P.MOHANDAS V. UNION OF INDIA

OP/25128/1999

AI Insights

The case revolves around the petitioner, P. Mohandas, who challenged the forfeiture of his assets under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA). The petitioner was initially detained under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA), and subsequently faced asset forfeiture. The main legal contention was whether the detention order under COFEPOSA was valid, which in turn affected the jurisdiction to apply SAFEMA. The court examined the validity of the detention order and its implications on the forfeiture proceedings.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 722426 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 29-10-2013
• Assessment Year: misc
• Other Referred Cases: Additional District Magistrate, Jabalpur v. Sivakanth Shukla [AIR 1976 SC 1207]
• Laws Referred To: Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: P NAIR
• Assessee Lawyers: P K JOSEPH; M M BABY
• Keywords: Jurisdiction challenge; Forfeiture of assets; Illegal earnings; Detention under COFEPOSA; National emergency
• Section: 7(1); 6(1); 2(2)(b)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE A.V.RAMAKRISHNA PILLAI TUESDAY, THE 29TH DAY OF OCTOBER 2013/7TH KARTHIKA 1935 OP.No. 25128 of 1999 (N) ------------------------ PETITIONER(S): ---------------------- P. MOHANDAS, AGED 54, SIVARAM DRUG HOUSE, IRINJALAKKUDA P.O., TRICHUR DISTRICT, PIN-680 121. BY ADVS. SRI.P.K.JOSEPH, SMT.M.M.BABY. RESPONDENT(S): -------------------------- 1. UNION OF INDIA, REPRESENTED BY THE SECRETARY TO THE DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NEW DELHI. 2. THE APPELLATE TRIBUNAL FOR FORFEITED PROPERTY, 4TH FLOOR, LOK NAYAK BHAV AN, KHAN MARKET, NEW DELHI-110 003. 3. THE COMPETENT AUTHORITY, OFFICE OF THE COMPETENT AUTHORITY, SMUGGLERS AND FOREIGN EXCHANGE MANIPULATORS (FORFEITURE OF PROPERTY) ACT, 'UTSAV', NO.64/1, G.N. CHETTI ROAD, T. NAGAR, MADRAS-600 017. 4. THE INCOME TAX OFFICER, WARD 4, DIVISION I, AAYAKAR BHAVAN, S.T. NAGAR, TRICHUR. BY ADV. SRI.P. PARAMESWARAN NAIR, A.S.G. OF INDIA. THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 29-10-2013, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: rs. OP.No. 25128 of 1999 (N) APPENDIX PETITIONER'S EXHIBITS:- EXT.P1 COPY OF THE AGREEMENT DATED 25/09/1970 EXECUTED BETWEEN THE PETITIONER AND P.HARIHARAN. EXT.P2 COPY OF THE LETTER NO.L2.3251/73/DC DATED 07/04/1973 OF THE DRUGS CONTROLLER, TRIVANDRUM 1 TO THE PETITIONER AND P. HARIHARAN. EXT.P3 COPY OF THE LETTER NO.L2.3251/73/DC DATED 11/12/1974 OF THE DRUGS CONTROLLER AND LICENSING AUTHORITY, TRIVANDRUM 1 TO THE PETITIONER AND P. HARIHARAN. EXT.P4 COPY OF THE LETTER NO.A 4962/73/DCI/TCR DATED 28/12/1974 OF THE DRUGS INSPECTOR, TRICHUR TO THE PETITIONER. EXT.P5 COPY OF THE LETTER NO.L2. 11173/73/DC DATED 01/02/1975 OF THE DRUGS CONTROLLER TO THE PETITIONER. EXT.P6 COPY OF THE INSPECTION REPORT DATED 06/04/1973 FROM THE SALES TAX OFFICER TO THE PETITIONER. EXT.P7 COPY OF THE INSPECTION REPORT DATED 30/07/1973 FROM THE SALES TAX OFFICER TO THE PETITIONER. EXT.P8 COPY OF THE CERTIFICATE DATED 14/07/1978 ISSUED BY DR.D.J. JUSSWALLA, OF THE TATA MEMORIAL HOSPITAL, BOMBAY . EXT.P9 COPY OF THE NOTICE NO.OCA/MDS/1879/78 DATED 22/12/1978 OF THE COMPETENT AUTHORITY TO THE PETITIONER. EXT.P10 COPY OF THE REPLY DATED 25/01/1979 BY THE PETITIONER. EXT.P11 COPY OF THE NOTICE NO.46-009-PQ-2316/TCR(F) DATED 6/03/1977 ISSUED BY THE INCOME TAX OFFICER, F WARD, TRICHUR TO PETITIONER. EXT.P12 COPY OF THE CERTIFICATE DATED 23/06/1981 ISSUED BY DR.N.D.BHOSALE OF THE ACCIDENT HOSPITAL, KOLHAPUR. EXT.P13 COPY OF THE CERTIFICATE UN DATED ISSUED BY DR.PAULOSE CHACKO OF THE MEDICARE HOSPITAL, ERNAKULAM. EXT.P14 COPY OF THE UNDATED EXPLANATION SUBMITTED BY THE PETITIONER TO THE COMPETENT AUTHORITY. EXT.P15 COPY OF THE REPLY AFFIDAVIT DATED 16/12/1996 SUBMITTED BY THE PETITIONER TO THE COMPETENT AUTHORITY. EXT.P16 COPY OF THE ORDER F NO.OCA/MDS/1879/78 DATED 27/02/1979 ISSUED BY THE COMPETENT AUTHORITY. 2/-......... OP.No. 25128 of 1999 (N) EXT.P17 COPY OF THE APPEAL MEMORANDUM NO.14/CHN/97 DATED 28/04/1997 FILED BEFORE THE SECOND RESPONDENT BY THE PETITIONER. EXT.P18 COPY OF THE ENGLISH TRANSLATION OF EXT.P1 AGREEMENT. EXT.P19 COPY OF THE ADDITIONAL LIST OF DOCUMENT DATED 05/03/1999 FILED BY THE PETITIONER BEFORE THE SECOND RESPONDENT. EXT.P20 COPY OF THE ORDER DATED 13/07/1999 ISSUED BY THE SECOND RESPONDENT. EXT.P21 COPY OF THE LETTER NO.14/MDS/97/3965 DATED 06/09/1999 OF THE REGISTRAR, APPELLATE TRIBUNAL TO THE PETITIONER. EXT.P22 COPY OF THE ORDER F. NO.OCA/MDS/1879/78 DATED 21/09/1999 ISSUED BY THE ASSISTANT DIRECTOR OF THE OFFICE OF THE COMPETENT AUTHORITY TO THE PETITIONER. RESPONDENT'S EXHIBITS:- NIL. //TRUE COPY// P.A. TO JUDGE rs. A.V. RAMAKRISHNA PILLAI, J. -------------------------------------------------- O.P. No. 25128 of 1999 -------------------------------------------------- Dated this the 29th day of October, 2013 J U D G M E N T This original petition was filed by the petitioner for quashing Exts.P20 and P22 (wrongly stated as 'Ext.P21') passed by respondents 2 and 3 respectively, for restraining the respondents from forfeiting the right, title and interest of the petitioner with respect to M/s. Sivaram Drug House pursuant to Exts.P20 and P22 and, for an order prohibiting the respondents from giving effect or implementing the aforesaid orders. 2. The petitioner suffered detention under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (“COFEPOSA” for short), alleging that the petitioner was in possession of certain movable assets, which were believed to have been acquired through illegal earnings. A forfeiture notice under Section 6(1) of the Smugglers O.P. No. 25128 of 1999 ..2.. and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (“SAFEMA” for short) was issued to the petitioner on 22.12.1978 proposing forfeiture of assets contained therein. The 3rd respondent, thereafter, passed an order dated 29.01.1997 under Section 7(1) of the Act forfeiting the assets as illegally acquired since the petitioner could not establish the nature of source of his acquisition. Aggrieved by the order passed by the 3rd respondent, the petitioner preferred an appeal before the 2nd respondent, who vide order dated 13.07.1999 in FPA No.14/CHN/97 dismissed the appeal and concluded that there is no reason to interfere with the order of the 3rd respondent. The petitioner was directed to deliver/surrender possession of the forfeited assets. Aggrieved by the said order, the petitioner has come up before this Court. 3. The main contention raised by the respondent is that the petitioner being a detenue under the provisions of COFEPOSA, is a “person” in terms of Section 2(2)(b) of SAFEMA. According to the respondent, investigations O.P. No. 25128 of 1999 ..3.. reveal that the petitioner was found in possession of certain movable properties, which were believed for the reasons recorded in writing to have been acquired through illegal sources and that was the reason for issuing a forfeiture notice. 4. The main argument advanced by the learned counsel for the petitioner is that there is no jurisdiction to follow Section 2(2)(b) of SAFEMA as there was no valid order of detention. In support of the argument, the learned counsel for the petitioner invited my attention to the relevant portion of the statute also. 5. The learned Standing Counsel for the Central Government per contra submitted that the order of detention has not been challenged by the petitioner before any competent authority. 6. In answer to the said argument, the learned counsel for the petitioner would submit that the Presidential Order declaring national emergency was in force during that time and, therefore, the petitioner was debarred from asserting his rights before any competent O.P. No. 25128 of 1999 ..4.. forum. It was pointed out that the national emergency was declared with effect from 25.06.1975 and the petitioner was taken into custody by the then Circle Inspector of Police, Irinjalakkuda in the evening of 26.08.1975. In that evening itself, the petitioner was sent to Thiruvananthapuram and; he was detained in the Central Prison there. He was released only two days after the date of revoking the emergency. In support of the argument, the learned counsel for the petitioner invited my attention to the decision of the apex court in Additional District Magistrate, Jabalpur v. Sivakanth Shukla [AIR 1976 SC 1207], which by a majority of decisions held as follows: “in view of the Presidential Order dated 27th June, 1975 no person has any locus standi to move any writ petition under Article 226 before a High Court for Habeas Corpus or any other writ or order or direction to challenge the legality of an order of detention on the ground that the order is not under or in compliance with the Act or is illegal or is vitiated by malafides factual or legal, or is based on extraneous considerations.” Therefore, according to the learned counsel for the petitioner, the petitioner was not in a position to challenge his detention under COFEPOSA. His remedy was completely barred not only with regard to his challenge on O.P. No. 25128 of 1999 ..5.. the ground of violation of his fundamental rights, but also, on all the grounds available to him, namely, that his detention was not under or not in compliance with the Act or was illegal or vitiated by malafides or based on extraneous considerations. I see valid force in the submission made by the learned counsel for the petitioner. On a consideration of the entire facts and circumstances of the case, this Court is of the definite view that there was no valid order of detention, which gives jurisdiction to the respondent to follow Section 2(2)(b) of SAFEMA. As valid reasons are pointed out by the learned counsel for the petitioner for not challenging the detention order, this Court is of the definite view that the impugned orders shall not be allowed to stand. In the result, the writ petition is allowed. Exts.P20 and 22 are hereby quashed. No costs. A.V. RAMAKRISHNA PILLAI, JUDGE bka/- "