TMI Blog2017 (8) TMI 671X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by forfeiture of property and vesting thereof in the Central Government. Such forfeiture will extinguish the rights of the person to whom the Act applies in the present case Krishna Budha Gawde, who was the owner of the property in question or his relative or associate having nexus with him in relation to the said property. However, we do not express any opinion whether the appellants are the bona fide tenants and had no nexus with the acquisition of the property by the person to whom the Act applied as claimed by them. This question needs to be determined independently by the competent authority as defined in Section 3(b) of the Act. Accordingly, we allow this appeal, set aside the order of the High Court and remit the matter to the competent authority for passing an appropriate order in accordance with law. The parties are directed to appear before the competent authority for further proceedings on 9th October, 2017. - Criminal Appeal No. 34 of 2009 - - - Dated:- 17-8-2017 - Adarsh Kumar Goel And Uday Umesh Lalit, JJ. For the Appellant : Mr. Pratap Venugopal, Adv. Ms. Surokha Raman, Adv. Ms. Niharika, Adv. Ms. Kanika Kaliyarasan, Adv. for K J John And Co, AOR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings under SAFEMA and COFEPOSA against the landlord. They informed the competent authority about this. Since they apprehended coercive steps against them, they are entitled to be granted protection. 5. The writ petition was contested by submitting that since the properties of Krishna Budha Gawde stood forfeited and vested in the Central Government free from all encumbrances, the alleged tenancy rights did not survive and the competent authority was entitled to take possession under Section 19 of SAFEMA. 6. The High Court dismissed the writ petition holding that the tenancy did not survive in view of Section 7(3) of SAFEMA. 7. We have heard learned counsel for the parties. 8. The contention raised on behalf of the appellants is that forfeiture contemplated under Section 7 of the Act is only of illegally acquired property as defined under Section 3(1)(c) of SAFEMA i.e. property acquired by the person to whom the Act applies which is defined under Section 2(2) of SAFEMA. The Act applied to a person against whom the order of detention has been passed or a person who is a relative or associate of such person or holder of the property which was previously held by such per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion would vest in the Central Government subject to such encumbrances and leasehold interests as are subsisting thereon except for such of them as are agreed to be discharged by the vendor before the sale is completed. If under the relevant agreement to sell the property is agreed to be sold free of all encumbrances or certain encumbrances it would vest in the Central Government free of such encumbrances. Similarly, sub-section (2) of Section 269-UE will be read down so that if the holder of an encumbrance or a lessee is in possession of the property and under the agreement to sell the property it is not provided that the sale would be free of such encumbrances or leasehold interests, the encumbrance holder or the lessee who is in possession will not be obliged to deliver the possession of the property to the appropriate authority or any person authorised by it and the provisions of sub-section (3) also would not apply to such persons. If the provisions of Section 269-UE are read down in the manner indicated above then, in our opinion, the provisions of sub-section (6) of that section do not present any difficulty because the vesting in the Central Government would be subject to su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n clause (a) or clause (b) (which speak of a convict or a detenu). Similarly, clause (d) speaks of associates of such convict or detenu. If we look to Explanation (3) which specifies who the associates referred to in clause (d) are, the matter becomes clearer. Associates means - (i) any individual who had been or is residing in the residential premises (including outhouses) of such person [ such person refers to the convict or detenu, as the case may be, referred to in clause (a) or clause (b)]; (ii) any individual who had been or is managing the affairs or keeping the accounts of such convict/detenu; (iii) any association of persons, body of individuals, partnership firm or private company of which such convict/detenu 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 of persons, body of individuals, partnership firm or private company; (v) any person who had been or is managing the affairs or keeping the acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actions 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. So far as the holders (not being relatives and associates) mentioned in Section 2(2)(e) are concerned, they are dealt with on a separate footing. If such person proves that he is a transferee in good faith for consideration, his property - even though purchased from a convict/detenu - is not liable to be forfeited. It is equally necessary to reiterate that the burden of establishing that the properties mentioned in the show-cause notice issued under Section 6, and which are held on that date by a relative or an associate of the convict/detenu, are not the illegally acquired properties of the convict/detenu, lies upon such relative/associate. He must establish that the said property has not been acquired with the mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or detained in the manner contemplated under Section 2 of the Act and if such a person claims to be having no nexus to the person to whom the Act applied, his rights will not stand vested in the Central Government, though he may be liable to be proceeded against the Public Premises Eviction Act 12 . 19. In Aslam (supra), following the judgments of this Court in Amratlal (supra) and Fatima (supra) it was held that for forfeiture of property under Chapter V-A of the Narcotic Drugs and Psychotropic Substances Act, 1985, a direct nexus/link was necessary between the properties sought to be forfeited and its illegal acquisition. 20. In the present case, it is undisputed that only adjudication which has taken place by the competent authority is that the property was owned by the person to whom the Act applied i.e. against whom the order of detention had been confirmed. The rights of the appellants, who claim to be bona fide tenants even prior to purchase of the property by the person to whom the Act applied, have not been adjudicated upon on the assumption that their rights will stand automatically terminated. In view of law laid down by this Court, noticed above, we are of the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (vi) spouse of a person referred to in clause (ii), clause (iii) clause (iv) or clause (v); (vii) any lineal descendant of a person referred to in clause (ii) or clause (iii). Explanation 3.-For the purposes of clause (d), associate , in relation 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 an association of persons, body ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es (i) to (iii) or the income or earnings from such property; and includes- (A) any property held by such person which would have been, in relation to any previous holder thereof, illegally acquired property under this clause if such previous holder had not ceased to hold it, unless such person or any other person who held the property at any time after such previous holder or, where there are two or more such previous holders, the last of such previous holders is or was a transferee in good faith for adequate consideration; (B) any property acquired by such person, whether before or after the commencement of this Act, for a consideration, or by any means, wholly or partly traceable to any property falling under item (A), or the income or earnings therefrom; 11 ** That this was the object of the Act is evident from para 4 of the preamble which states: And whereas such persons have in many cases been holding the properties acquired by them through such gains in the names of their relatives associates and confidants. We are not saying that the preamble can be utilized for restricting the scope of the Act, we are only referring to it to ascertai ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
