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TMI Blog2023 (3) TMI 1074X X X X Extracts X X X X X X X X Extracts X X X X ..... tendered by Appellant nos. 2 to 5 regarding their source of income and it was disbelieved at all stages and a finding was returned that major part of the investment has been treated as income from undisclosed sources. That apart, no evidence was placed by Appellant no. 2(P.M. Saheeda) on record to justify that the land in question was purchased from the resources available at her command in the year 1969, through the sale deed dated 16th April, 1969. In the given circumstances, the appellants are not entitled to seek protection of Section 9 of the Act 1976. That apart, as regards the submissions made by the counsel for the appellants to impose fine in lieu of forfeiture, as contemplated under Section 9 of the Act 1976, after noticing the argument advanced by the appellants before the High Court, a categorical finding has been recorded as to why the appellants are not entitled to seek protection of Section 9 of the Act 1976, as held that major investment remain unexplained and also disbelieved the version of the 2nd petitioner on the ground that the proof of gift from her marriage has not been produced. Thus, according to the Competent Authority as well as the Appellate Tribunal, ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Maharashtra and later by the Central Government by order dated 27th August, 1991. The two detention orders against N.A. Yusuf came to be challenged in the writ petition before Delhi High Court. Both the petitions were allowed by judgments dated 15th October, 1991 and 11th May, 1992 respectively. In consequence thereof, the forfeiture order passed by the competent authority on 23rd November, 1977 came to an end. 4. On 16th October, 1994, a show cause notice was issued to the first appellant firm and its partners calling upon them to provide an explanation as to why the subject theatre (M/s. Platinum Theatre) should not be forfeited. After affording opportunity of hearing, the competent authority, in the first instance, passed an order of forfeiture against the first appellant firm forfeiting M/s. Platinum Theatre and its equipment by order dated 31st July, 1995. However, on appeal being preferred at the instance of the appellants, the matter was remanded back to the competent authority for fresh consideration by order dated 17th July, 1997. 5. The competent authority after revisiting the matter afresh and affording an opportunity of hearing to the parties, passed an order dated 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er confirmed by the Tribunal in the impugned judgment, in counter, has made the following submissions: (i) Section 8 of the Act, 1976 provides that the burden to proof, in any proceedings under this Act, shall lie on the person affected. The appellants have failed to discharge the said burden, in consequence of which the finding recorded by the competent authority duly supported with the material on record justify and support the order of forfeiture passed by the competent authority dated 31st December, 1997. (ii) Both N.A. Yusuf and appellant no. 2(P.M.Saheeda) failed to disclose any source of their capital contribution in the first appellant firm and have failed to disclose any books of accounts for the expenditure in construction of the subject theatre and also failed to disclose any bank account from which money was disbursed for building the said theatre. In addition, appellant no. 2(P.M. Saheeda) failed to substantiate with proof the claim that the land was bought from her wedding gifts in 1969. In the facts and circumstances, the finding of forfeiture recorded by the competent authority has been rightly confirmed at all later stages in the course of proceedings. (iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Section 2(2)(b) that every person in respect of whom an order of detention has been made under the COFEPOSA and also includes every associate of a person referred to in clause (a) or clause (b) as defined in subclause( d) read with Explanation 3, which refers to an associate and covers all individuals who had been or is a member, partner or director of an association of persons including association, body, partnership firm or private company, etc. 11. Sections 2, 6, 7, 8 and 9 of the Act, 1976 which are relevant for the purpose, are extracted hereinbelow: "2. Application. (1) The provisions of this Act shall apply only to the persons specified in subsection (2). (2) The persons referred to in subsection (1) are the following, namely: (a) every person (i) who has been convicted under the Sea Customs Act, 1878 (8 of 1878), or the Customs Act, 1962 (52 of 1962), of an offence in relation to goods of a value exceeding one lakh of rupees ; or (ii) who has been convicted under the Foreign Exchange Regulation Act, 1947 (7 of 1947), or the Foreign Exchange Regulation Act, 1104 1973 (46 of 1973), of an offence, the amount or value involved in which exceeds one lakh of rup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elation to a person, means ( i) any individual who had been or is residing in the residential premises (including outhouses) of such person; (ii) any individual who had been or is managing the affairs or keeping the accounts of such person; (iii) any association of persons, body of individuals, partnership firm, or private company within the meaning of the Companies Act, 1956 ( 1 of 1956), of which such person had been or is a member, partner or director; (iv) any individual who had been or is a member, partner or director of an association of persons, body of individuals, partnership firm or private company referred to in clause (iii) at any time when such person had been or is a member, partner or director of such association, body, partnership firm or private company; (v) any person who had been or is managing the affairs, or keeping the accounts, of any association of persons, body of individuals, partnership firm or private company referred to in clause (iii); (vi) …." …. 6. Notice of forfeiture. (1) If, having regard to the value of the properties held by any person to whom this Act applies, either by himself or through any other person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where any shares in a company stand forfeited to the Central Government under this Act, then, the company shall, notwithstanding anything contained in the Companies Act, 1956 (1 of 1956), or the articles of association of the company, forthwith register the Central Government as the transferee of such shares. 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. 9. Fine in lieu of forfeiture. (1) Where the competent authority makes a declaration that any property stands forfeited to the Central Government under section 7 and it is a case where the source of only a part, being less than onehalf of the income, earnings or assets with which such property was acquired has not been proved to the satisfaction of the competent authority, it shall make an order giving an option to the person affected to pay, in lieu of forfeiture, a fine equal to one and onefifth times the value of such part. Explanation. For the purposes of this subsection, the value of any part of income, earnings or assets, with which any property has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nership Deed as well as returns of M/s. Platinum Theatre that clearly indicates that N.A. Yusuf contributed Rs.5 lakhs. Appellant no.2 (P.M. Saheeda) and her minor son contributed Rs.5.20 lakhs. The partners are the joint owners of the property of a firm by virtue of their capital contribution in terms of Partnership Deed. 15. N.A. Yusuf has not disclosed any source from which he got capital contribution of Rs.5 lakhs. In respect of contribution made by Appellant no. 2(P.M. Saheeda) and her minor son to the tune of Rs. 5.20 lakhs in the partnership firm, no explanation was tendered about the source of funds infused in the partnership firm. The authorities of the incometax department on assessment were able to substantiate that neither the source of contribution made by N.A. Yusuf nor anyone else and the entire sum of Rs.4.57 lakhs was assessed as income of Appellant no. 2(P.M. Saheeda). From the other documentary evidence which has come on record, it reveals that the construction and decoration of the theatre was undertaken by N.A. Yusuf as a proprietor. A finding was recorded that the entire capital in M/s. Platinum Theatre in the names of N.A. Yusuf, P.M. Saheeda(Appellant no. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th April, 1969. In the given circumstances, the appellants are not entitled to seek protection of Section 9 of the Act 1976. 17. That apart, as regards the submissions made by the counsel for the appellants to impose fine in lieu of forfeiture, as contemplated under Section 9 of the Act 1976, after noticing the argument advanced by the appellants before the High Court, a categorical finding has been recorded as to why the appellants are not entitled to seek protection of Section 9 of the Act 1976, which is as follows: "The argument of petitioners' counsel is, major contribution is from the petitioners and that the land in question was acquired in the year 1969 prior to the entering into a partnership agreement out of the borrowings of 2nd petitioner Saheeda and that land in question ought not have been taken into consideration to forfeit the same, and as such, the Competent Authority and the Appellate Tribunal ought to have taken note of the same into consideration only to impose fine and not to forfeit the property and also the land in question should be available to the petitioners and it should not be the subject matter of forfeiture. In this regard, it appears the Compete ..... X X X X Extracts X X X X X X X X Extracts X X X X
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