6. Mr. R. Sankaranarayanan, learned Additional Solicitor General appearing for the appellant would contend that the Writ Court was not justified in referring to Section 102 of the Evidence Act, which is a General Law. The learned Additional Solicitor General would contend that Section 8 of the Act of 13 of 1976, makes a special Rule of evidence and it being a special enactment would override the provisions of the Evidence Act, which is a General Law. Relying upon Section 8 of Act of 13 of 1976, which reads as follows: "8. Burden of Proof.- In any proceedings under this Act, the burden of proving that any property specified in the notice served under Section 6 is not illegally acquired property shall be on the person affected." the learned Additional Solicitor General would submit that the burden of proving, absence of nexus is on the person charged and it is enough, if the Authority points outs that there is a possibility of there being a nexus between the illegal earnings and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... follows: "3. Definitions.- (1) In this Act, unless the context otherwise requires,- (c) "illegally acquired property", in relation to any person to whom this Act applies, means,- (i) 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pon such person (hereinafter referred to as the person affected) calling upon him within such time as may be specified in the notice, which shall not be ordinarily less than thirty days, to indicate the sources of his income, earnings or assets, out of which or by means of which he has acquired such property, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties, as the case may be, should not be declared to be illegally acquired properties and forfeited to the Central Government under this Act. (2) Where a notice under sub-section (1) to any person specifies any property as being held on behalf of such person by any other person, a copy of the notice shall also be served upon such other person. Section 7 of the Act which provides for forfeiture reads as follows: "7. Forfeiture of Property in certain cases.- (1) The competent authority may, after considering the explanation, if any, 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciates of the convict/detenu. There ought to be the connecting link between those properties and the convict/detenu, the burden of disproving which, as mentioned above, is upon the relative/associate. ... " Again in Aslam Mohammad Merchant v. Competent Authority and others, while considering the effect of a pari materia provision, namely Section 68 J of the Narcotic Drugs and Psychotropic Substances Act, 1985, the Hon'ble Supreme Court had observed as follows: "27. It is, therefore, evident that the property which is sought to be forfeited must be the one which has a direct nexus with the income etc. derived by way of contravention of any of the provisions of the Act or any property acquired therefrom. What is meant by identification of such property having regard to the definition of `identifying' is that the property was derived from or used in the illicit traffic." 14. Recently in Income Tax Officer v. V.Mohan and Another, the Hon'ble Supreme Court after exhaustively referring to the judgment of the Constitution Bench in Attorney General for India and Others v. Amratlal Prajivandas and others, had concluded that notice to the detenue or the actual offender is not necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General for India and Others v. Amratlal Prajivandas and others, the Authority must make out the jurisdictional fact, namely the nexus or the link between the acquisition and the consideration, if such a link is not made out, the question of disproving or proving the contrary will not arise dehors the fact that the burden of proof is cast on the noticee by virtue of Section 8 of the Act of 13 of 1976. In order to invoke the provisions of Sections 6 and 7, the Competent Authority must establish the jurisdictional fact. It should record reasons for the belief that the property would have been acquired by means of illegal earnings and that reason should disclose the nexus of the link. The mere failure to prove the source or absence of evidence to establish the source on the side of the noticee cannot by itself make the property an illegally acquired property. 18. No doubt the learned Additional Solicitor General would be right in his submission that the Writ Court ought not to have invoked Section 102 of the Evidence Act, to conclude that the burden is on the Competent Authority, but at the same time, he cannot succeed unless he is able to go one step further and establish the nexus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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