IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.SIRI JAGAN THURSDAY, THE 21ST MAY 2009 / 31ST VAISAKHA 1931 OP.No. 13351 of 1999(M) PETITIONER(S): 1. P.C. RUKKIYA, W/O. N.K. KUNHAVARU, HILAL MANZIL, PUTHULLI P.O., THRISSUR DIST. 2. P.C. MOHAMMED MUNEER, S/O. N.K. KUNHAVARU OF DO. DO. 3. P.C. MAMAR, S/O. KUNHAVARU OF DO. DO. 4. P.C. FATHIMA MOHAMED KUTTY, D/O. N.K. KUNHAVARU OF DO. DO. 5. P.C. SHAMEENA ABDUL SATHAR, D/O. N.K. KUNHAVIRU OF DO. DO. BY ADV. SRI.P.SUKUMARAN NAYAR, SENIOR ADVOCATE SRI.G.UNNIKRISHNON SRI.P.V.RAMESH SHANKAR SRI.G.P.SHINOD SRI.K.JAYAKUMAR RESPONDENT(S): 1. UNION OF INDIA, REP. BY THE SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE & BANKING, NEW DELHI. 2. APPELLATE TRIBUNAL FOR FORFEITED PROPERTY, 4TH FLOOR, LOK NAYAK BHAVAN, KHAN MARKET, NEW DELHI-110 003. 3. COMPETENT AUTHORITYO, SMUGGLERS AND FOREIGN EXCHANGE MANIPULATORS (FORFEITURE OF PROPERTY) ACT, 19796, UTSAV, NO. 64/1, G.N. CHETTY ROAD, T. NAGAR, CHENNAI. ADV. SRI.K.RAMAKUMAR, SCGSC FOR R1 TO 3 SRI.P.S.SREEDHARAN PILLAI, SCGSC FOR R1TO3 SRI.JOHN VARGHESE, ASSISTANT SG FOR R1 & 3 SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR FOR R1 TO R3 THIS ORIGINAL PETITION HAVING BEEN FINALLY HEARD ON 30/03/2009, THE COURT ON 21/05/2009, DELIVERED THE FOLLOWING: PETITIONERS' EXHIBITS: O.P.NO. 13351/1999. ----------------------------------------------------------------- EXT.P1 TRUE COPY OF NOTICE DT. 24-2-1978. EXT.P2 TRUE COPY OF AFFIDAVIT. EXT.P3 REPLY DST. 12-7-1995. EXT.P4 REPLY DT. 7-8-1995 EXT.P5 ORDER DT. 29-9-1995. EXT.P6 ORDER DST.10-9-1998. EXT.P7 MEMORANDUM OF APPEAL DT. 8-1-1996. EXT.P8 COMMON ORDER DT. 17-11-1998. EXT.P9 SALE DEED DT. 11-3-1974. [TRUE COPY] P.S TO JUDGE. S. Siri Jagan, J. =-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-=-= O.P. No. 13351 of 1999 =-=-=-=-=-=-=-=-=--=-=-=-=-=-=-=-=-= Dated this, the 21st May, 2009. J U D G M E N T The petitioners in this original petition are the widow and children of late N.K. Kunhavaru. The said Kunjavaru was the brother of one Moidunni, who was a detenu under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974. On the ground that certain properties standing in the name of Kunhavaru were acquired with the illegal funds of Moidunni, proceedings were initiated against those properties under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, by issuing Ext. P1 notice under Section 6(1) of the said Act. The said Kunhavaru challenged the notice before the High Court of Madras in W.P. No. 4470 of 1978, and obtained a stay of further proceedings . In view of the fact that a batch of cases challenging the constitutional validity of the Act was pending before the Supreme Court, the said writ petition was kept pending. While that writ petition was pending, the said Kunhavaru died on 20-3-1992. In the meanwhile, in the decision of Attorney General for India and Others v. Amratlal Prajivandas and Others, [(1994) 5 SCC 54], the Supreme Court upheld the constitutional validity of the Act. Thereafter, on 18-7-1994, W.P.No. 4470/1998 was disposed of by the High Court of Judicature, Madras holding that since the validity of the Act has been upheld by the Supreme Court, further proceedings pursuant to Ext. P1 may be continued and completed within six months, granting further time to the petitioner in that writ petition to file objections to the show cause notice, apparently without noticing that the petitioner Kunhavaru was no more. 2. Subsequently, the 2nd petitioner herein filed Ext. P3 objections to Ext. P1 notice, which was followed up with Ext. P4 additional objections. However, the same did not find favour with the O.P.. No. 13351/99. -: 2 :- 3rd respondent herein, who is the competent authority under the Act, who passed Ext. P5 order under Section 7(1) of the Act, ordering forfeiture of the 10 items of properties detailed therein to the Government of India. Ext. P6 consequential order under Section 19 (1) of the Act was also passed by the 3rd respondent, requiring the petitioners to surrender those properties. The 5th petitioner herein filed Ext. P7 appeal before the 2nd respondent-Appellate Authority under Section 12 of the Act, which was dismissed by the 2nd respondent by Ext. P8 order. Exts.P5, P6 and P8 orders are under challenge in this original petition. 3. The main contention of the petitioners is that the competent authority has to show link or nexus between the illegal funds of the detenu and the properties proposed to be forfeited to substantiate the belief that the property was illegally acquired and reasons to come to that belief have to be recorded in writing. According to the counsel for the petitioner, when properties of relatives of a detenu are proposed to be proceeded against, the competent authority has to show a connecting link between those properties and the convict/detenu and even if the property is illegally acquired by the relative, without a connecting link between the funds of the detenu and the properties, the reasons for belief regarding which connecting link has to be recorded in writing by the competent authority, a notice cannot be issued under Section 6(1). He points out that in Amratlal Prajivandas's case (supra), the challenge against the provisions of the Act to relatives and associates has been repelled by Supreme Court noting that it is because of the necessity for the competent authority to record such reasons in writing before he can proceed under the Act, sufficient safeguard against arbitrariness has been provided in the Act. The counsel buttresses this argument O.P.. No. 13351/99. -: 3 :- relying on the decisions of the Supreme Court in Fatima Mohd. Amin (Dead) through L.R. v. Union of India [(2003) 7 SCC 436], P.P. Abdulla and another v. Competent Authority and others, [(2007) 2 SCC 510] and Kesar Devi (SMT) v. Union of India and others [(2003) 7 SCC 427]. The counsel argues that Ext. P1 notice does not disclose any such nexus between the detenu and the properties in question and therefore Ext. P1 notice itself is vitiated. On the basis of such a notice, the petitioners cannot be asked to prove that the properties have not been acquired with the illegal funds of the detenu, is the contention raised by the petitioner's counsel. 4. With the help of a counter affidavit, the 3rd respondent seeks to support the impugned orders. According to the Assistant Solicitor General, in Ext. P1 itself it is specifically recorded that for the detailed reasons recorded in the case of Shri. N.K. Moidunni, brother of Kunhavaru, there is reason to believe that the properties have been acquired from the illegal funds of the detenu and the reasons recorded in Moidunni's case are sufficient to show the nexus between the properties and the detenu. The Assistant Solicitor General has also made available for my perusal in Court a copy of the reasons recorded under Section 6(1) of the Act in the case of Moidunni. The Assistant Solicitor general points out that in Kesar Devi's case (Supra), the Supreme Court has held that the requirement for the competent authority to show link or nexus to substantiate the belief that property was illegally acquired is only where the relationship of the convict/detenu with the person holding the property is remote and not where the relationship is close and direct. According to learned Assistant Solicitor General, in this case, the said Kunhavaru being the brother of the detenu, the relationship is close and direct and therefore the requirement under the Act is satisfied by Ext. P1 read O.P.. No. 13351/99. -: 4 :- with the reasons recorded in the case of Moidunni. 5. I have considered the rival contentions in detail. 6. I am of opinion that in view of the specific provisions of Section 6(1) and the Supreme Court decisions cited before me (supra), the legal proposition that the competent authority should record the reasons for the belief that the properties sought to be proceeded against are illegally acquired properties of the convict/detenu in writing cannot be disputed. That being the legal position, all I have to decide is whether that requirement is fulfilled in this case. 7. Some reasons stated to be as required under Section 6(1) are appended to Ext. P1 which are the following: Shri. N.K. Kunhavara is the brother of Sri N.K. Moidunny who was a detenu under the COFEPOSA Act, 1974. Therefore, Shri. Kunhavara is a “relative” within the meaning of Section 2(2) (c) of the Smugglers & Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976. Shri. Kunhavara went to Malaysia prior to 1947 and was till now in Malaysia. He is stated to be now in India. Various properties were acquired by Shri. Moidunny either in his name or in the name of Shri. N.K. Kunhavara. There is a partition on 21.9.1977 according to which, certain properties have been allotted to Shri. Kunhavara. For the details reasons recorded in the case of Shri. N.K. Moidunny brother of Shri. Kunhavara, all these properties would be deemed to have been acquired from the illegal funds. xx xx xx Shri. Kunhavara has also acquired a property in R.S.No. 298 in Orumanayur panchayat (purchased vide doc. No. 827/67 dated. 6.6.1967 – Extent 1.37½ acres) Since there is no evidence for the source of funds for purchase of this property the same would be deemed to have been acquired out of illegal funds. It is seen that a construction has been put-up during 1970 to 1972, in the lands (Item 3 and 4 above) for a sum of Rs. 25,000/-. The source for this is stated to have been the amounts O.P.. No. 13351/99. -: 5 :- remitted to Shri. Moidunny, brother, and which was deposited in the Catholic Syrian Bank, Chowghat. Details of the bank a/c. reveal the following deposits: 7.1.1974 Rs. 25,992.50 9.2.1974 Rs. 4,207.30 Rs.30,199.80 Since the construction was put-up prior to the receipt of this money, the source for the same cannot be related to the remittance. Therefore, the source for the construction of the building would be deemed to have come from the illegal funds. Apart from the above properties, Shri. Kunhavara has also acquired the property at Guruvayur village in Survey No. 246/10, 236/6 and 254/18 being agricultural lands, purchased vide doc. Nos. 379/69 dt. 26-7-1969 and 720/61 dated. 13.5.1961 (Extent 1.09 acres) along with Shri. Moidunny, brother and Mrs. Suhara, W/o. Shri Moidunny. Since there is no evidence for the source of funds for purchase of this property, this would also be deemed to have been acquired out of illegal funds. From the facts mentioned above and considering the properties owned by the person, I am of the opinion that all the properties mentioned above were acquired out of unexplained funds and this is a fit case for the issue of a notice u/s 6(1) of the Act.” (Underlining supplied) I do find some reasons here to connect the properties to the detenu, Moidunni. I further find that the above also refers to the reasons recorded in the case of Moidunni. As I have stated, the Assistant Solicitor General has made available for my perusal the reasons recorded in the case of Moidunni. In the same, it is stated thus: “Shri. Moidunny has acquired a number of properties over the years. In 1973 there was a partition between himself and his brother Shri. N.K. Kunhavaru, Orumarayur, Trichur Dist. (Partition deed No. 793/1977 dt. 21.9.1977). Narration in the partition deed reads as under: “Properties mentioned in the schedules were acquired by us O.P.. No. 13351/99. -: 6 :- jointly or separately by our earnings and these properties have been enjoyed by us till now. As per this deed, the properties shown in Schedules A and B will hereafter belong to the share of Kunjavaru (A schedule) and Moidunny (B schedule).” Shri. Kunhavaru, the elder brother of Shri. Moidunny, is reported to have gone to Malaysia prior to 1947 and Moidunny was also reported to have been in Malaysia from 1952 to 1970. The various properties are alleged to have been acquired by means of income derived in Malaysia. However, there is no proof for having remitted any money to India. There is also no known source of income for Shri. Moidunny in India. Therefore, the acquisition of the various properties would be deemed to have been made by Shri. Moidunny from his illegal funds. The properties that are allotted to the share of Shri. Moidunny, as per the partition deed, are as under. (1) Right, title and interest in property at Orumanayur village, Chowghat Taluq vide document No. 176/65 dt. 16.2.1965: Survey No. 61/7 - 87 cents ) with building ,, 61/14 - 39 cents ) in Ward No.I ) House No.222 (2) Right, title and interest in lands at Orumanayur village, Chowghat Taluk in Survey No. 61/12 – Extent 37 cents – Purchased vide document No. 730/70 dt. 24.9.1970. (3) Right, title and interest in lands at Orumanayur village, Chowghat Taluk in Survey No. 254/10 – Extent 56 cents – purchased vide document No. 163/70 dt. 20.4.1970. (4) Right, title and interest in lands at Orumanayur village, Chowghat Taluk in Survey No. 253/7 – Extent 7 cents – purchased vide document No. 164/70 dt. 20.4.1970. (5) Right, title and interest in building in Survey No. 61/7 of Orumanayur village – Ward No. 1 Door No. 200. Apart from the above, the following property was also acquired by Shri. Moidunny. 1.37½ cents of land at Venkitanga village in Survey No. 298 purchased vide document No. 830/67 dt. 6.6.1967. In addition, another property at Guruvayur village in S. No. 246/10, 253/6 and 254/18, being agricultural lands, purchased vide doc. Nos. 379/69 dt. 26.7.1969 and 720/61 dt. 13.5.1961 (Extent 1.09 acres), is jointly held along with Shri. Kunhavaru and Mrs. Suhara, wife of Shri. Moidunny. For These two properties, as Shri. Moidunny has no legal source of income, the sources should be deemed to have O.P.. No. 13351/99. -: 7 :- come from his illegal funds.” (Underlining supplied) From the same, it is clear that the said Moidunni and Kunhavaru had very intimate transactions in respect of money and property. It is clear that they had put both their individually owned properties and jointly acquired properties in the hotchpot for partition. These are more than sufficient to show real nexus between the illegal funds of the detenu and the properties proceeded against. That being so, I do not find any merit in the contention of the petitioners that the 3rd respondent has not recorded reasons in writing to show link or nexus between the properties and the detenu and for the belief that the property was acquired with the illegal funds of the detenu-Moidunni. 8. Once that statutory requirement is fulfilled, then the onus is clearly on the petitioners to prove that the properties were not acquired with the illegal funds of the detenu. The petitioners have not even attempted to produce any proof whatsoever in that regard. That being so, they have not discharged the onus put on them by the Statute under Section 8 of the Act, without which they cannot succeed in the challenge against the impugned orders. Therefore, I do not find any merit in the original petition. Accordingly, the original petition is dismissed. S. Siri Jagan, Judge. Tds/