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CHEQUE BOUNS CASE

Sh. Atma Singh has filed W.P.(C) No. 1059/1997 impugning the order dated 15th November, 1996 of the Appellate Tribunal for Forfeited Property dismissing his appeal against the order dated 28 th December, 1994 of the Competent Authority under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) forfeiting his property being a house and agricultural land measuring 40 Kanals 17 Marlas both in village Sheron, Tehsil Taran Taran, District Amritsar.Before parting with the case reference may be made to Mahesh Kantilal Zaveri Vs. Union of India 2010 VII AD (Delhi) 804 where this Court relying on Attorney General for India Vs. Amratlal Prajivandas (1994) 5 SCC 54 held that until and unless the detention order under COFEPOSA is successfully challenged, the basis of subsequent forfeiture under SAFEMA cannot be questioned. There is no averment herein of Sh. Atma Singh having successfully challenged the order against him under COFEPOSA and thus the forfeiture effected of the properties of Sh. Atma Singh, Sh. Jit Singh and Sh. Manjeet Singh cannot also be questioned. The petitions are liable to fail on this ground also. The petitioners, under interim orders in these petitions have retained possession of the forfeited properties. They are now directed to, on or before 30th September, 2011, in compliance of the orders of forfeiture impugned in these petitions deliver possession of the properties to the respondents and do all other acts, deeds and things which they may be so required to do. The Competent Authority SAFEMA is also directed to forthwith take possession of the property.

*IN THE HIGH COURT OF DELHI AT NEW DELHI

English: Golden Temple Amritsar

English: Golden Temple Amritsar (Photo credit: Wikipedia)

Date of decision: 25th July, 2011

+ W.P.(C) NO.1058/1997 SH. JIT SINGH & ANR. ….. Petitioners Through: Ms. Jyoti Singh, Sr. Adv. with Ms. Vandana Sharma & Ms. Shikha

Tyagi, Advs.

Versus

UNION OF INDIA & ORS. ….. Respondents Through: Mr. Baldev Malik, Adv. for R-1. AND

+ W.P.(C) NO.1059/1997 SH. ATMA SINGH ….. Petitioner Through: Ms. Jyoti Singh, Sr. Adv. with Ms. Vandana Sharma & Ms. Shikha

Tyagi, Advs.

Versus

UNION OF INDIA & ORS. ….. Respondents Through: Mr. Baldev Malik, Adv. for R-1. CORAM :-

HON’BLE MR. JUSTICE RAJIV SAHAI ENDLAW

1. Whether reporters of Local papers may

be allowed to see the judgment? Yes.

2. To be referred to the reporter or not? Yes.

3. Whether the judgment should be reported Yes. in the Digest?

W.P.(C)Nos.1058/1997 & 1059/1997 Page 1 of 24 RAJIV SAHAI ENDLAW, J.

1. The two petitioners namely Sh. Jit Singh and Sh. Manjeet Singh in W.P.(C) No.1058/1997 are the sons of Sh. Atma Singh who is the petitioner in W.P.(C) No.1059/1997.

2. Sh. Atma Singh has filed W.P.(C) No. 1059/1997 impugning the order dated 15th November, 1996 of the Appellate Tribunal for Forfeited Property dismissing his appeal against the order dated 28 th December, 1994 of the Competent Authority under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) forfeiting his property being a house and agricultural land measuring 40 Kanals 17 Marlas both in village Sheron, Tehsil Taran Taran, District Amritsar.

3. Sh. Jit Singh and Sh. Manjeet Singh have filed W.P.(C) No.1058/1997 impugning the common order dated 18 th November, 1996 of the Appellate Tribunal for Forfeited Property dismissing their separate appeals against the orders dated 22 nd December, 1994 and 28th October, 1994 respectively of the Competent Authority forfeiting their one fourth W.P.(C)Nos.1058/1997 & 1059/1997 Page 2 of 24 undivided share each in agricultural land in village Sheron, Tehsil Taran Taran, District Amritsar.

4. Notice of both the writ petitions was issued and vide order dated 12 th March, 1997, the parties were directed to maintain status quo regarding possession. Counter affidavit has been filed by the respondents in W.P.(C) No.1059/1997. On 28th February, 2002, Rule was issued and the interim order confirmed. On 13th December, 2007, the counsel for the petitioners gave up the challenge to Sub-Section 6(A) of Section 12 of SAFEMA as originally made in the petitions. On 21st July, 2009, the petitions were dismissed in default. Applications for restoration were filed. In the said applications, it has been stated that Sh. Atma Singh expired on 2 nd June, 2009. The application for restoration of W.P.(C) No.1059/1997 filed by Sh. Atma Singh has been filed by the widow of Sh. Atma Singh. The applications for restoration were allowed on 17th February, 2011 and the writ petitions restored to the original position. No formal order of substitution of legal representatives of Sh. Atma Singh was sought or made. Technically, the writ petition filed by Sh. Atma Singh has abated. W.P.(C)Nos.1058/1997 & 1059/1997 Page 3 of 24 However, since no objection in this regard has been taken by the respondents and arguments have been addressed and heard on merits in the petitions, it is deemed expedient to decide the writ petition preferred by Sh. Atma Singh on merits.

5. The senior counsel for the petitioners during the course of hearing had contended that the record of the Competent Authority and the Appellate Authority had not been requisitioned till now and sought adjournment on that ground. However, since in the long time of 14 years since when the petitions have been pending in this Court, the record was not sought to be requisitioned, it was not deemed appropriate to adjourn the matter and it was directed that if during the hearing need for the record was felt, it will be called for. No such need has been felt. Nevertheless, the counsel for the respondents was directed to place the record before this Court before the order is signed, to satisfy the judicial conscience of this Court that no error has crept in owing to the record being not so available. The record has been so made available and has been perused. W.P.(C)Nos.1058/1997 & 1059/1997 Page 4 of 24

6. An order of detention of Sh. Atma Singh under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA) was made on 19th December, 1974. He was detained on the ground that he had been dealing in smuggling of Opium. The Competent Authority issued a notice under Section 6(1) of SAFEMA to Sh. Atma Singh on 7th January, 1977 and after considering the objections of Sh. Atma Singh, as aforesaid made an order dated 28 th December, 1994 of forfeiture of house and agricultural land in his name in village Sheron, Tehsil Taran Taran, District Amritsar. The Appellate Tribunal dismissed the appeal preferred by Sh. Atma Singh observing / holding as under: (i) The claim of Sh. Atma Singh was that he had one third share in ancestral land and also cultivated the agricultural land of his father-in-law who was living with him before his death many years ago;

(ii) That Sh. Atma Singh failed to give the information sought from him by the Competent Authority without any plausible W.P.(C)Nos.1058/1997 & 1059/1997 Page 5 of 24 explanation. Sh. Atma Singh had thus avoided giving any information thereby restricting the enquiry into his other properties;

(iii) Though Sh. Atma Singh filed affidavits but without offering himself for cross examination;

(iv) Sh. Atma Singh further claimed that besides agricultural income he also had income from professional wrestling as well as from studs / cattle;

(v) However, the claim of income from agriculture, professional wrestling and studs / cattle was not based on any verifiable evidence;

(vi) Though Sh. Atma Singh claimed substantial savings to acquire properties but no money out of such savings was ever put in post office or bank accounts;

W.P.(C)Nos.1058/1997 & 1059/1997 Page 6 of 24 (vii) Sh. Atma Singh failed to answer the queries regarding extent of agricultural income or the details of the claimed ancestral land;

(viii) That the summons sent to the wife and father-in-law of Sh. Atma Singh had remained uncomplied;

(ix) In the absence of explanation, it was concluded that the income from agricultural activities was meager and not sufficient for the entire family or to justify the savings; (x) No specific year wise income from wrestling or from sale of studs and cattle was shown;

(xi) Merely, being a wrestler does not prove income therefrom; (xii) On the contrary, it was on record that the father of Sh. Atma Singh had borrowed monies from the Punjab Government and which he would not have borrowed had Sh. Atma Singh been earning as claimed;

W.P.(C)Nos.1058/1997 & 1059/1997 Page 7 of 24 (xiv) No proof was submitted of land on which the house was constructed being ancestral land; rather the original claim was of the said land being the self acquired land of Sh. Atma Singh.

7. The Competent Authority was also of the view that certain other land in village Sheron, Tehsil Taran Taran, District Amritsar had been acquired by Sh. Atma Singh in the names of his sons Sh. Jit Singh & Sh. Manjeet Singh. Being persons covered by Section 2(2)(c) of SAFEMA, notices under Section 6(1) of the Act were issued to them and after considering the objections filed by them, the Competent Authority as aforesaid made orders dated 22 nd December, 1994 and 28 th October, 1994 respectively of forfeiture.

8. The Appellate Tribunal in the common order dated 18 th November, 1996 on separate appeals preferred by Sh. Jit Singh & Sh. Manjeet Singh observed / held :

W.P.(C)Nos.1058/1997 & 1059/1997 Page 8 of 24 (i) That the approximate purchase consideration of the land in the name of Sh. Jit Singh and Sh. Manjeet Singh was `67,500/- which was sought to be explained as under:

“(a) Loan from Gurdip Singh S/o Pratap Singh, `10,000/- Village Sheron, Teh. Taran Taran, Distt. –

Amritsar on 22nd March, 1971.

(b) Loan from Rur Singh S/o Banta Singh, R/o `8,000/- Vill. Sheron, Teh. Taran Taran, Distt.

Amritsar on 22nd March, 1971.

(c) Loan from Fauja Singh S/o Saran Singh `5,000/- R/o Rani Villa, Teh. Taran Taran, Distt.

Amritsar on 25th March, 1971.

(d) Sale of buffalo to Ajaib Singh S/o Kartar `7,700/- Singh R/o Sultan Wind, B. Division, Gali

W.P.(C)Nos.1058/1997 & 1059/1997 Page 9 of 24 Batwala, Amritsar.

(e) Sale of buffalos to Harbans Singh S/o `17,500/- Uzagar Singh on 20th March, 1971.

(f) Amount received from father Sh. Atma `19,300/- Singh and savings from agriculture.”

`67,500/-”

(ii) However, neither Sh. Jit Singh nor Sh. Manjeet Singh had any agricultural land until purchase aforesaid, to have any savings from agriculture; similarly in the order in the case of Sh. Atma Singh agricultural income had not been held sufficient to justify savings; thus the explanation of the last item aforesaid of `19,300/- was not satisfactory and the amount of `19,300/- admittedly provided by Sh. Atma Singh had come from his illegal activities;

(iii) The monies claimed to have been loaned by Sh. Gurdip Singh, Sh. Rur Singh and Sh. Fauja Singh aforesaid were not claimed to have W.P.(C)Nos.1058/1997 & 1059/1997 Page 10 of 24 been loaned to Sh. Jit Singh or Sh. Manjeet Singh but to Sh. Atma Singh;

(iv) Sh. Gurdip Singh appearing as a witness before the Competent Authority had been unable to justify savings to be in a position to make a loan of `10,000/- to Sh. Atma Singh;

(v) Sh. Rur Singh who was claimed to have loaned `8,000/- was unable to even establish ownership of any land to be able to to have income to have savings of `8,000/-;

(vi) Sh. Fauja Singh who was stated to have loaned `5,000/- was retried from Army and was unable to substantiate that he had cash of `5,000/- to loan to Sh. Atma Singh;

(vii) It was thus held that the alleged loans were fictitious and in fact was the ill gotten money of Sh. Atma Singh himself;

(viii) Receipt of `7,700/- from sale of buffalo was disbelieved being disproportionate to the prevalent price of buffalos; W.P.(C)Nos.1058/1997 & 1059/1997 Page 11 of 24 (ix) Sale of buffalos to Sh. Harbans Singh remained unproved;

9. The senior counsel for the petitioners has at the outset contended that the proceedings insofar as against Sh. Jit Singh and Sh. Manjeet Singh are concerned, are entitled to be quashed for the reason that they were admittedly issued notices under Section 6(1) of the Act. It is contended that since they were not the detenu, for any action under SAFEMA against them, they were to be issued notices under Section 6(2) of the Act and which had admittedly not been given.

10. Section 6 of the SAFEMA is as under:

“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 W.P.(C)Nos.1058/1997 & 1059/1997 Page 12 of 24 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 ordinarily less than thirty days, to indicate the sources of his income, earnings or assets, out of which or by means of which he has acquired such property, the evidence on which he relies and other relevant information and particulars, and to show cause why all or any of such properties, as the case may be, should not be declared to be illegally acquired properties and forfeited to the Central Government under this Act.

(2) Where a notice under sub-section (1) to any person specifies any property as being held on behalf of such person by any other person, a copy of the notice shall also be served upon such other person.”

11. The contention of the senior counsel for the petitioner is that the Scheme of Section 6 provides for a notice under Section 6(1) to the detenu under COFEPOSA or other Acts mentioned in Section 2(2)(a)(b) and a notice under Section 6(2) to any other person holding such property on behalf of the detenu.

W.P.(C)Nos.1058/1997 & 1059/1997 Page 13 of 24

12. Without even entering into the merits of the aforesaid contention, it has at the outset been enquired from the senior counsel for the petitioners as to how the petitioners can claim to have been prejudiced by receipt of a notice under Section 6(1) instead of under Section 6(2) as claimed by them. No answer has been forthcoming. The senior counsel for the petitioners could only contend that the provisions of a statute as SAFEMA ought to be strictly construed. However, it appears that in the absence of any prejudice having been shown to have been suffered, a mistake in the provision of law under which notice has been issued could be of no avail, the purport of the notice being to enable the person against whom action of forfeiture of property is contemplated to show cause against the same. It is not in dispute that appropriate opportunity to show cause has been given.

13. Even otherwise, I do not find any merit in the contention aforesaid. Section 6(1) refers to a “person to whom SAFEMA applies”. Section 2(1) of the Act makes the provisions of the Act applicable to the “persons specified in Sub-Section 2” and Clause (c) of Sub-Section (2) includes therein the relatives of a person who have been convicted inter alia under W.P.(C)Nos.1058/1997 & 1059/1997 Page 14 of 24 COFEPOSA, and it is not in dispute that Sh. Jit Singh and Sh. Manjeet Singh were relatives of the detenu / convicted person Sh. Atma Singh, within the meaning of the Act. Section 6(2) does not apply to persons to whom SAFEMA applies and contemplates notice to persons other than those to whom SAFEMA applies and who may be holding the property on behalf of a person to whom SAFEMA applies. I find that though this Court in Smt. Kamla Bai Vs. UOI 109 (2004) DLT 237 appears to suggest otherwise but not really so; moreover in that case no notice whatsoever had been given to the petitioner who was the wife of the detenu.

14. The senior counsel for the petitioner next contends that the Competent Authority as well as the Appellate Authority have in both matters proceeded on the premise that they have to decide on the basis of preponderance of probabilities. It is contended that the burden to prove that the property has been acquired from known justified sources of income shifts to the noticee only after the Competent Authority has discharged the initial burden of establishing that the property has been W.P.(C)Nos.1058/1997 & 1059/1997 Page 15 of 24 acquired from ill gotten means. It is contended that the Competent Authority had failed to discharge such initial burden in the present case.

15. However, I find that Section 8 of SAFEMA, in any proceedings under SAFEMA places the burden of proving that any property, specified in the notice served under Section 6 is not illegally acquired property, on the person affected. In the face of the said provision, it has been enquired from the senior counsel for the petitioners as to how it is contended that the initial burden is on the Competent Authority.

16. The senior counsel for the petitioners has in this regard referred to Shanti Devi Vs. Union of India 73 (1998) DLT 477 (DB), P.P. Abdulla Vs. The Competent Authority 2007 (1) Crimes 69(SC) and Mohinder Kaur Vs. Union of India 180 (2011) DLT 149.

17. However the cited judgments fail to support the contention of the senior counsel for the petitioners. All that the Division Bench in Shanti Devi (supra) held was that the applicability of SAFEMA is not attracted unless some link or nexus between the property held by the relative and W.P.(C)Nos.1058/1997 & 1059/1997 Page 16 of 24 illegal activity of the convict / detenu is shown to exist. The link in the present case was sufficiently established in the notices issued. The senior counsel admits that Sh. Jit Singh and Sh. Manjeet Singh were minor at the time of acquisition of the land and had no source of income of their own. The explanation of Sh. Jit Singh and Sh. Manjeet Singh themselves was as aforesaid of the sale consideration. Their response / defence was of their father Sh. Atma Singh, being the detenu / convict, having arranged the monies either himself or through loans as aforesaid. That was in my opinion sufficient link / nexus between the properties and the illegal activity particularly when Sh. Atma Singh was himself unable to justify any legal source of income of his own. The principle laid down in P.P. Abdulla (supra) is the same. In Mohinder Kaur (supra), the notice under Section 6(1) was found to be lacking since the period during which petitioner‟s husband had indulged in illegal activities was not correlated to the acquisition of property. Such is not the case here. On the contrary, the Supreme Court in Smt. Kesar Devi Vs. UOI AIR 2003 SC 4195 and the Division Bench of this Court in Prem Mehra (deceased) by Lrs. Vs. V.K. Baranwal, Competent Authority 133 (2006) DLT 653 held that the burden W.P.(C)Nos.1058/1997 & 1059/1997 Page 17 of 24 of establishing that the properties mentioned in notice under Section 6 which are held by a relative of the convict / detenu, are not the illegally acquired properties of the convict / detenu, lies upon such relative in fact associate; he must establish that the said property has not been acquired with the monies or assets provided by the detenu / convict or that they infact did not or do not belong to such detenu / convict.

18. The senior counsel for the petitioners also argued that opportunity to cross examine Sh. Gurdip Singh, Sh. Rur Singh and Sh. Fauja Singh who were claimed to have given loans for purchase of land in the name of Sh. Manjeet Singh and Sh. Jit Singh had not been availed of and thus their statement of having given loan ought to have been believed and has been wrongly disbelieved by the Competent Authority and the Appellate Authority. However, the petitioners have not placed any document whatsoever in this regard before the Court. The senior counsel for the petitioners states that she is seeking requisition of records for the said purpose only. The petitioners have in fact failed to place before this Court W.P.(C)Nos.1058/1997 & 1059/1997 Page 18 of 24 even the affidavit if any filed by the said persons before the Competent Authority.

19. I have perused the file of the Competent Authority delivered by the counsel for the respondents on the day following the hearing. The same contains the statements of Sh. Gurdip Singh, Sh. Fauja Singh, Sh. Atma Singh, Sh. Harbans Singh, Sh. Ajaib Singh and Sh. Rur Singh. The said statements are not recorded in the form of examination and cross examination. The order sheet of the Competent Authority of that date also records that the statements of the said persons had been recorded. It is nowhere recorded that the cross examination had been refused. On the contrary, a perusal of the statements recorded shows that the answers therein are also as could be given only in cross examination. For instance Sh. Gurdip Singh has replied that neither he nor any of his family members had any bank account; that he had at about the same time as of giving the loan, also married his daughter and spent monies therein; similarly the inferences aforesaid drawn by the Appellate Authority from the statement of Sh. Fauja Singh are also borne out from his replies which could only be W.P.(C)Nos.1058/1997 & 1059/1997 Page 19 of 24 in reply to questions as in cross examination. It thus appears that the Competent Authority posed questions to the said persons on the basis of the defence / response of Sh. Jitt Singh / Sh. Manjeet Singh, for deciding the veracity thereof. It thus cannot be said that their statements ought to have been treated as gospel truth for the reason of opportunity to cross examine having not been availed of.

20. The senior counsel for the petitioners with reference to the petition of Sh. Atma Singh has only contended that while the property in his name which has been forfeited was purchased in 1963, the order of detention was in the year 1977. It is contended that thus the acquisition of the property could not be from the income of the offences for which he has been convicted.

21. I am unable to agree. The order of the Competent Authority in the case of Sh. Atma Singh shows records of recovery of smuggled goods from Sh. Atma Singh in the year 1974 also. Moreover, it was not the case W.P.(C)Nos.1058/1997 & 1059/1997 Page 20 of 24 of Sh. Atma Singh that in 1963 he had some other vocation or source of income. There is thus no merit in the said contention.

22. The senior counsel for the petitioners has also contended that the authorities have erred in making assessments on the basis of value of gold or in disbelieving Sh. Atma Singh‟s income from wrestling. It is contended that villagers cannot be expected to maintain records as were demanded.

23. Per contra, the counsel for the respondents has contended that the Competent Authority as well as the Appellate Authority have given detailed reasoning for the conclusions arrived at; they have held the petitioners to have failed to prove any other source of income for acquisition of property except through illegal means. It is further contended that the legislature having not provided for a second appeal against the order of the Appellate Tribunal, this Court in the guise of the exercise of power of judicial review cannot re-appreciate evidence and the challenge before this Court can only be on the grounds of violation of any W.P.(C)Nos.1058/1997 & 1059/1997 Page 21 of 24 procedure required to be followed and which is not the case. He thus contends that there is no merit in the petitions. I find substantial merit in the said contentions.

24. The senior counsel for the petitioners has in rejoinder cited para 25 of the judgment dated 14th September, 2007 of this Court in W.P.(C) No.4581/1996 titled Sh. Gian Chand Garg Vs. Union of India where in the facts of that case, on preponderance of probabilities it was held that the consideration for purchase of property was disproportionate to the known source of income. However, that is not the position here; as aforesaid Sh. Atma Singh was unable to establish any known source of income from which he could have made any savings as claimed.

25. The senior counsel for the petitioners has also argued that the order of forfeiture of properties of the brother of Sh. Atma Singh was also made and which was set aside in appeal. A copy of the order dated 20 th November, 1996 of the Appellate Tribunal has been handed over. However, the senior counsel for the petitioners has been unable to show as W.P.(C)Nos.1058/1997 & 1059/1997 Page 22 of 24 to how the facts as applicable to the brother of Sh. Atma Singh are relevant to the decision of the present petitions or applicable to Sh. Atma Singh and his sons.

26. Before parting with the case reference may be made to Mahesh Kantilal Zaveri Vs. Union of India 2010 VII AD (Delhi) 804 where this Court relying on Attorney General for India Vs. Amratlal Prajivandas (1994) 5 SCC 54 held that until and unless the detention order under COFEPOSA is successfully challenged, the basis of subsequent forfeiture under SAFEMA cannot be questioned. There is no averment herein of Sh. Atma Singh having successfully challenged the order against him under COFEPOSA and thus the forfeiture effected of the properties of Sh. Atma Singh, Sh. Jit Singh and Sh. Manjeet Singh cannot also be questioned. The petitions are liable to fail on this ground also.

27. No other argument has been urged by the senior counsel for the petitioners.

W.P.(C)Nos.1058/1997 & 1059/1997 Page 23 of 24

28. There is thus no merit in the petitions. The same are dismissed. The petitioners, under interim orders in these petitions have retained possession of the forfeited properties. They are now directed to, on or before 30th September, 2011, in compliance of the orders of forfeiture impugned in these petitions deliver possession of the properties to the respondents and do all other acts, deeds and things which they may be so required to do. The Competent Authority SAFEMA is also directed to forthwith take possession of the property.

No order as to costs.

RAJIV SAHAI ENDLAW

(JUDGE)

JULY 25, 2011

„gsr‟

(corrected and released on 24th August, 2011)

W.P.(C)Nos.1058/1997 & 1059/1997 Page 24 of 24

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