CORAMTHE HONOURABLE MR v. A.Sowkath Ali2.Surya Beevi3.The Chairman Appellate Tribunal for Forfeited Property

O R D E RPrologue:-"Among the truly dangerous government powers is thefederal asset forfeiture law, which allows the government toseize and basically keep any property supposedly used in thecommission of a crime. Under this law your property is chargedwith the offense, which makes it a civil action rather than acriminal case. Even if your are never charged with a crime,or are charged and acquitted, it can take years and cost youa fortune to get back your own property. But if your areconvicted of the crime the government is entitled to sellyour property, with the proceeds divided among all theagencies participating in the original seizure. It's anoutrageous program. The L.A.Sheriff's Department, forexample, depended on the money raised by selling assetsseized and forfeited in drug cases to supplement itsinadequate yearly budget. (p.231)Many white people watch quietly as law enforcement officerstrample all over the rights of minorities under the guise ofcrime prevention. And a lot of them are sympathetic, too. Theyhonestly feel sorry for the victims. But they watch from avery safe place, feeling sorry for the victims, but believingas long as they themselves remain law-abiding citizens itcant' happen to them.Donald Scott believed that, too." (p.236)- A Lawyer's Life - Johnnie Cochran - ST.Martin's Press, New York - 2002 The said observations were made by a leading civil rights lawyer ofUSA in the context of the American law allowing forfeiture ofproperties of narcotic offenders. The indignation expressedtherein will set the tone for this order and hence those statementswere quoted.2. In this case, the question is whether in taking over theproperty of the contesting respondents, the procedure establishedby law has been followed by the writ petitioner.3. This writ petition came to be posted before this Court onbeing specially ordered by the Hon'ble Chief Justice vide orderdated 04.08.2011.4. The petitioner is the competent authority and theadministrator of Smugglers and Foreign Exchange Manipulators(Forfeiture of Property) Act, 1976 (for short SAFEMA, 1976). Inthis writ petition, the petitioner challenges an order passed bythe Appellate Tribunal For Forfeited Property, New Delhi, dated06.09.2010. https://hcservices.ecourts.gov.in/hcservices/

5. By the impugned order, the Tribunal which heard the appealfiled by the first and second respondent in FPA No.12/MDS/2009 andFPA No.13/MDS/2009 set aside the order of the competent authoritydated 08.06.2009. 6. The writ petition was admitted on 08.02.2011. Pending thewrit petition, an interim stay was granted for a period of fourweeks. Subsequently, it was extended till 29.04.2011.7. Heard the arguments of Mr.M.L.Ramesh, learned Senior Panelcounsel for the petitioner, Mr.B.Kumar, learned Senior Counselappearing for Mr.M.A.Abdul Huck, learned counsel for respondents 1and 2.8. The first and second respondents are husband and wife. Thefirst respondent is the resident of Triplicane, Chennai -5. He wasdetained under Conservation of Foreign Exchange and Prevention ofSmuggling Activities Act, 1974 (for short COFEPOSA Act) on23.12.1999. Subsequent to his detention, proceedings wereinitiated under SAFEMA, 1976. According to the petitioner, theinvestigation revealed that the first respondent was engaged in theactivities of smuggling and illegal export of foreign exchangethrough carriers. The first respondent had himself admitted thisfact in a statement recorded under Section 108 of the Customs Act.These proceedings are deemed to be judicial proceedings. Accordingto the petitioner, the first respondent was apprehended by thecustoms authorities while attempting to export out of India foreigncurrencies to the tune of Rs.72,62,570/-, the same was seized bythe authorities. The first respondent admitted in his statementthat the foreign currencies seized belonged to him. Thesestatements are sufficient reason to believe that he had no legalsource of income and he was fully involved in smuggling of currencyand it was his source of earnings. Hence, it was believed that theproperty in his name is a tainted property acquired through illegalincome. Therefore, the competent authority by exercise of powerunder Section 6(1) of the SAFEMA, 1976 issued a notice to thefirst respondent on 15.09.2004 in respect of the property held inhis name. He was asked to prove that his properties were acquiredthrough legal sources of income. 9. However, detention order passed against the firstrespondent under COFEPOSA was set aside by the Supreme Court. Butthe proceedings under SAFEMA, 1976 was continued as he wasconvicted under the Customs Act, 1962 on 18.06.2003 by the JudicialMagistrate, Alandur. Therefore, he continued to be a person coveredby SAFEMA, 1976. Despite sufficient opportunities given, the firstrespondent could not prove his legal source of income, therefore byan order dated 08.06.2009 his properties were forfeited. 10. It was also further stated by the petitioner that oninvestigation against the first respondent, it was found that hegave Rs.7 lakhs to his wife, who is the second respondent and she https://hcservices.ecourts.gov.in/hcservices/ had constructed a house in her name at Tiruchirapalli. Therefore, anotice under Section 6(1) of the SAFEMA, 1976 was served on her on24.08.2007. she was given necessary opportunity in conformity withthe principles of natural justice. As it was found that theproperty acquired by her was directly attributable to the income ofthe first respondent which was earned out of illegal means, theproperty was also forfeited by a common order dated 08.06.2009which also covered the properties of the first respondent.11. Both first and second respondents preferred appeals beforethe Appellate Tribunal constituted under Section 12 of the SAFEMA,1976. Their appeals were numbered as FPA No.12/MDS/2009 andFPA.No.13/MDS/2009. The Tribunal after notice to the petitionerviz., the Competent Authority passed a common order dated06.09.2010 and allowed the appeal. Before passing the order, theTribunal heard the appeal in camp sitting at Kochi (Kerala State)on 31.08.2010. This order became the subject matter of challengeby the competent authority as noted already. 12. The appellate Tribunal found that the investigation wastainted. The competent authority subsequent to the notice given tofirst and second respondents browsed the internet and got somematerials and without notice to the first and second respondentsrelied upon the same, thereby violating the principles of naturaljustice. The Tribunal also observed that if the law made inSingapore was violated by the first respondent, it is for theauthorities at Singapore to take action. It also found that therewas no allegation that the first respondent, as an NRI (NonResident Indian) had violated any of the Indian laws applicable tohim while earning his income. It found that the income earned bythe first respondent cannot be said to be illegally earned. Theearnings of the first respondent at Singapore cannot be a subjectmatter of which the Parliament can enact law. The first respondenthad clearly stated that he had a full fledged Travel Agency atSingapore and earned income as a consultancy commission for foreignclient. He was not charge sheeted by the Government of Singaporefor earning money at Singapore or for bringing silver and gold toIndia or selling the same in India under the Customs Act. It cannotbe said to be contravening the Customs Act or Foreign ExchangeRegulation Act (FERA) or Foreign Exchange Maintenance Act (FEMA).He brought to India gold and silver after paying duty. Selling ofsilver and gold and earnings derived from them were shown in theIncome Tax Returns. He has legally explained the source of income.Merely because two persons who were in possession of ForeignCurrency mentions the name of the first respondent during the year1999 and he was convicted on account of the same was not a groundto say that the acquisition of the property in the year 1995 wasillegal acquisition of properties. 13. The Tribunal also referred to a Division Benchjudgment of the Kerala High Court in W.A.No.1645 of 2007(E) dated24.02.2009 [Kannanchery Abdu v. The Competent Authority under https://hcservices.ecourts.gov.in/hcservices/ SAFEMA and others], in support of their conclusions. In that case,the Division Bench presided by Acting Chief Justice J.B.Koshy,incidentally became the Chairman of the Appellate Tribunal.Therefore, he quoted from his own judgment, delivered as an HighCourt Judge. In that case, it was held that a person who earnsmoney in Dubai cannot be a subject matter of investigation by theIndian authorities. Income earned therein cannot be shown asillegally acquired income in India. 14. Before proceeding to deal with the matter on merits, it isnecessary to deal with the preliminary objection raised byMr.B.Kumar, learned Senior Counsel appearing for respondents 1 and2 on behalf of Mr.A.Abdul Huck, learned counsel, regarding themaintainability of the writ petition at the instance of theCompetent Authority. 15. It was contended by the learned Senior Counsel that thecompetent authority viz., the writ petitioner is constituted underSection 5 of the SAFEMA, 1976. After forfeiting the properties ofa person, who has acquired the properties through illegal source ofincome is notified to have the jurisdiction of a Civil Court interms of Section 15 of the SAFEMA, 1976. An order passed by him isliable to be challenged before the Appellate Tribunal for ForfeitedProperties (ATFP). An order passed under Section 7 regardingforfeiture can be challenged before the Tribunal constituted underSection 12. Under Section 12, it is only a person aggrieved by theorder of the Competent Authority can file an appeal and theAppellate Tribunal will regulate its own proceeding. Under Section12(5), the power of the Tribunal is set out, which is as follows:-"12(5) On receipt of an appeal under sub-section(4), the Appellate Tribunal may, after giving anopportunity to the appellant to be heard, if he sodesires, and after making such further enquiry as itdeems fit, modify or set aside the order appealedagainst."16. However, under Section 26, the Central Government can makerules to carry out the provisions of the Act. Under Section 26(2)specific power have been given to the Central Government to frameRules including the Rule relating to exercise of power by theTribunal in terms of Section 15(f) of the SAFEMA, 1976. 17. The Central Government has framed Rules known as Smugglersand Foreign Exchange Manipulators (Appellate Tribunal for ForfeitedProperty) Rules, 1977. Rule 7 reads as follows:-"7. Procedure after registration of appeal. -(1)After an appeal is registered, one copy of thememorandum of appeal and annexures thereto shall beserved as soon as possible on the competentauthority either by registered post, acknowledgmentdue, or by delivering or tendering them to the saidauthority through messenger. https://hcservices.ecourts.gov.in/hcservices/ (2) The parties shall be informed of the date andplace of hearing of the appeal either by registeredpost, acknowledgment due, or by notice served onthem through messenger:Provided that where the parties are present beforethe Tribunal, it may inform them the date and placeof hearing of the appeal.(3) Any petition for summoning witnesses ordocuments, or the like, filed by a party may beheard, if necessary, after giving notice to theother party.(4) Every requisition, direction, letter,authorisation, or written notice to be issued by theTribunal shall be signed by the Registrar or anyother officer authorised by the Chairman in thisbehalf and shall be sent by registered post,acknowledgment due.(Emphasis added)18. In this context, Mr.M.L.Ramesh, learned Senior Counselrelied on a decision of this Court reported in CDJ 2011 MHC 3966[Provident Fund Organisation, Coimbatore and others v. EmployeesProvident Fund Appellate Tribunal (Ministry of Labour andEmployment, Government of India), New Delhi and others] andcontended that the power of the Competent Authority is similar tothat of the Provident Fund authorities and hence, the writ petitionis maintainable. He referred to the following passages found inparagraphs 8,9,16 to 18:-"8. Per contra, various learned counsels appearingfor the employers contended that the APFC had nolocus standi to file writ petitions challenging theorders passed by the PF Tribunal. The authoritiesare quasi judicial authorities. Therefore, havingdetermined the liability of the employers and whentheir orders are challenged before the judicialTribunal, viz., EPF Tribunal, then any determinationby the Tribunal is binding on the parties. Hence,the authority cannot file such writ petitionschallenging the orders of the Tribunal.9. In this context, reference was made to anunreported judgment of this Court in RegionalProvident Fund Commissoner, Tirunelveli v.M/s.Prabha Beverages Private Ltd., Marthandam(W.P.No.3462 of 1999) dated 22.10.2008. Reliance wasplaced upon paragraphs 7 to 9, which reads asfollows:- https://hcservices.ecourts.gov.in/hcservices/ "7. In more or less similar circumstances,under the Cinematograph Act, the SupremeCourt vide its decision in Union of India-vs- K.M.Sankarappa reported in (2001) 1 SCC582 held in para 7, which is as follows:-"7. ........The executive cannot sit in anappeal or review or revise a judicial order.The Appellate Tribunal consisting of expertsdecides matters quasi-judicially. ASecretary and/or Minister cannot sit inappeal or revision over those decisions. Atthe highest, the Government may apply to theTribunal itself for a review, ifcircumstances so warrant. But the Governmentwould be bound by the ultimate decision ofthe Tribunal". (emphasis added)8. When the Central Board of FilmCertification came up before this Courtchallenging the order of the Tribunal, aDivision Bench of this Court, to which I am(K.Chandru,J.) a party, had an occasion toconsider the locus standi of the CentralBoard of Film Certification in Central Boardof Film Certification -vs- Yadavalaya Films((2007) 2 MLJ 604). In para 22, it wasobserved as follows:- "22. In our opinion, it is doubtful whetherthese appeals are maintainable, in view ofthe decision of the Supreme Court in Unionof India -vs- K.M.Shankarappa, AIR 2000 SC3678: (2001) 1 SCC 582: (2001) 1 MLJ 146(SC)."9.In the present case, except that thepetitioner was very sensitive about his ownorder being reversed by the Tribunal, thereis no case for them to come to this Courtchallenging the order of the Tribunal, whichhad given sound reasoning for reversing theorder passed by the first respondent."16. Taking note of the first objection by theemployer regarding the maintainability of the writpetitions, this Court is of the view that the writpetitions cannot be rejected on the ground of locusstandi of the APFC. Taking note of the peculiarposition that the PF authorities are to play underthe PF Act, the challenge by the authorities of theorder of the Tribunal cannot be rejected on theground of want of jurisdiction. It must be notedthat the authorities are playing multifarious role https://hcservices.ecourts.gov.in/hcservices/ under the provisions of the PF Act includinginvestigation, enforcement, quasi judicialdetermination of the rights of the parties,prosecution of the erring employers as well assecuring the rights of workmen, who also contributePF subscriptions.17. The Bombay High Court in the judgment inNirmitee Holidays's case (cited supra) proceeded onthe basis that the quasi judicial authorities arenot expected to defend their proceedings beforeappellate forum and hence they cannot challenge theorders of the Tribunal cannot be accepted. UnderSection 7K(2) of the PF Act, the Act provides forthe authority to authorize one or more legalpractitioners to present its case with reference toany appeal before the Tribunal. Further underSection 7L of the PF Act, the Tribunal is expectedto give opportunities to the parties to the appealand to pass such orders as it may think fit. UnderSection 7L(3) of the Act, the Tribunal is mandatedto give copies of its orders to both parties to theappeal. Though under Section 7L(4) of the PF Act, itis stated that any order made by the Tribunalfinally disposing of an appeal shall not bequestioned in any Court of law, the same has norelevance to a writ petition filed under Article 226of the constitution. In the unreported decision inM/s.Prabha Beverages's Case (cited supra), thisCourt had merely expressed doubts about themaintainability of the writ petition and it did notgive any categorical finding on the said issue. Itwas only observed that without even a prima faciecase in their favour, the APFC ought not have filedthat writ petition. Hence, that judgment is not anauthority to decide the issue involved.18. Since the authorities were allowed to berepresented before the Tribunal even by engaging alegal practitioner and they were also heard duringthe proceedings by the Tribunal and that order wasdirected to be issued to them, certainly they havelocus standi to challenge the proceedings of theTribunal before the High Court. The finality that isattached to the Tribunal's order under Section 7L(4)of the PF Act will not apply to the proceedingsinitiated under Article 226. It must also be notedthat that the PF authorities are holding the amountcollecting from the employee and employer in Trustand therefore, as Trustees, they are bound tomaintain the funds of the Trust with greater vigil https://hcservices.ecourts.gov.in/hcservices/ and for any loss caused to the funds of the Trust asTrustees, they may be held responsible. Therefore,if any order of the Tribunal is manifestly erroneousor passed without jurisdiction, the authority canchallenge the same in a writ petition under Article226 of the Constitution."19. Per contra, Mr.B.Kumar, learned Senior Counsel referred tothe judgment of this Court reported in AIR 1981 Madras 80 [Directorof Enforcement, Madras v. Rama Arangannal and another] to contendthat the order of adjudication passed by the Director ofEnforcement cannot be challenged by him. In such cases, it is onlythe Central Government which can be an aggrieved party and not theDirector of Enforcement. 20. The learned Senior Counsel submitted that the said casecame to be referred to and approved by the Supreme Court videjudgment reported in (2007) 8 SCC 254 [Mohtesham Mohd. Ismail v.Spl. Director, Enforcement Directorate] and therefore contendedthat the Competent Authority has no locus standi to file a writpetition. He placed reliance on the following passages found inparagraphs 16 to 18:-"16. An adjudicating authority exercises a quasi-judicial power and discharges judicial functions.When its order had been set aside by the Board,ordinarily in absence of any power to prefer anappeal, it could not do so. The reasonings of theHigh Court that he had general power, in ouropinion, is fallacious. For the purpose ofexercising the functions of the Central Government,the officer concerned must be specificallyauthorised. Only when an officer is so specificallyauthorised, he can act on behalf of the CentralGovernment and not otherwise. Only because anofficer has been appointed for the purpose of actingin terms of the provisions of the Act, the samewould not by itself entitle an officer to dischargeall or any of the functions of the CentralGovernment. Even ordinarily a quasi-judicialauthority cannot prefer an appeal being aggrieved byand dissatisfied with the judgment of the appellateauthority whereby and whereunder its judgment hasbeen set aside. An adjudicating authority, althoughan officer of the Central Government, should act asan impartial tribunal. An adjudicating authority,therefore, in absence of any power conferred upon itin this behalf by the Central Government, could notprefer any appeal against the order passed by theAppellate Board.17. The Madras High Court in Rama Arangannal1opined: (AIR p. 81, para 4) https://hcservices.ecourts.gov.in/hcservices/ "4. On the question as to the maintainability of theappeal, it is seen that the Explanation to Section54 of the Foreign Exchange Regulation Act, 1973treats only the Central Government as an aggrievedparty for the purpose of filing an appeal to theHigh Court in respect of orders passed by theForeign Exchange Regulation Appellate Board underthat section. Therefore, only the Central Governmentcan file and prosecute an appeal against the orderof the Appellate Board, and not any other authority.In this case, the appeal has been filed by theDirector of Enforcement, who is the initialauthority who passed the adjudication order againstthe respondents and whose order has been set asideby the Appellate Board on an appeal filed by them.Therefore, the Director of Enforcement cannot besaid to be aggrieved by the order of the AppellateBoard merely because its order of adjudication hasbeen set aside by the Appellate Board."The Punjab and Haryana High Court in Lal Chand2followed the said decision.18. The High Court was, in our considered view, notcorrect to take a contrary view."21. The scheme of FERA, as found by this Court and by theSupreme Court, more particularly, explanation to Section 54 of theFERA 1973 shows that locus standi vested with the CentralGovernment and therefore, it was held that the writ at the instanceof the Director of enforcement is not maintainable. 22. But in the present case, the Scheme of the Act as decidedin the case of the Provident Fund Organisation's case (cited supra)gives locus standi to the competent authority as a matter of rightbut also in case of any grievance, certainly it is open to him tochallenge the same. Hence, the ratio laid down by this Court in thecase of Provident Fund Organisation's case (cited supra), citedby Mr.M.L.Ramesh, learned Senior Counsel, case will apply to thecase on hand.23. The preliminary objection raised by the learned SeniorCounsel for the contesting respondents is hereby overruled.24. On the merits of the case, Mr.M.L.Ramesh learned SeniorCounsel for the Competent authority placed reliance on the judgmentof the Supreme Court reported in (2003) 7 SCC 427 [Kesar Devi v.Union of India]. He relied on the following passages found inparagraphs 10 and 12:- "10. ....The condition precedent for issuing anotice by the competent authority under Section 6(1) https://hcservices.ecourts.gov.in/hcservices/ is that he should have reason to believe that all orany of such properties are illegally acquiredproperties and the reasons for such belief have tobe recorded in writing. The language of the sectiondoes not show that there is any requirement ofmentioning any link or nexus between the convict ordetenu and the property ostensibly standing in thename of the person to whom the notice has beenissued. Section 8 of the Act which deals with theburden of proof is very important. It lays down thatin any proceedings under the Act, the burden ofproving that any property specified in the noticeserved under Section 6 is not illegally acquiredproperty, shall be on the person affected. Thecombined effect of Section 6(1) and Section 8 isthat the competent authority should have reason tobelieve (which reasons have to be recorded inwriting) that properties ostensibly standing in thename of a person to whom the Act applies areillegally acquired properties, he can issue a noticeto such a person. Thereafter, the burden of provingthat such property is not illegally acquiredproperty will be upon the person to whom notice hasbeen issued. The statutory provisions do not showthat the competent authority, in addition torecording reasons for his belief, has to furthermention any nexus or link between the convict ordetenu [as described in sub-section (2) of Section2] and the property which is sought to be forfeitedin the sense that money or consideration for thesame was provided by such convict or detenu. If afurther requirement regarding establishing any linkor nexus is imposed upon the competent authority,the provisions of Section 8 regarding burden ofproof will become otiose and the very purpose ofenacting such a section would be defeated.12. ......In those cases where the relationship is avery remote one, the competent authority may have toindicate some link or nexus while recording reasonsfor belief that the property is an illegallyacquired property. But cases where relationship isclose and direct like spouse, son or daughter orparents stand on an altogether different footing.Here no link or nexus has to be indicated in thereasons for belief between the convict or detenu andthe property, as such an inference can easily bedrawn."25. The learned Senior Counsel further referred to thejudgment of the Division Bench of the Bombay High Court reported in https://hcservices.ecourts.gov.in/hcservices/ CDJ 2006 BHC 757 [Shri Shirish Madhukar Dalvi v. AssistantCommissioner of Income Tax and Others) for contending that merelybecause an order quotes a wrong provision of law, it will notbecome invalid and the procedural provision cannot be said to bemandatory in nature. Reliance was placed on the following passagesfound in paragraphs 37 to 39:- "37. In the case of State of Kerala vs. Muniyalla,AIR 1985 SC 470, it is held that merely because anorder is purported to be made under a wrongprovision of law, it does not become invalid so longas there is some other provision of law.38. In the case of Hukumchand Mills Ltd. vs. StatePradesh of Madhya Pradesh, AIR 1964 SC 1329, theApex Court has ruled that mere mistake in theopening part of the notification in reciting thewrong source of power does not affect the validityof the amendments made.39.In the case of State Bank of Patiala v. SharmaS.K.Sharma (1996) 3 SCC 364, the Apex Court ruledthat in case of a procedural provision which is notof a mandatory character, the complaint of violationhas to be examined from the stand-point ofsubstantial compliance. The order passed inviolation of such provision can be set aside onlywhere such violation has occasioned prejudice to thesubject. It further went on to observe that evenmandatory requirement can be waived by the personconcerned, if such mandatory provision of law isconceived in his interest and not in the publicinterest. The conduct of the subject must be bornein mind while examining a compliant of non-observance of procedural rules governing suchenquiries. As a rule, all such procedural rules aredesigned to afford a full and proper opportunity tothe subject to defend himself."26. The learned Senior counsel also referred to a DivisionBench judgment of this Court reported in CDJ 2011 MHC 3203 [TheCompetent Authority v. Hameed Abdul Kader and another], whereinthis Court held that the finding of fact recorded by the CompetentAuthority cannot be interfered with. Reliance was placed on thefollowing passage found in paragraph 53:-"53. The question is whether it is open to thisCourt exercising jurisdiction under Article 226 ofthe Constitution of India to re-appreciate thematerials and arrive at a different conclusion. Thepower of judicial review is concerned only with thedecision making process. Under the guise of judicialreview, it is not permissible to consider the facts https://hcservices.ecourts.gov.in/hcservices/ once again. Limited power of judicial review doesnot enable the Court to scan the materialsconsidered by the Statutory Authorities and toarrive at an independent conclusion. Therefore, weare of the view that the learned Single Judge wasnot justified in upsetting the orders passed by theStatutory Authorities."27. Therefore, the learned Senior Counsel contended that itwas wrong on the part of the Tribunal to go into extraneous issuesand decide the matter differently and hence, the order is liable tobe interfered with.28. The decision relied on by the Senior counsel in KesarDevi's case (cited supra), which was subsequently followed by theDivision Bench in the judgment reported in CDJ 2011 MHJ 3203 (citedsupra) may not be appropriate as the judgment in Kesar Devi's casewas dissented by a subsequent judgment of the Supreme Courtreported in (2008) 14 SCC 186 [Aslam Mohammad Merchant v. CompetentAuthority], wherein the Supreme Court held as follows:- "45. Our attention, however, has been drawn to adecision of a two-Judge Bench of this Court in KesarDevi v. Union of India3 wherein Fatima Mohd. Amin2was distinguished by a Bench of this Court, interalia, opining that no nexus or link between themoney of the debt and property sought to beforfeited is required to be established under thescheme of the Act, stating: (Kesar Devi case3, SCCpp. 432 & 434, paras 10 & 13)"10. ...The condition precedent for issuing a noticeby the competent authority under Section 6(1) isthat he should have reason to believe that all orany of such properties are illegally acquiredproperties and the reasons for such belief have tobe recorded in writing. The language of the sectiondoes not show that there is any requirement ofmentioning any link or nexus between the convict ordetenu and the property ostensibly standing in thename of the person to whom the notice has beenissued...***13. We are, therefore, clearly of the opinion thatunder the scheme of the Act, there is no requirementon the part of the competent authority to mention orestablish any nexus or link between the money of theconvict or detenu and the property sought to beforfeited. In fact, if such a condition is imposed,the very purpose of enacting SAFEMA would befrustrated, as in many cases it would be almostimpossible to show that the property was purchasedor acquired from the money provided by the convict https://hcservices.ecourts.gov.in/hcservices/ or detenu. In the present case, the appellant is thewife of the detenu and she has failed to establishthat she had any income of her own to acquire thethree properties. In such circumstances, no otherinference was possible except that it was done sowith the money provided by her husband."We, with utmost respect to the learned Judges,express our inability to agree to the saidobservations. The necessity of establishing link ornexus in our opinion is writ large on the face ofthe statutory provision as would appear from thedefinition of "illegally acquired property" as alsothat of "property". The purport and object for whichthe Act was enacted point to the same effect."29. Mr.B.Kumar, learned Senior Counsel referred to theconstitutional bench of the Supreme Court reported in (1994) 5 SCC54 Attorney General for India v. Amratlal Prajivandas, andcontended that the Scheme and purpose of enactment is to forfeitthe illegally acquired properties of a convict/detenu and not toforfeit the independent properties of his relatives. The SupremeCourt held that there must be connected link between the propertiesand the convict/detenu. He relied on the following passages foundin paragraph 44:-"44. ....The idea is to forfeit the illegallyacquired properties of the convict/detenuirrespective of the fact that such properties areheld by or kept in the name of or screened in thename of any relative or associate as defined in thesaid two Explanations. The idea is not to forfeitthe independent properties of such relatives orassociates which they may have acquired illegallybut only to reach the properties of theconvict/detenu or properties traceable to him,wherever they are, ignoring all the transactionswith respect to those properties......We do not think that Parliament ever intended tosay that the properties of all the relatives andassociates, may be illegally acquired, will beforfeited just because they happen to be therelatives or associates of the convict/detenu. Thereought to be the connecting link between thoseproperties and the convict/detenu, the burden ofdisproving which, as mentioned above, is upon therelative/associate. In this view of the matter, theapprehension and contention of the petitioners inthis behalf must be held to be based upon a mistakenpremise..." 30. The learned Senior Counsel further submitted that even forinitiating proceedings, the Competent Authority must record that he https://hcservices.ecourts.gov.in/hcservices/ has reason to believe there exist a link between the propertysought to be forfeited and illegally acquired money and referred tothe following judgment reported in (2003) 7 SCC 436 [Fatima Mohd.Amin v. Union of India]. Reliance was placed on the followingpassages found in paragraphs 7 to 9:-"7. We have heard the learned counsel for theparties and gone through the reasons recorded by thecompetent authority along with the show-causenotice. We do not find any averments to the effectthat the property acquired by the appellant is abenami property of her son or the same was illegallyacquired from her son.8. The contents of the said notices, even if takenat their face value do not disclose any reasonwarranting action against the appellant. Noallegation whatsoever has been made to this effectthat there exists any link or nexus between theproperty sought to be forfeited and the illegallyacquired money of the detenu(s).9. As the condition precedent for initiation ofthe proceedings under SAFEMA did not exist, theimpugned orders of forfeiture cannot be sustained.In that view of the matter, the appeals deserve tobe allowed. The order under challenge is set aside."31. He further referred to the following passages in thejudgment of the Division Bench of the Kerala High Court inW.A.No.1645 of 2007(E) dated 24.02.2009 [Kannanchery Abdu v. TheCompetent Authority under SAFEMA and others], which was relied onby the Tribunal in the impugned order, which are as follows:-"The NRE passbook is sufficient to prove the sourceof income. The finding of the competent authorityas well as the appellate authority was that, therewas no evidence to show that how they earned moneyin Dubai, as books of accounts in Dubai was notproduced. How he earned money in Dubai is not amatter that can be looked into by the authorities asno law can be enacted regarding the source of incomeor accounting procedure in Dubai. No action has beentaken against the detenu under the FERA or FEMA forillegal remittances of money to India.From the NRE account money was withdrawn and theypurchased the properties. We are of the view thatthe detenu has explained the source of money and itcannot be said that the properties were purchasedwithout accounting for the source.The appellant has explained the source and sincethere is no allegation in the show cause notice that https://hcservices.ecourts.gov.in/hcservices/ he has purchased the car with the illegally acquiredmoney violating the provisions of the Act, we are ofthe view that the said money is not liable to beforfeited and it has to be released to theappellant."32. The learned Senior Counsel for the contesting respondentsfurther referred to a judgment of a Division Bench of this Court inW.P.Nos.1149 and 1150 of 2001 dated 24.03.2008 presided byP.K.Misra,J.(as he then was). In paragraph 16, it was observed asfollows:-"16. Even though such a submission may appear, primafacie, to be attractive, on a closer scrutiny cannotbe accepted. There is no doubt that any actiontaken under the Act has got far reachingconsequence. The ostensible owner of a property islikely to be deprived of the property. The procedurecontemplated in such Act containing provisionsrelating to forfeiture of properties standing in thename of a relative is required to be complied withstrictly in accordance with the provisions. Wherethe method of issuance of notice and subsequentforfeiture have been laid down in clear terms by thestatutes, the authorities are required to follow theprocedure. This cannot be equated with a case ofmere prejudice. On the other hand, such a defectrelating to absence of notice under Section 6(1) onthe convict is a jurisdictional defect and theauthorities concerned cannot be heard to say that noprejudice is caused. Law is well settled that theauthorities vested to do a particular matter in amanner contemplated, such action has to be taken, inaccordance with the manner contemplated or not atall. (See AIR 1969 SC 634; AIR 1969 SC 267 and 2002(1) SCC 630)"33. In this case, while issuing notice under Section 6, theCompetent Authority recorded that he had reason to believe that theproperty owned by the first respondent was acquired out of hisillegal earnings and therefore, he should be put on notice.34. Accepting the contesting respondents' appeal, the Tribunal(ATFP) in the impugned order, recorded the following findings:-"5. ....A reading of the recorded reasons tobelieve, on the basis of which the show cause noticewas issued in this case, it is clear that the entireproceedings are based on issuance of the order ofdetention against the appellant. But, the aboveorder was set aside by the Hon'ble Supreme Courtyears before the issuance of the show cause notice.Therefore, on the basis of the above show causenotice, no further proceedings can be made and we https://hcservices.ecourts.gov.in/hcservices/ agree with the learned counsel for the appellant onthis point. 6. ....The contention of the appellant that the hasadmitted the guilt only to avoid difficulties cannotbe accepted and the fact that he is convicted cannotbe disputed and he is covered under section 2(2) ofthe Act. The competent Authority ought to haveissued fresh show cause notice after recording thereasons....... ........The reasons recorded in 2004was not placed before us. It was not given to theappellant and, in any event, on the basis of thatreasons said to be recorded in 2004, no show causenotice was issued. Section 6(1) provides thatreasons should be recorded first before issuing theshow cause notice. It other words, issuance of showcause notice should be preceded by recording ofreasons. In this case, since no show cause noticewas issued on the basis of conviction, we are of theview that the property of AP1 cannot be forfeited onthe basis of the show cause notice issued in thiscase.....................In this case, after knowing about theconviction and recording of reasons to that effect,the Competent Authority ought to have issued a showcause notice on the basis of the conviction andought to have withdrawn the first show cause notice.That was not done and the present proceedingsstarted with the only show cause notice issued inthe case is illegal as his detention order was setaside.10. ...In fact, no reasons are stated by theAuthority why he considered the property mentionedin the show-cause notice as illegally acquiredproperty and why he came to such a reasonablebelief. Here, there is total absence of reasons. Asalready stated, merely because a person is detainedor convicted, one cannot come to the conclusion thatall his properties are illegally acquired.12. ...We have found that the present property waspurchased in 1995 out of the sale proceedings of theearlier property.13. ...There is no allegation that while appellantwas an NRI, he violated any of the Indian lawsapplicable to him in earning the income. 14. ...He was not charge-sheeted for earning moneyin Singapore or bringing silver and gold to India orselling the same in India under the Customs Act orFERA or FEMA. He has brought gold and silver after https://hcservices.ecourts.gov.in/hcservices/ paying duty and sold the same and deposited theproceeds in the bank. Selling of silver and goldand earning were shown in the income tax returns andtherefore he has legally explained the source of hisincome. In 1999 merely because two persons who werein possession of foreign currencies mentioned aboutthe appellant's name and appellant was thereafterconvicted is not a ground to say that hisacquisition of property in 1995 was illegalacquisition.15. ...The entire proceedings are illegal. We arealso of the opinion that even if the show causenotice is valid, by preponderance of probabilitiesappellant also had discharged the burden cast on himin proving the legal source of his invested income."35. As correctly found by the Tribunal, the show cause noticeissued by the writ petitioner suffers from manifest irregularity,non-application of mind and in total perversion of SAFEMA. Thoughthis Court has held that in a given case, there is no impedimentfor the competent authority to file a writ petition, the saiddiscretion must be properly exercised by the authority. It is onlyin cases where Tribunal's order is perverse, the question ofentertaining a writ petition will arise. It is not a fit case whereany interference is called for in the impugned order of the thirdrespondent Tribunal. 36. Once again the Supreme Court in the judgment reported in(2007) 2 SCC 510 [P.P.Abdulla and another v. Competent Authorityand others] went into the issue relating to confiscation of theproperties of smuggler under the SAFEMA. It was held that Section 6(1) of the SAFEMA will have to be strictly followed and theauthority's satisfaction must be recorded in writing, failingwhich, the notice is liable to be quashed. It is necessary toextract paragraphs 6 to 11, which are as follows:- "7. Learned counsel submitted that it has beenexpressly stated in Section 6(1) that the reason tobelieve of the competent authority must be recordedin writing. In the counter-affidavit it has alsobeen stated in para 8 that the reasons in the noticeunder Section 6(1) were recorded in writing. In ouropinion this is not sufficient. Whenever the statuterequires reasons to be recorded in writing, then inour opinion it is incumbent on the respondents toproduce the said reasons before the court so thatthe same can be scrutinised in order to verifywhether they are relevant and germane or not. Thiscan be done either by annexing the copy of thereasons along with the counter-affidavit or byquoting the reasons somewhere in the counter-affidavit. Alternatively, if the notice itself https://hcservices.ecourts.gov.in/hcservices/ contains the reason of belief, that notice can beannexed to the counter-affidavit or quoted in it.However, all that has not been done in this case.8. It must be stated that an order of confiscationis a very stringent order and hence a provision forconfiscation has to be construed strictly, and thestatute must be strictly complied with, otherwisethe order becomes illegal.9. In our opinion, the facts of the case arecovered by the decision of this Court in FatimaMohd. Amin v. Union of India1. In the present casethe contents of the notice, even if taken on facevalue, do not disclose any sufficient reasonwarranting the impugned action against the appellantas, in our opinion, the condition precedent forexercising the power under the Act did not exist.Hence, the impugned orders cannot be sustained.10. In the present case, in the notice dated 15-3-1988 issued to the appellant under Section 6(1) ofthe Act (copy of which is annexed as Annexure P-1 tothis appeal), it has not been alleged therein thatthere is any such link or nexus between the propertysought to be forfeited and the alleged illegallyacquired money of the appellant.11. Hence, in view of the decision of this Courtin Fatima Mohd. Amin case1 the said notice dated 15-3-1988 has to be held to be illegal. Consequentlythe order passed in pursuance of the said notice isdeclared as null and void. The appeal is, therefore,allowed and the impugned orders of the High Courtand the authorities concerned are set aside. Nocosts."37. In the light of the above, the writ petition standsdismissed with cost of Rs.10,000/- (Rupees Ten thousand only)payable to respondents 1 and 2. Connected miscellaneous petition isclosed.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.svki https://hcservices.ecourts.gov.in/hcservices/ ToThe ChairmanAppellate Tribunal for Forfeited Property,New Delhi.+ 1 CC To Mr.M.L.Ramesh Advocate SR NO.25615+ 1 CC To Mr.M.A.Abdul Huck Advocate SR NO.25556W.P.No.2939 of 2011CES(CO)ABH/03.05.2012