2003 (7) TMI 650 - SC - FEMA

Whether the notice issued by the competent authority satisfies the requirement of Section 6? Held that - Kesar Devi has never been assessed to tax nor has she ever filed her return of income. Kesar Devi is the holder of house property D-48 Bapu Nagar Jaipur. Kesar Devi in her statement on 22.7.1976 before Sh. S.P. Gupta Inspector Jaipur has stated that she purchased the plot of land D-48 Bapu Nagar about 13 years back and immediately thereafter constructed a house on this plot.When specifically questioned about evidence in respect of the assertions made by her regarding the source of investment in the plot or the construction of the house she in no unequivocal terms admitted that she had no evidence. Kesar Devi is reported to have had no known sources of income. The source of investment in the house therefore remains unproved. The house property thus constitutes property which has wholly or partly come 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 and accordingly is a property within the meaning of Sec. 3(1)(c)(iii) of the SAFEMA. The notice clearly records the reasons for belief and therefore it fully complies with the requirement of law and there is no infirmity in the same.

Summary

Issues Involved:
1. Validity of the detention order under COFEPOSA Act.
2. Legitimacy of the forfeiture of properties under SAFEMA.
3. Requirement of establishing a link or nexus between the illegally acquired money and the properties to be forfeited.
4. Compliance with procedural requirements under Section 6(1) of SAFEMA.

Issue-wise Detailed Analysis:

1. Validity of the Detention Order under COFEPOSA Act:
The appellant challenged the detention order passed under the COFEPOSA Act, arguing that the court should examine the validity of the detention order when challenging the forfeiture of property under SAFEMA. The appellant relied on the decision in Union of India Vs. Haji Mastan Mirza, which was overruled by a nine-judge bench in Attorney General for India v. Amratlal Prajivandas. The Supreme Court held that if the detenu did not challenge the detention order during its validity or was unsuccessful in such a challenge, neither the detenu nor their relatives could question its validity when it forms the basis for applying SAFEMA.

2. Legitimacy of the Forfeiture of Properties under SAFEMA:
The competent authority and the appellate authority both concluded that there was no evidence to support the appellant's claim that she had any independent income to acquire the properties. The authorities found that the properties were acquired with the money provided by her husband, Jagannath Sharma. The Supreme Court upheld this finding, agreeing that the authorities had conducted a thorough appraisal of the evidence.

3. Requirement of Establishing a Link or Nexus:
The appellant argued that the notice under Section 6(1) of SAFEMA should show a link or nexus between the properties sought to be forfeited and the illegally acquired money of Jagannath Sharma. The Supreme Court clarified that under the scheme of SAFEMA, there is no requirement for the competent authority to establish a link or nexus between the convict's or detenu's money and the property to be forfeited. The burden of proof lies on the person affected to show that the property is not illegally acquired. The Court emphasized that imposing such a requirement would defeat the purpose of SAFEMA.

4. Compliance with Procedural Requirements under Section 6(1) of SAFEMA:
The appellant contended that the notice issued under Section 6(1) did not comply with the requirement of establishing a link or nexus. The Supreme Court examined the notice and found that it clearly recorded the reasons for belief that the property was illegally acquired. The notice detailed the lack of evidence for the appellant's claimed sources of income and the circumstances leading to the belief that the property was acquired with illegally obtained money. The Court concluded that the notice met the statutory requirements.

Conclusion:
The Supreme Court dismissed the appeal, finding no merit in the appellant's arguments. The Court upheld the findings of the competent authority and the appellate authority regarding the forfeiture of the property at Bapu Nagar, Jaipur, and affirmed that the procedural requirements under SAFEMA were duly complied with.