TMI Blog2010 (7) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... t Authority, Mumbai under Sections 7 and 19 of the Smugglers Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 ( SAFEMA‟). 5a. The Petitioner states that he started his proprietary concern M/s. Calcutta Art Jewellers on 1st January 1982. He states that he purchased a residential flat being Flat No. 7, 3rd Floor, Tirath Apartments, New Andheri Co-operative Society, Andheri (West) for a consideration of ₹ 5.05 lakhs. He states that on 16th January 1986 he sold a flat at Jasmine Apartments, 31 SV Road, Andheri (West) for ₹ 5 lakhs. 6. On 3rd June 1991 a detention order was passed against the Petitioner under Section 3(1) of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 ( COFEPOSA‟). It is stated that on the report dated 5th August 1996 of the Advisory Board this detention order was revoked. A show cause notice is stated to have been issued to the Petitioner and his wife on 12th September 1995 under Section 6 SAFEMA. After response to the show cause notice, on 12th July 1995 a consequential order was passed by the Competent Authority under the SAFEMA forfeiting the properties listed out in the show caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 at Allahabad Bank, Juhu Vile Parle Branch, Mumbai. (g) Contents of locker No. 206 standing in the name of Mrs. Anjana Mahesh Nanda (Zaveri) and Shri Mahesh Kantilal Nanda (Zaveri) at Allahabad Bank, Juhu Vile Parle Branch, Mumbai. (h) Contents of locker No. 933, Chira Bazar Branch of Bank of Baroda, Mumbai in the name of Shri Mahesh Kantilal Zaveri Smt. Anjana Mahesh Zaveri. (i) Amount of ₹ 10,271.62 lying in S.B. A/c No. 10/4948 in the name of Anjana M. Nanda (Zaveri) at Allahabad Bank, Juhu Vile Parle Branch, Mumbai. (j) Residential flat No. 7-B, 3rd floor, Tirath Apartments, New Andheri, C.H.S. Limited, Lallubhai Park, Andheri (W), Mumbai in the name of Shri Mahesh Kantilal Zaveri. (k) Right, title and interest in business known as M/s A.M. Zaveri Co. and M/s. Italian Chain Mfg. Co. with premises, goodwill, machinery, furniture and fittings and other moveable assets in the premises situated at 188-A, Bhimraowadi, Thakurdwar, Girgaum, Mumbai - 400 002. 9. The notice stated that the Competent Authority had reason to believe that the funds for acquiring these assets have come from illegal sources of the AP No. 1 (the Petitioner herein) who has been i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the investments made in the firms. Further, the Enforcement Directorate proved that the Petitioner used the firms as fronts for illegal activities. (vi)The contentions of SBI were also rejected and it was held that the proceedings under SAFEMA have an overriding effect and the deposits held by the bank were forfeitable to the Central Government free from all encumbrances. 12. Consequently, the Competent Authority directed two bank lockers mentioned at serial Nos. (g) and (h) of the list of properties to be opened in the presence of the affected persons ( APs‟) and in case of their failure to remain present, the lockers could be broken open and the contents taken over under a panchnama. The APs were directed to hand over the properties at (j) and (k) i.e. Residential Flat No. 7-B, 3rd floor, Tirath Apartments, New Andheri Co-operative Society, Andheri (West), Mumbai as well as the premises, goodwill, machinery, furniture and fittings and other moveable properties, and the business of M/s. A.M. Zaveri Co. and M/s. Italian Chain Mfg. Co. at Girgaum, Mumbai within a period of thirty days. 13. The appeal filed by the Petitioner against the above order was dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind bars in a customs case and till the case concluded in 1987, M/s Calcutta Art Jewellers did not undertake any substantial business. (viii) The forfeiture of the lockers was provisional and only after they were opened would the Competent Authority be able to ascertain whether they contained any property which required forfeiture. 14. The present writ petition was filed by the Petitioner challenging the order of the Appellate Authority. While notices were directed to be issued on 29 th September 2000, this Court directed that the Petitioner would not, in the meanwhile, be dispossessed from the residential premises, i.e., from the flat at Tirath Apartments. 15. One of the grounds raised in the writ petition was that the detention order dated 5th October 1995, which had been unsuccessfully challenged by the Petitioner before the Bombay High Court, was pending consideration in the Supreme Court, with leave having been granted in SLP (Cri) No. 974 of 1998 (subsequently registered as Crl. Appeal No. 354 of 1998) by an order dated 20th March 1998 and therefore, the show cause notice as well as the final order could not be said to have been validly made. It was submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to repay the loan. Therefore, in 2005 the UCO issued a notice under Section 13(2) of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ( SARFAESI Act‟) calling upon the Petitioner to repay the loan within sixty days failing which the UCO Bank would enforce the mortgage and put the said flat to auction to recover the loan amount. 18. The applicants further stated that the Petitioner had also agreed to sell the flat to them and had executed an agreement and handed over the possession of the said flat to the applicants in the year 2008. This was followed by initiation of proceedings under SARFAESI Act by the UCO Bank by filing an application under Section 17 of the SARFAESI Act before the Debt Recovery Tribunal-I, Mumbai ( DRT‟). The applicants apparently purchased the flat by making payment of ₹ 1,30,36,436/- pursuant to the order passed by the DRT. It is stated that the entire consideration was paid to the UCO Bank which in turn issued a sale certificate in favour of the applicants. It appears that the sale certificate has been issued upon the said purchasers paying the stamp duty. 19. Obviously all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the applicants in CM Application No. 16131 of 2009. The above conduct of the Petitioner should by itself disentitle him from any relief in these proceedings. 23. Nevertheless, this Court shall proceed to examine the merits of the contentions raised by the Petitioner challenging the impugned orders of the Competent Authority and the Appellate Tribunal under the SAFEMA. The Petitioner has sought to place reliance upon decisions in Attorney General v. Amratlal Prajivandas 1994 (5) SCC 54, Shanti Devi v. Union of India 1998 (73) DLT 477, Ashok Kumar v. Competent Authority 2001 (3) AD Delhi 121 and Ghanshyam Dass Vaswani v. Union of India 167 (2010) DLT 434. It is sought to be contended that the earlier forfeiture order having been set aside by the Appellate Tribunal, there could not be a fresh round of forfeiture on the same facts. Secondly, it is contended that the Respondent was not able to establish any link between the alleged illegal activities and the holding of the property by the Petitioner. It is claimed that all the payments for the purpose of purchase of the flat No. 7-B, 3rd Floor, Tirath Apartments, Andheri (West) were made through the proprietorship concern M/s. Cal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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