KURUNGATTIL MOHAMMED KUTTY v. THE COMPETENT AUTHORITY

ANTONY DOMINIC, J.================OP NO. 4125 OF 2001 (N)=====================Dated this the 25th day of May, 2009 J U D G M E N TThe challenge in this original petition is against Exts.P3, P13and P14 orders. 2.Facts of the case are that according to the respondentsproceedings under the Conservation of Foreign Exchange andPrevention of Smuggling Activities Act were initiated against thepetitioner and an order of detention was issued against him bythe Government of Maharashtra sometime in September, 1984. Itis stated that although the petitioner was not detained pursuantto the order of detention, notice under Section 6 of the Smugglersand Foreign Exchange Manipulators (Forfeiture of Property) Act,1976 (hereinafter referred to as the Act for short) was issued. Itwould appear that the petitioner filed Exts.P1 and P2 repliesdisputing the applicability of the Act and unsustainability of theproceedings initiated. However rejecting the contentions, the 1strespondent issued Ext.P3 order forfeiting 40 cents of land inSy.No.83/7 of Oorakam Village along with a tiled house with landin Sy.No.84/1 under Section 7(1) of the Act. OP No.4125/01:2 :3.Petitioner filed Ext.P4 appeal before the Appellateauthority accompanied by Exts.P5 to P8 affidavits of his uncle andfather explaining the source of purchase of the property forfeited.He also raised additional grounds by filing Ext.P9 relying onExt.P10 guidelines issued by the Government of India directingthe competent authorities to deal with small cases of forfeiture ofproperty where the value of the property involved is less thanRs.1 lakh in the following manner.“(a)Cases where proceedings are yet to be initiated andcases where the proceedings are already initiated:The proceedings under Section 6(1) of the SAFEM(FOP) Act, 1970 need not be initiated and if already initiated, may be dropped in the cases of (i) a person referred toin clause (a) or clauses (b) of sub-section (2) of Sec. 2 of theAct (hereinafter referred to as the 'principal person'); (ii)each of the relatives and associates of the principal person, as have been referred to in clauses (c) and (d) respectivelyof sub-section (2) of section 2(2), if the aggregate value ofthe properties held by the aforesaid persons (that is, the sumtotal of the values of the properties held by all the personsreferred to above) in respect of which proceedings under theAct have been or can be initiated, does not exceedRs.1,00,000/-. Before such non-initiation/ dropping, whetherthe value of property is less than Rs.1,00,000/- should havebeen identified by through investigations.(b)Cases where the final orders are issued by Cas:In the cases where the value of property involvedexceeds Rs.1,00,000/- and the Show Cause Notices areissued; the evidences furnished by the aforesaid person(s) toprove the sources of income, are accepted by CAs and theultimate value of property to be forfeited comes to less than OP No.4125/01:3 :Rs.one lakh as per the order of CAs issued under the Act, insuch cases further action under section (19) for takingpossession of the property may be dropped.4.These instructions are in the nature of guidelines onlyand are being issued with a view to enable the CAs and allthe officers working with them to concentrate more onbringing to book economic offenders with substantialproportion instead of spending their time and energy inhandling small cases.”4.He also filed Ext.P11 petition for permitting him to urgeadditional grounds. The appeal was heard by the AppellateAuthority and by Ext.P13, the appeal was rejected. The contentionthat since he had not undergone detention pursuant to the orderof detention passed under the COFEPOSA Act, his property is notliable to be forfeited under the Act was overruled. The fact thatthe property was purchased in his name by his relative way backin 1972 was also overruled and on facts, I do not think anysufficient material is available to interfere with such findings. 5.However, dealing with the claim of the petitioner forthe benefit of Ext.P10 guideline, the Appellate Authority has heldin Ext.P13 as follows:It was next contended for the appellant, based on theadditional grounds that the guidelines dated the 23rdJune, 1994 issued by the Central Government to thecompetent authority should be applied and theproceedings should be dropped, as the value of theproperty is less than Rs one lakh. These guidelines haveno force of law and cannot be enforced. OP No.4125/01:4 :6.On consideration of the material on record, I am not ina position to accept the way in which the Appellate Authority hasdealt with the contentions of the petitioner. True, Ext.P10guidelines cannot have the force of law. However, fact remainsthat this was issued by the Government of India and thecompetent authorities and the Appellate Authority arefunctionaries under the Government of India. If a guideline hasbeen issued by Government of India, its subordinate authoritiesare bound by such guidelines. If the supporting authorities areallowed to be brushed aside and ignore such binding guidelines, that will cause a grave threat to the hierarchical system ofGovernment. If the view taken in the order is accepted, it maylead to a situation where one competent authority will accept theguidelines and other may not. There has to be uniformity andthat can be achieved only if all authorities accept and implementthe guidelines issued by the Government.7.Therefore, the view taken by the Appellate Authority inpara 7 of Ext.P13 extracted above cannot be accepted. It is seenthat Ext.P3 order was passed by the competent authority on 27thof February, 1998, while Ext.P10 guidelines was issued by theGovernment of India as early as on 23rd of June, 1994. If on the OP No.4125/01:5 :date of Ext.P3, Ext.P10 guideline were in force, there was noreason why the Competent authority should not have extendedthe benefit of the said order to the petitioner, provided he isotherwise eligible for the same.8.Since Ext.P10 guidelines has not been consideredeither by the Competent Authority and though urged, has beenignored by the Appellate Authority, I am inclined to set asideExts.P3 and P13 for that reason. Ext.P14 being consequential, also has to be set aside. 9.Accordingly, setting aside Exts.P3, P13 and P14, theoriginal petition is disposed of directing the 1st respondent toreconsider the proceedings with notice to the petitioner anddecide the matter in accordance with law, taking into accountExt.P10 guideline also. Original petition is disposed of as above.ANTONY DOMINIC, JUDGERp