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2023 (3) TMI 1074 - SC - FEMAForfeiture of illegally acquired properties of smugglers and foreign exchange manipulators - order passed by the competent authority under Section 7 read with 19(1) of the Smugglers and Foreign Exchange Manipulators(Forfeiture of Property) Act - partners of the first appellant, namely, N.A. Yusuf, was ordered to be detained by Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974(hereinafter being referred to as “COFEPOSA”) - HELD THAT:- From the evidence which came on record, it could be gathered that out of the investment made by the partners(Appellant nos. 2 to 5) to the tune of Rs.10.20 lakhs, N.A. Yusuf contributed Rs.5 lakhs and Appellant no.2(P.M. Saheeda) and her children have contributed to the tune of Rs.5.2 lakhs each but neither N.A. Yusuf has justified any source from where his capital contribution was made nor the explanation was 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, even if the value of the land is taken only at Rs.33,000/, the total value of the land and building will work out at Rs.25,20,000/and as such, it was of the view that major part of the investment remained unexplained. No error being committed in the finding returned by the High Court which may call for our interference. Even before this Court, there is no material that has been placed by Appellant no.2 (P.M. Saheeda) in rebuttal which may even prima facie justify the sources of fund available at her command for acquisition of the land in question to the tune of Rs.33,000/in the year 1969. In the absence of proper explanation as to the source of acquisition and as majority of investment remains unexplained, the authority disbelieved the version of Appellant no. 2(P.M. Saheeda) as no proof was placed on record of gifts from her marriage. Even the accounts were not maintained in respect of the cost of construction of the building, in absence whereof, the authority has not committed any manifest error in forfeiting the property in exercise of power under Section 7 of Act 1976. Appeal is without substance and accordingly dismissed
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