TMI Blog2017 (11) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... notices issued under SAFEMA. The rationale for that notice was a valid COFEPOSA detention (in his case, its legality was undisputable, because he was denied the liberty of challenging it). The other rationale was suspicion, based on rejection of the income tax authorities’ orders. The importance of establishing a link- howsoever rudimentary, but real nevertheless, between an individual and some smuggling activities, can be the only basis of a valid “reason to believe” under Section 6(1) of the Act. Otherwise, there is a danger of SAFEMA or any other authority concluding that since the subject is unable to establish the legitimacy of his source of income, it must be on account of smuggling. In other words, suspicion is elevated into certainty or a finding. Clearly, that occurred in the facts of this case. The court is therefore of the opinion that the notices initiating the proceedings, in these cases were vitiated and unsustainable. The Union’s argument regarding Kamla Vati’s acquisition of property is unpersuasive. The Benami Properties (Prohibition) Act, 1988 was not in existence, when the notice was issued; in any case, even if it were assumed that the properties were acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the scheduled properties, and also to show cause as to why they should not be declared as illegally procured properties and forfeited under the Act. The notice was with respect to the following properties: Sl. No. Description of the property Name of the present holder of property 1. Plot Nos.35 to 38, Chandrauli, Delhi Shri Piara Lal 2. Plot No.13/1, 14/15, bearing Khasra No.21-24 in village Karawal Nagar, Ilaqa Shadara, Delhi DO 3. Plot No.2, B-Block, Laxmi Industrial Enclave, V, Gharota, Pargna Loni, Tehsil Ghaziabad, Meerut DO 4. 1/2 share in plots bearing Khasra Nos.13 to 17 in Karawal Nagar, Ilaqa Shahdra, Delhi DO 5. 110 Tolas gold ornaments DO 3. In terms of Section 6, SAFEMA, the competent authority has to record reasons to believe that the properties for which notices are issued are illegally acquired properties. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment, Piara Lal has surrendered the same for assessment. In this year an addition has also been made on account of inadequate marriage expenses and inadequate household expenses. It will thus be abundantly clear that although Piara Lal's various investments have been considered in the course of assessment proceedings, the source of these investments has at no stage, been proved. Since the source of investment in properties listed at S. No.1 to 4 of para 3, has not been explained and proved, those properties fall squarely within the purview of sec. 3(1)(c)(iii) of the SAFEMA. 4. It was also stated that the said properties were acquired either wholly, or partly out of, or through earnings and assets, the source of which was unproved and which was not 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 is thus hit by the provisions of section 3(1)(c)(iii) of SAFEMA . On the basis of these observations, the competent authority opined that properties held by Piare lal were illegally acquired properties within the meaning of Section 3 (1) (c) of SAFEMA and that notice under Section 6(1) had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the question of applying the rule of evidence enacted by section 8 of SAFEMA, casting the burden of proof on the person affected, shall come into play only on some connecting link or nexus being established or traced between the holding of the property or assets by the person proceeded against, and illegal activity of the detenue/convict. 15. The reasons to believe as recorded in the present case by the competent authority undoubtedly raise a doubt about the source of funds wherefrom the aforesaid properties were acquired at the relevant time. However, they do not go on to state that there was a nexus between the income derived from the alleged activity of smuggling and the scheduled properties acquired by the detenue, and the said reasons to believe do not show as to how a nexus is sought to be established between the income allegedly derived from the illegal activity of smuggling, and the acquisition of the said properties. 16. In the light of the aforesaid discussion, since the reasons to believe , as recorded by the competent authority appear to be wholly insufficient, the notice issued under section 6(1) of SAFEMA cannot be said to have been issued vali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluded that the persons shall be covered under section 2 (2)(c) of SAFEMA and the competent authority s order for forfeiture of the property was therefore valid. Counsel lastly relied on Sh. Zahid Pervaz v Union of India ILR 2012 (1) Del 566 , where it was held as follows: The impugned orders have to be tested on the basis of the materials produced before the authorities who have passed these orders. The said plea is clearly an afterthought and is an attempt to improve his case by petitioner. From the known source of income of the petitioner or his father, the aforesaid properties have not been established to have been acquired. It has not even been argued that the competent authority did not have, or did not record the reasons for issuance of the show cause notice. 15. On the other hand, the principle of law contained in the aforesaid observations made by this Court in Shahid Parvez (supra), with due respect, appears to be per incuriam. I may refer to the provision contained in Section 68J of the NDPS Act which provides that in any proceedings under this Chapter, the burden of proving that any property under Section 68H is not illegally acquired property shall be on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur opinion, the facts of the case are covered by the decision of this Court in Fatima Mohd. Amin v Union of India (2003) 7 SCC 436 . In the present case the contents of the notice, even if taken on face value, do not disclose any sufficient reason warranting the impugned action against the appellant as, in our opinion, the condition precedent for exercising the power under the Act did not exist. Hence, the impugned orders cannot be sustained. 11. Section 6 (1) of SAFEMA provides: Section 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 on his behalf, his known sources of income, earnings or assets, any other information or material available to it as a result of action taken under section 18 or otherwise, the competent authority has reason to believe (the reasons for such belief to be recorded in writing) that all or any of such properties are illegally acquired properties, it may serve a notice upon 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be preferred over the decisions of the Supreme Court. 13. In this case, the entire basis of the notice appears to be a detention, the challenge to which was declined. Here, it is important to remember that the detenue s access to Article 226 of the Constitution of India was doubted; nine High Courts held that access existed. The Supreme Court, however overturned their rulings in ADM Jabalpur v Shivakant Shukla AIR 1976 SC 1207 , in its majority judgment. This meant that even petitions challenging validity of detention orders, on the ground that no valid rationale for detention existed under the COFEPOSA could not be entertained. The internal emergency that existed at the time, was lifted; liberties that were taken away or suspended, were restored. And yet, late Piare Lal s troubles were far from over. The wheels of bureaucracy grind- inexorably. For Piare Lal (supra) there appeared to be no respite or exit, from the black hole which he entered into, on account of the notices issued under SAFEMA. The rationale for that notice was a valid COFEPOSA detention (in his case, its legality was undisputable, because he was denied the liberty of challenging it). The other rationale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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