1 cri-wp-868-11 pdp IN THE HIGH COURT OF JUDICATURE AT BOMBAY CRIMINAL APPELLATE JURISDICTION CRIMINAL WRIT PETITION NO. 868 OF 2011 Smt. [ENTITY] Petitioner Vs. 1. [ENTITY] and ors. Respondents Mr. [ENTITY] i[CASE NUMBER]by Mr. [ENTITY] for petitioner. Mr. [ENTITY] for respondent no.1. Mr. [ENTITY], PP for State. CORAM: [ENTITY] & U. D. SALVI, JJ. RESERVED ON: JULY 20, 2011. PRONOUNCED ON : JULY 27, 2011 JUDGMENT (PER [ENTITY],J.):
1. Rule. By consent, Rule is made returnable forthwith.
2. In this petition, filed under [SECTION] of the [ACT], the petitioner seeks to challenge the order of forfeiture passed by the Competent Authority under [SECTION] of the Smugglers and Foreign cri-wp-868-11 Exchange Manipulators (Forfeiture of Property) Act, 1976 (for short "[ACT]") on 7[CASE NUMBER]12[CASE NUMBER]2007 thereunder forfeiting three immovable properties and further duly confirmed by the Appellate Tribunal for Forfeited Property, New Delhi by its order dated 11[CASE NUMBER]1[CASE NUMBER]2011 in [CASE NUMBER] filed under [SECTION] of the said Act.
3. The petitioner was married to Dr. [ENTITY] on 14[CASE NUMBER]12[CASE NUMBER]1985 and she begotten two children from the said marriage, son -
[ENTITY] and daughter - [ENTITY]. However, petitioner obtained a divorce from Dr. [ENTITY] and married to one Shri [ENTITY] of Bahrain on 22[CASE NUMBER]2[CASE NUMBER]1999. Consequently, she shifted to Bahrain. When she was at the Mumbai International Airport on 4[CASE NUMBER]10[CASE NUMBER]2000, foreign currency equivalent to Indian Rs.70.54 lakhs was recovered and seized from her by the Customs Department and proceedings under the said Act were initiated against her. These proceedings attained finality when the revision application filed by her came to be decided by the Government of India as per the order dated 29[CASE NUMBER]10[CASE NUMBER]2004. The absolute confiscation of foreign currency seized from the petitioner was converted into confiscation on payment of cri-wp-868-11 redemption fine of Rs.10 lakhs and penalty of Rs.4 lakhs under the said order dated 29[CASE NUMBER]10[CASE NUMBER]2004. The balance amount of Rs.61,60,992[CASE NUMBER]- was refunded to the petitioner by the Customs Department vide Remand Order No. AIR-Cus[CASE NUMBER]39R[CASE NUMBER]18[CASE NUMBER]05.
4. In the meanwhile, a detention order dated 25[CASE NUMBER]5[CASE NUMBER]2001 was issued against the petitioner (hereinafter referred to as Affected Person or AP) and consequently a show-cause notice was served on her and her father on 13[CASE NUMBER]3[CASE NUMBER]2002 proposing forfeiture of the following properties under [ACT]:-
(i) Flat No.B-17, B-Wing of Sai Milap CHS Ltd.
Sai Baba Complex, Ciba Geigy Road, Goregaon (E), Mumbai 400 063.
(ii) Flat No. 1105, 11th Floor, Building No.B-29 Silver Arch, Shastri Nagar, Deluxe Phase, Off J.P. Road, Vill Oshiwara, Andheri (W), Mumbai - 400 053.
(iii) Flat No. 1106, 11th Floor, Building No.B-29 cri-wp-868-11 Silver Arch, Shastri Nagar, Deluxe Phase, Off J.P. Road, Vill Oshiwara, Andheri (W), Mumbai - 400 053.
(iv) [ENTITY] In State Bank of India, Kandivali (W), Mumbai - 62.
(v) Saving Bank Accounts (NRE) No.5-897400-113 City Bank, Mumbai.
(vi) An amount of Rs.61,60,992[CASE NUMBER]- (Amount of Sale proceeds of seized currency refunded By the Customs Department after adjusting Redemption fine and penalty).
As the detention order was revoked on 28[CASE NUMBER]12[CASE NUMBER]2005, the show-cause notice dated 13[CASE NUMBER]3[CASE NUMBER]2002 came to be withdrawn.
5. In [CASE NUMBER][CASE NUMBER][CASE NUMBER] the petitioner - accused came to be convicted for the offence under [SECTION] of the [ACT] and she was sentenced to suffer SI for 14 days and to pay a fine of Rs.50,000[CASE NUMBER]- in default to suffer further cri-wp-868-11 SI for six months. She was given set off under [SECTION] of [ACT]
This order of conviction and sentence passed by the learned Chief Metropolitan Magistrate, Mumbai was the basis to undertake fresh proceedings for forfeiture of the illegally acquired property and the provisions of [SECTION] became applicable to her.
6. The initial enquiries regarding the above stated immovable properties and Mila Co-op. Hsg. Society Ltd. informed that Flat No. B-17 was standing in the name of Smt. [ENTITY].
However, the petitioner's father by his letter received on 6[CASE NUMBER]5[CASE NUMBER]2002 stated that the marriage between petitioner and Dr. [ENTITY] was dissolved by a decree of divorce dated 4[CASE NUMBER]4[CASE NUMBER]1998 and Flat No. B-17 of Sai Mila CHS Ltd., Goregaon (E) was purchased by Dr. [ENTITY], the former husband of the AP in July 1987 and the entire consideration amount was paid by Dr. [ENTITY] from his income deposited after returning to India from Libya where he was employed for seven years.
It was further stated that after the divorce, the AP had handed over the said flat to Shri [ENTITY], her brother. The agreement dated 10[CASE NUMBER]10[CASE NUMBER]1987 revealed that the AP had agreed to purchase the said flat being constructed by M[CASE NUMBER]s. Express national Builders on ownership cri-wp-868-11 basis for a consideration of Rs.1,60,500[CASE NUMBER]- and only an amount of Rs.
35,000[CASE NUMBER]- was paid on the day of the agreement through two different cheques issued from State Bank of India, Kandivali (W) and Karnataka Bank Limited, Kandivali (W).
So far as the second immovable property is concerned, i.e. Flat No. 1106, 11th Floor, Building No. 29, Silver Arch, M[CASE NUMBER]s. [ENTITY] Housing Corporation (for short M[CASE NUMBER]s. [ENTITY]) vide its letter dated 20[CASE NUMBER]4[CASE NUMBER]2002 informed that as per the agreement dated 12[CASE NUMBER]7[CASE NUMBER]2000 said flat was purchased by Mrs. [ENTITY] from Shri [ENTITY]. An amount of Rs.47,000[CASE NUMBER]- was paid to M[CASE NUMBER]s. [ENTITY] and Rs.
5,17,000[CASE NUMBER]- was paid to Shri [ENTITY]. M[CASE NUMBER]s. [ENTITY] had allotted the said flat consisting of 940 sq.ft. (Super Built Up) to [ENTITY] for consideration of Rs.5,64,000[CASE NUMBER]- and he had paid an amount of Rs.
5,17,000[CASE NUMBER]- till 12[CASE NUMBER]7[CASE NUMBER]2000. It was further stated that Shri [ENTITY] had agreed to sell the said flat to the AP for total consideration of Rs.
22,09,000[CASE NUMBER]- vide the agreement dated 12[CASE NUMBER]7[CASE NUMBER]2000 and the AP had paid an amount of Rs.3,31,400[CASE NUMBER]- by a cheque drawn on Bahrain International Exchange and agreed to pay the balance amount of Rs.18,30,600[CASE NUMBER]-
after obtaining the loan from financial institution. By a subsequent cri-wp-868-11 letter dated 6[CASE NUMBER]5[CASE NUMBER]2002 M[CASE NUMBER]s. [ENTITY] informed the AP to take possession of Flat No. 1106 by making the balance payment of Rs.86,140[CASE NUMBER]-. By its letter dated 20[CASE NUMBER]4[CASE NUMBER]2002, M[CASE NUMBER]s. [ENTITY] informed the details about Flat No. 1105 of the very same building and on 11th Floor and admeasuing 610 sq.ft. (Super Built Up). It was stated that the said flat was purchased by one Mrs.[ENTITY] for a total consideration of Rs.3,66,000[CASE NUMBER]-
and she had paid an amount of Rs.3,20,000[CASE NUMBER]-. However, vide the agreement dated 12[CASE NUMBER]7[CASE NUMBER]2002 the said Mrs. [ENTITY] sold the said flat to AP for a total consideration of Rs.14,33,500[CASE NUMBER]-. The AP had paid an amount of Rs.2,15,000[CASE NUMBER]- to Mrs. [ENTITY] by a cheque drawn on India International Exchange and Rs.46,000[CASE NUMBER]- to M[CASE NUMBER]s. [ENTITY]. She had agreed to pay balance amount of Rs.11,72,500[CASE NUMBER]- after getting loan from financial institution. She was advised by letter dated 6[CASE NUMBER]5[CASE NUMBER]2002 to take possession of Flat No. 1105 on making the balance payment of Rs.
57,910[CASE NUMBER]-. Thus the AP had claimed to have availed a loan of Rs.33.12 lakhs to aquire both the flats in Building No. 29 of Silver Arch. During the enquiry, it was also revealed that as on 30[CASE NUMBER]9[CASE NUMBER]2003 the AP had an outstanding loan amount of Rs.49,34,264[CASE NUMBER]- to be paid to the HDFC and till 17[CASE NUMBER]1[CASE NUMBER]2006 a total amount of Rs.40,08,285[CASE NUMBER]- was repaid against the said loan amount. Saving Bank Accounts (NRE) No. 01192[CASE NUMBER]084184 cri-wp-868-11 with the State Bank of India, Kandivali, indicated that a total amount of Rs.5,39,900[CASE NUMBER]- was credited, out which an amount of Rs.3,24,000[CASE NUMBER]-was transferred from Bahrain and the balance amount as on 1[CASE NUMBER]2[CASE NUMBER]2006 in the said account was only Rs.4840[CASE NUMBER]-. Whereas Saving Bank Accounts (NRE) No. 5-897400-113 with City Bank, Mumbai indicated that an amount of Rs.4,98,200[CASE NUMBER]- was credited on 26[CASE NUMBER]5[CASE NUMBER]2005 and the balance as on 16[CASE NUMBER]2[CASE NUMBER]2006 was only Rs.17,063.31.
7. A fresh show-cause notice dated 29[CASE NUMBER]11[CASE NUMBER]2006 was issued under [SECTION] of [ACT] to the AP by the Competent Authority and she reply to the same on 20[CASE NUMBER]2[CASE NUMBER]2007. Personal hearing was granted to the AP and she reiterated her written submissions. The impugned order dated 7[CASE NUMBER]12[CASE NUMBER]2007 came to be passed forfeiting the following three immovable properties on the ground that they were illegally acquired properties in terms of [SECTION] of the [ACT]:
(i) Flat No.B-17, B-Wing of Sai Milap CHS Ltd.
Sai Baba Complex, Ciba Geigy Road, Goregaon (E), Mumbai 400 063.
cri-wp-868-11
(ii) Flat No. 1105, 11th Floor, Building No.B-29 Silver Arch, Shastri Nagar, Deluxe Phase, Off J.P. Road, Vill Oshiwara, Andheri (W), Mumbai - 400 053.
Flat No. 1106, 11th Floor, Building No.B-29
(iii) Silver Arch, Shastri Nagar, Deluxe Phase, Off J.P. Road, Vill Oshiwara, Andheri (W), Mumbai - 400 053.
The AP challenged the said order in [CASE NUMBER] filed under [SECTION] of the [ACT] and the appeal came to be dismissed by the Appellate Tribunal on 11[CASE NUMBER]1[CASE NUMBER]2011.
8. It was submitted by the learned counsel for the petitioner that the Competent Authority as well as the Appellate Tribunal had disregarded the order passed by the revisional authority on 29[CASE NUMBER]10[CASE NUMBER]2004 under the [ACT], the evidence on record submitted by the AP was not taken into consideration, principles of natural justice have been violated. It is alleged that the Appellate Tribunal's order dated 11[CASE NUMBER]1[CASE NUMBER]2011 appeared to have been signed by one of the members i.e. cri-wp-868-11 Shri [ENTITY] on 11[CASE NUMBER]1[CASE NUMBER]2011, but he signed the same only on 18[CASE NUMBER]2[CASE NUMBER]2011 and he had retired in the meanwhile on 13[CASE NUMBER]1[CASE NUMBER]2011. It is also submitted that the judgments of the Supreme Court were not considered and it is claimed that the show-cause notice dated 29[CASE NUMBER]11[CASE NUMBER]2006 ought to have been held as illegal. The findings arrived at by the Competent Authority as well as the Appellate Tribunal are perverse. The conclusions drawn by the Appellate Tribunal that the funds for acquisition of the property from the individual account of the petitioner instead of joint NRE account of the petitioner and her husband and non consideration by the Competent Authority while passing the forfeiture order, are perverse finding. It is also claimed that one of the members of the Appellate Tribunal, namely, Shri [ENTITY] had heard the revision application and passed the order dated 29[CASE NUMBER]10[CASE NUMBER]2004. His own decision was cited and relied upon by the petitioner and, therefore, the Tribunal was bound by the said order. The finding of the Tribunal that the transfer of Rs.20 lakhs from Dr. [ENTITY]'s NRE account to NRO account before transfer to the loan account of the petitioner with HDFC and that the said amounts were transferred by three cheque amounts is nothing but a perverse finding on the face of the record. It is further submitted that the fact of transfer of funds from NRO account cri-wp-868-11 of Dr.[ENTITY] after being credited to his NRE account would show that no illegality could be tagged with the transfer. It is also alleged that the impugned orders suffer from arbitrariness as the evidence placed on record was not considered. The Appellate Tribunal erred in holding that the petitioner was required to discharge the burden of proof cast upon her under [SECTION] of the [ACT], without initial burden of proof being discharged by the Competent Authority.
On all these grounds, it was submitted by the learned counsel for the petitioner that the impugned order passed by the Appellate Tribunal was illegal, bad in law and deserves to be quashed and set aside along with the order passed by the Competent Authority.
9. Mr. [ENTITY], the learned Standing Counsel for the [ENTITY], on the other hand, supported the impugned orders and submitted that all the material placed before the Competent Authority was considered by it while passing the forfeiture order. The Appellate Tribunal again reappreciated the evidence and by a detailed judgment confirmed the forfeiture order in respect of three immovable properties.
As per Mr. [ENTITY], there is no error apparent on the face of the record to cause interference in the concurrent findings recorded by the two cri-wp-868-11 authorities below and hence the petition deserves to be dismissed.
10. [SECTION] of the [ACT] prohibits holding of illegally acquired properties and it reads as under:-
"4. Prohibition of holding illegally acquired property:-
(1) As from the commencement of this Act, it shall not be lawful for any person to whom this Act applies to hold any illegally acquired property either by himself or through any other person on his behalf.
(2) Where any person holds any illegally acquired property in contravention of the provision of sub-
section (1), such property shall be liable to be forfeited to the Central Government in accordance with the provisions of this Act."
The term "illegally acquired property" has been defined under [SECTION] of [ACT] and it means,
(i) any property acquired by such person, cri-wp-868-11 whether before or after the commencement of this Act, wholly or partly out of or by means of any income, earnings or assets derived or obtained from or attributable to any activity prohibited by or under any law for the time being in force relating to any matter in respect of which Parliament has power to make laws;
(ii) any property acquired by such person, whether before or after the commencement of this Act, wholly or partly out of or by means of any income, earnings or assets in respect of which any such law has been contravened; or
(iii) any property acquired by such person, whether before or after the commencement of this Act, wholly or partly out of or by means of any income, earnings or assets the source of which cannot be proved and which cannot be shown to be attributable to any act or thing done in respect of any matter in relation to cri-wp-868-11 which Parliament has no power to make laws;
(iv) any property acquired by such person, whether before or after commencement of this Act, for a considerations, or by any means, wholly or partly traceable to any property referred to in sub-clauses (i) to (iii) or the income or earnings from such property, and includes -
(A) any property held by such person which would have been, in relation to any previous holder thereof, illegally acquired property under this clause if such previous holder had not ceased to hold it, unless such person or any other person who held the property at any time after such previous holder or, where there are two or more such previous holders the last of such previous holders is or was a transferee in good faith for adequate consideration.
(B) any property acquired by such person, whether cri-wp-868-11 before or after the commencement of this Act, for a consideration, or by any means, wholly or partly traceable to any property falling under item (A), or the income or earnings there from;"
11. [SECTION] of [ACT] provides for notice of forfeiture and sub-section (1) of the said Section reads 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] or otherwise, the competent authority has reason to believe (the reasons for such belief to be recorded in writing) that all or any or such properties are illegally acquired properties, it may serve a notice upon such person (hereinafter cri-wp-868-11 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."
12. [SECTION] of [ACT] states that no finding of any officer or authority under any other law shall be conclusive for the purposes of any proceedings under this Act. It is pertinent to note that the issue before the revisional authority was whether the seized foreign currency was required to be confiscated under the [ACT] or it should be allowed to be redeemed on payment of redemption fine and penalty. Revisionary Authority was not called upon to decide the issue as to whether AP holds any illegally acquired property as defined under cri-wp-868-11 [ACT] and whether the said property was required to be forfeited.
The fact that the foreign currency was allowed to be redeemed by the revisionary authority for the reasons stated in his order, could not be a reason for initiating the forfeiture proceedings by issuing the notice under [SECTION] of [ACT]. Similarly, the fact that the detention order passed under the [ACT] was revoked by the Government cannot be the reason for not initiating the forfeiture proceedings against the AP and more so when she was convicted under the [ACT] in relation to goods of a value exceeding Rs.1 lakh. The proceedings initiated by the Competent Authority by issuing the show-cause notice under [SECTION] of [ACT] were different from the proceedings before the Commissioner of Customs (Appeals). Hence, the Appellate Tribunal rightly rejected the petitioner's reliance on the order passed by the revisionary authority.
13. As per [SECTION] of the [ACT] the Competent Authority may, after considering the explanation, if any to the show cause notice issued under [SECTION], and the materials available before it and after giving to the person affected a reasonable opportunity of being heard, by order, record a finding whether all or any of the cri-wp-868-11 properties in question are illegally acquired properties. Whereas [SECTION] of the said Act states that where the competent authority records a finding thereunder to the effect that any properties are illegally acquired properties, it shall declare that such properties stand forfeited to the Central Government free from all encumbrances.
[SECTION] of the [ACT] states that in any proceedings under it, the burden of proving that any property specified in the notice served under [SECTION] is not illegally acquired property shall be on the person affected. Thus after the AP submitted a reply to the show cause notice and tried to defend her case that three immovable properties sought to be forfeited could not be said to be illegally acquired properties on the grounds stated therein i.e. the reply to the show cause notice, the burden of proving those grounds squarely rested on her. For example if she took the defence that she borrowed loan from the Banks or her former husband borrowed the money and she repaid to him or in spite of the divorce he came forward to financially support her, it is imperative for her to explain the sources of these investments and the repayment of loans. Even if the factum of borrowing money from the Banks was proved by her, that by itself will not be sufficient to take the property out of the term "illegally acquired property", unless she cri-wp-868-11 explained the source of money for repayment of the Bank loan. This, in our opinion, is the view correctly taken by both the authorities below.
14. In the case of [PRECEDENT]. [[PRECEDENT], a [ACT] Bench of nine Judge interpreted the definition of "illegally acquired property"
under [ACT] in the following words, "The definition of "illegally acquired properties" is Clause
(c) of Section 3(1) of [ACT] is undoubtedly quite wide.
It means and includes `any property acquired by such person, whether before or after the commencement of this Act, wholly or partly out of or by means of any income, earnings or assets derived or obtained from or attributable to any activity prohibited by or under any law for the time being in force relating to any matter in respect of which Parliament has power to make laws' (vide sub-clause (i).
Sub-clauses (ii), (iii) and (iv) of Clause (c) further widen and elaborate its ambit. The definition thus takes in not cri-wp-868-11 only the property acquired after the Act but also the property acquired before the Act, whatever be the length of time. Secondly, it taken in property which may have been acquired partly from out of illegal activity in which case, of course, the provision in [SECTION] would be attracted.
Illegal activity is not confined to violation of the laws mentioned in [SECTION] but all laws which the parliament has power to make "
In the case of Kesar Devi v. [ENTITY] and ors [(2003) 7 SCC 427] the Supreme Court stated, " The combined effect of [SECTION] and [SECTION] is that the competent authority should have reason to believe (which reasons have to be recorded in writing) that properties ostensibly standing in the name of a person to whom the Act applies are illegally acquired properties, he can issue a notice to such a person. Thereafter, the burden of proving that such property is not illegally acquired property will be upon the person to whom notice has been cri-wp-868-11 issued "
In the case of [PRECEDENT], the Supreme Court stated, "22. Once the notice to show cause is found to be satisfying the statutory requirements which are condition precedent therefor, a valid proceeding can be said to have been initiated for forfeiture of the property. Only in a case where a valid proceeding has been initiated, the burden of proof that any property specified in the notice is not illegally acquired property, would be on the `person' affected."
23. Before, however, an order of forfeiture can be passed, the Competent Authority must not only comply with the principles of natural justice, he is also required to apply his mind on the materials brought before him. It is also necessary that a finding that all or any of the properties in question were illegally acquired properties is cri-wp-868-11 recorded."
15. We proceed, therefore, to test the impugned orders on the backdrop of the above stated well settled legal principles and examine each of the three properties acquisitions:
Flat No.B-17, B-Wing of Sai Milap CHS Ltd.: As noted earlier AP's father Shri [ENTITY] vide his letter dated 6[CASE NUMBER]5[CASE NUMBER]2002 had stated that this flat was purchased vide agreement dated 10[CASE NUMBER]10[CASE NUMBER]1987 by Dr. [ENTITY] in the name of AP for a total consideration of Rs.
1,60,000[CASE NUMBER]- and an amount of Rs.35,000[CASE NUMBER]- was paid on the day of the agreement through two different cheques, one drawn on State Bank of India, Kandivali Mumbai and the other drawn on Karnataka Bank Ltd., Kandivali (West), Mumbai. The balance of Rs.1,25,000[CASE NUMBER]- was claimed to have been paid by Dr. [ENTITY] from State Bank of India, Nariman Point. It was also claimed that Dr. [ENTITY] was in Libya from July 1980 to May 1987 and the AP and Dr. [ENTITY] were married on 14[CASE NUMBER]12[CASE NUMBER]1985 and their marriage was dissolved by way of a decree of divorce on 4[CASE NUMBER]4[CASE NUMBER]1998. Thus money in the account with State Bank of India, Nariman Point was claimed to have been transferred by cri-wp-868-11 Dr.[ENTITY] from Libya (Tripoli). Both the authorities below have accepted that cheque no. 471827 dated 10[CASE NUMBER]10[CASE NUMBER]1987 for an amount of Rs.
25,000[CASE NUMBER]- from State Bank of India, Kandivali Branch and another cheque bearing no.268231 dated 10[CASE NUMBER]12[CASE NUMBER]1987 fro Rs.10,000[CASE NUMBER]- was drawn on Karnataka Bank, Kandivali Branch and the said payment was received by the builder by way of initial payment for purchase of the flat. As per certificate dated 27[CASE NUMBER]12[CASE NUMBER]2010 issued by SBI, Kandivali Branch an NRE A[CASE NUMBER]c. No.16312 was opened on 17[CASE NUMBER]2[CASE NUMBER]1987 in the names of [ENTITY] and [ENTITY]. It wasfurther certified that cheque book containing cheque nos.471826 to 471850 was issued on 9[CASE NUMBER]10[CASE NUMBER]1987. It was also certified that transaction details for February 1987 to March 1988 in the said account were not available. However, both the authorities agreed that it could be inferred in favour of AP that she paid an amount of Rs.25,000[CASE NUMBER]- from the NRE Account jointly held with her husband as in October 1987. However, so far as Karnataka Bank account was concerned, the AP's father 21[CASE NUMBER]4[CASE NUMBER]2003 had stated that it was a saving bank account in her name and it was opened prior to her marriage but he did not explain as to how the money was accumulated in this account and thus the source of investment of Rs.10,000[CASE NUMBER]-
remained unexplained. We do not find any fault with this finding as cri-wp-868-11 well.
Out of the balance amount of Rs.1,25,500[CASE NUMBER]- it was claimed that Rs.70,000[CASE NUMBER]- was invested out of the NRE Account in SBI Nariman Point and the only evidence in support of this was the certificate dated 24[CASE NUMBER]12[CASE NUMBER]2010 from the State Bank stating that Dr. [ENTITY] and [ENTITY] had opened NRE Account No.SBI[CASE NUMBER]NRE[CASE NUMBER]425 on 8[CASE NUMBER]12[CASE NUMBER]1989 and that the transaction details of the said account from 1989 to 1994 were not available. As per the agreement the initial investment of Rs.35,000[CASE NUMBER]-, the investment of Rs.66,000[CASE NUMBER]- was to be paid by 10[CASE NUMBER]11[CASE NUMBER]1987, Rs.45,500[CASE NUMBER]- was to be paid by 10[CASE NUMBER]12[CASE NUMBER]1987 and the balance amount of Rs.15,000[CASE NUMBER]- was to be paid to the builder at the time of delivery of the flat. There was nothing to show that the subsequent payments were not made as per this schedule mentioned in the agreement and at the same time NRE account in SBI, Nariman Point Branch came to be opened on 8[CASE NUMBER]12[CASE NUMBER]1989 and if that be so, the instalments of Rs.66,000[CASE NUMBER]- and Rs.45,500[CASE NUMBER]- could not have come from the said account as claimed by the AP's father. There was not even a confirmation from Dr. [ENTITY], the AP's ex husband that he had made the payments of Rs.10,000[CASE NUMBER]-, Rs.66,000[CASE NUMBER]-, Rs.45,500[CASE NUMBER]- and Rs.15,000[CASE NUMBER]-
cri-wp-868-11 out of his explained income to his then wife or the builder for the purchase of the said flat. In addition there was no explanation for the remaining amount of Rs.55,500[CASE NUMBER]- after the AP's father tried to explain the payment of Rs.70,000[CASE NUMBER]- in the above manners. Thus the AP could at the most prove the payment of Rs.25,000[CASE NUMBER]- out of the total consideration for this flat of Rs.1,60,500[CASE NUMBER]- and the remaining payments could not be explained, leave alone, a satisfactory explanation. We, therefore, hold that the findings recorded by both the authorities below about this flat do not suffer from any error.
16. Flat Nos.1105 and 1106, 11th floor, Building No.B-29, Silver Arch : In respect of these flats the AP had submitted her reply on 20[CASE NUMBER]2[CASE NUMBER]2007 and stated that these flats were purchased as per the agreements dated 12[CASE NUMBER]7[CASE NUMBER]2000. Flat No.1105 was purchased from Smt. [ENTITY] for a total consideration of Rs.14,33,500[CASE NUMBER]- and Flat No.1106 was purchased from Shri [ENTITY] for a total consideration of Rs.22,09,000[CASE NUMBER]-. Payments for both these flats were claimed to have been made as under:
cri-wp-868-11 Details Flat No.1105 Flat No.1106 Initial payment Rs.2,15,000 Rs.3,31,400 Second payment Rs. 46,000[CASE NUMBER]- Rs. 47,000[CASE NUMBER]-
Balance Rs.11,72,500[CASE NUMBER]- Rs.18,30,600[CASE NUMBER]-
The AP had taken loan of Rs.33.12 lakhs from HDFC to pay the balance consideration to [ENTITY]. The record showed that the AP had paid a total amount of Rs.40,08,285[CASE NUMBER]- towards the repayment of this loan obtained for the above flats, along with interest till 21[CASE NUMBER]3[CASE NUMBER]2006 and the details of these payments were shown as under:
SN Date of Payment Cheque[CASE NUMBER]DD Amount (Rs.) Bank 1 26[CASE NUMBER]7[CASE NUMBER]2000 DD 10227386 14,750[CASE NUMBER]- SBI, Overseas Branch 2 22[CASE NUMBER]1[CASE NUMBER]2001 Ch 493257 1,22,878[CASE NUMBER]- SBI Kandivali (W) 3 27[CASE NUMBER]9[CASE NUMBER]2004 DD 177147 20,00,000[CASE NUMBER]- SBI, Jaipur 4 12[CASE NUMBER]4[CASE NUMBER]2005 DD 602629 5,00,000[CASE NUMBER]- SBI, Mumbai Central 5 26[CASE NUMBER]5[CASE NUMBER]2005 Ch 313979 5,00,000[CASE NUMBER]- Citi Bank, Mumbai 6 07[CASE NUMBER]10[CASE NUMBER]2005 5,00,000[CASE NUMBER]- Cash payment 7 10[CASE NUMBER]01[CASE NUMBER]2006 Ch 313978 3,70,657[CASE NUMBER]- Citi Bank, Mumbai Total 40,08,285[CASE NUMBER]-
The AP had further claimed that an amount of Rs.20,00,000[CASE NUMBER]- out of Rs.
40,08,285[CASE NUMBER]- was paid by her former husand Dr. [ENTITY] to HDFB from his SBI, Jaipur Branch vide [CASE NUMBER] dated 27[CASE NUMBER]9[CASE NUMBER]2004. She also claimed that she was working as Managing Director of a firm by cri-wp-868-11 name [ENTITY] and she was drawing monthly salary of Bahraini Dinar BD 1400 as on 13[CASE NUMBER]3[CASE NUMBER]2000. She also stated that the repayment of loan amount of Rs.20,00,000[CASE NUMBER]- to HDFC was supported from the cheque payments of Rs.15,00,000[CASE NUMBER]- (4[CASE NUMBER]5[CASE NUMBER]2006) and from CBEC for Rs.61,60,992[CASE NUMBER]- (8[CASE NUMBER]5[CASE NUMBER]2006).
The date of obtaining the loan from HDFC and the dates of balance payments to the sellers were not furnished though it was noted that these payments were made in October 2000 itself i.e. within four months of purchase of the flats and that too when the AP was apprehended with undeclared foreign exchange equivalent to 70.54 lakhs. She had furnished the explanation that she had brought the foreign currency to buy flats but the deal could not go through. This explanation was contrary to the sources of funds as sought to be explained in the reply submitted by the AP on 20[CASE NUMBER]2[CASE NUMBER]2007. Regarding the loan amount repaid to the HDFC, the documents produced in the appellate proceedings indicated that an NRO account in State Bank of India, Jaipur in the name of Dr. [ENTITY] was opened on 19[CASE NUMBER]8[CASE NUMBER]2004 and the following three transfers were made in the said account:
cri-wp-868-11 (1) Cheque No.01590007083 : Rs.9,60,000[CASE NUMBER]-
(2) Cheque No.0159000708300 : Rs.4,40,000[CASE NUMBER]-
(3) Cheque No.01192007083 : Rs.6 05,000[CASE NUMBER]- Total : Rs.20,05,000[CASE NUMBER]-
All these three transfers were credited to this account on 22[CASE NUMBER]9[CASE NUMBER]2004 and on the same day an amount of Rs.20,03,750[CASE NUMBER]- was debited to to the same account for issuance of draft favouring HDFC Ltd. for Rs.20,00,000[CASE NUMBER]- leaving a balance of Rs.1250[CASE NUMBER]-. There were no other transactions in the said account except two entries of credit of Rs.
7.66 and Rs.15.41 in January 2005 and July 2006 respectively. It was not explained as to why the amount of Rs.20,00,000[CASE NUMBER]- was paid from the account to Dr.[ENTITY] to the AP and there was no confirmation from Dr.[ENTITY] that he had paid Rs.20,00,000[CASE NUMBER]- to his former wife. There was no further explanation for the transfer of these three credit entries in his Bank account and it was not known whether the transfers in the NRO account were arranged by AP herself to utilise the said amount as cri-wp-868-11 conduit for making the payment of Rs.20,00,000[CASE NUMBER]- to HDFC Ltd. It is also clear from the record that these payments were made after the first show cause notice was received by the AP and obviously when the forfeiture proceedings were pending and even the detention order under the [ACT] was not revoked. Despite this, the AP could not explain the source of Rs.20,00,000[CASE NUMBER]- and thus she failed to discharge the burden cast on her. Under these circumstances no fault could be found with the concurrent view that the source of investment to the extent of Rs.20,00,000[CASE NUMBER]- remained unexplained and had represented tainted money invested by her.
The record also indicated that another payment of Rs.
5,00,000[CASE NUMBER]- was made to HDFC by cash on 7[CASE NUMBER]10[CASE NUMBER]2005 but the source of this cash payment was not explained. Further an amount of Rs.
5,00,000[CASE NUMBER]- was claimed to have been paid by cheque no. 313979 dated 26[CASE NUMBER]5[CASE NUMBER]2005 drawn on Citi Bank, Mumbai. The statement of the said account went to show that it was an NRE account opened in September 2004 and two transfers were received viz. Rs.23,959=59 and Rs.
4,98,200[CASE NUMBER]- in September 2004 and May 2005 respectively. The sources of these credit entries remained unexplained. Cheque no.313979 for cri-wp-868-11 Rs.5,00,000[CASE NUMBER]- was debited to the said account on 28[CASE NUMBER]5[CASE NUMBER]2005 and this being an NRE account funds could come only in the form of foreign currency. Another amount of Rs.3,70,657[CASE NUMBER]- was debited to City Bank and paid to HDFC Bank in January 2006 but the cheque was not cleared as there was insufficient balance and the amount was again credited to Citi Bank account on the same day. Thus the explanation that Rs.3,70,657[CASE NUMBER]- was paid to HDFC out of Citi Bank could not be proved. In addition another cheque for Rs.61,439[CASE NUMBER]- was issued in favour of HDFC Bank but it was also returned as there was no sufficient balance in the said account.
A further sum of Rs.5,00,000[CASE NUMBER]- was claimed to have been paid to HDFC on 12[CASE NUMBER]4[CASE NUMBER]2005 out of SBI, Bombay Central Branch by a Demand Draft and to justify this statement of account no.01190025772 in the joint names of [ENTITY] and [ENTITY] in State Bank of India, Mumbai Central Branch was furnished for the period 6[CASE NUMBER]3[CASE NUMBER]1999 to 1[CASE NUMBER]12[CASE NUMBER]2004. The entry of this amount of Rs.
5,00,000[CASE NUMBER]- did not find place in the said account as it was claimed to have been paid in April 2005. Thus the source of investment to the extent of Rs.5,00,000[CASE NUMBER]- also remained unexplained. The further cri-wp-868-11 payment of Rs.1,22,878[CASE NUMBER]- was claimed to have been made in January 2001 from SBI, Kandivali (West) Branch as reflected in the account furnished but it was noticed that it is an NRE account in the name of the AP and the payment Rs.1,22,878[CASE NUMBER]- was preceded by a credit entry of Rs.1,24,000[CASE NUMBER]- representing an international MICR cheque drawn on SBI. The AP could not furnish any explanation of this credit entry and, therefore, the source of investment of Rs.1,22,878[CASE NUMBER]- also remained unexplained. The payment of Rs.14,750[CASE NUMBER]- to HDFC by demand draft dated 26[CASE NUMBER]7[CASE NUMBER]2000 issued from SBI Overseas Branch was also claimed to have been made but the source of the said amount was not furnished.
17. Thus the substantial payments made to HDFC for refund of loan in respect of these two flats remained unexplained and, therefore, the competent authority held that the substantial investments made for these properties remained unexplained warranting the action of forfeiture of the properties. The appellate tribunal rightly confirmed these findings.
18. The AP tried to explain these investments by relying upon the arrival of Shri [ENTITY], her second husband, to India cri-wp-868-11 and the money brought by him in terms of the foreign currency. The record showed that he arrived in India for the second time on 13[CASE NUMBER]7[CASE NUMBER]2005 and departed on 22[CASE NUMBER]7[CASE NUMBER]2005. He had declared an amount of 35,000[CASE NUMBER]-
Pound Sterling in cash on his arrival at the airport and another declaration form dated 16[CASE NUMBER]3[CASE NUMBER]2005 was filed to show that he had declared 14,000 Pound Sterling at the time of arrival in March 2005 and that he was to leave on 22[CASE NUMBER]3[CASE NUMBER]2005 but there was nothing to link these two currency declaration forms with any of the payments made to HDFC. Therefore, both the authorities below rightly discarded the attempt to link these payments to the payments made to HDFC. The record also indicated that the AP was given two refunds i.e. on 4[CASE NUMBER]5[CASE NUMBER]2006 and 8[CASE NUMBER]5[CASE NUMBER]2006 by the Court of Chief Metropolitan Magistrate and it was an amount of Rs.1,50,000[CASE NUMBER]-. Whereas the loan and interest totally about Rs.40 lakhs was claimed to have been paid to HDFC by March 2006.
On 17[CASE NUMBER]2[CASE NUMBER]2004 a sum of Rs.4,00,000[CASE NUMBER]- was paid by the AP to the Commissioner of Customs as personal penalty as per the Revisional Authority's order dated 29[CASE NUMBER]1[CASE NUMBER]2004 but there was nothing to show from which source this amount was paid by her. The case of the AP was also considered by both the authorities below on the background that she was found in possession of undeclared foreign exchange equivalent to cri-wp-868-11 Rs.70.54 lakhs at the time of her departure from India in October 2000 and she had also admitted that she had brought in foreign exchange without the declaration which fact established that she had been dealing with substantial amount of undeclared foreign exchange.
19. In our considered opinion, both the authorities below have meticulously examined the record and the explanation furnished by the AP in respect of the investments made for these three flats by her and rightly held that they were the illegally acquired properties.
Consequently the forfeiture made by the competent authority remained in tact and could not be faulted on any ground. These concurrent findings on assessment of the documentary evidence vis-a-vis the explanation furnished by the AP did not suffer from any infirmities and, therefore, there is no case made out to call for interference in the same and to take any different view, in the instant petition. Hence this petition must fail and the same is hereby dismissed.
20. Rule is discharged.
([ENTITY], J.) ([ENTITY], J.) cri-wp-868-11
Mr.[ENTITY] made an oral application to continue the order of status quo passed earlier by this Court on 28[CASE NUMBER]4[CASE NUMBER]2011. Mr.[ENTITY], the learned standing counsel has opposed the prayer. We have noted that the three flats which is the property under forfeiture are not in occupation of the petitioner as of now and she is staying in a foreign country. In the peculiar facts of this case, we, therefore, direct the competent authority not to take any steps for the disposal of the forfeited property for a period of eight weeks from today.
([ENTITY], J.) ([ENTITY], J.)