1 pdp IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE CRIMINAL WRIT PETITION NO. 2312 OF 2008 WITH CRIMINAL APPLICATION NO. 158 OF 2009 Aslam Mohammed Merchant ..Petitioner Vs. 1. Competent Authority Under the Narcotic Drugs & Psychotropic Substances Act, 1985 and ors. ..Respondents Mr. Adhik Shirodkar, Senior Advocate, Mr. Nihar Ghag, Mr. Girish Pikale, Mr. Dewart Dhankar, Mr. Mayur Shanbhag i/by S.V. Pikale and Co. for petitioner. Mr. J.C. Satpute for respondent no.1. Mr. H.V. Mehta for respondent no.2. Mr. P.A. Pol, In-Charge PP for respondent no.3. CORAM: B. H. MARLAPALLE & SMT. ROSHAN DALVI, JJ. Reserved on : August 07, 2009. Pronounced on : August 12, 2009. ORDER (Per B.H. Marlapalle,J.). 1. Heard Mr. Adik Shirodkar, the learned Senior Counsel with Mr. Pikale for the petitioner. Mr. Satpute appears for the Union of India. 2. This petition filed under Article 226 of the Constitution of India impugns the 2 show cause notice dated 15/9/2008 issued to the petitioner under Section 68-H of the Narcotic Drugs and Psychotropic Substances Act, 1985 (for short the NDPS Act) by the competent authority i.e. Respondent no.1. The main challenge is on the ground that a similar show cause notice was issued on 17/12/1999 and the competent authority had forfeited the properties on 28/9/2001. This order was challenged by filing an appeal before the Appellate Tribunal for Forfeited Properties at New Delhi and it was dismissed on 26/7/2002. Criminal Writ Petition No. 1095 of 2002 filed before this court challenging the order passed by the Tribunal also came to be dismissed on 27/11/2002 and thereafter the petitioner had approached the Supreme Court in Criminal Appeal No. 1057 of 2003 which has been allowed on 8/7/2008. The petitioner claims that the Supreme Court was pleased to quash and set aside the show cause notice dated 17/12/1999 and the impugned show cause notice has been issued on the very same grounds and in respect of the very same properties. It is the contention of the petitioner that in view of the law laid down by the Supreme Court in Criminal Appeal No. 1057 of 2003, the competent authority is estopped from issuing any show cause notice and in any case as per the requirements laid down by the Supreme Court in the very same order i.e. Aslam Mohd. Merchant vs. Competent Authority and ors. [2008 (10) SCALE 383], the show cause notice could not have been issued and the impugned notice is in breach of and in utter disregard to the said order. The competent authority has filed affidavit-in-reply and has opposed the petition. It has been stated by the competent authority that the Supreme Court had granted liberty to issue a fresh show cause notice and accordingly the available material on record was re-examined and a fresh show cause notice has been issued which complies with the requirements as set out in para 20 of the Judgment of the Supreme Court in Aslam’s case (Supra). 3 3. On 15/12/2008 this court had allowed the inquiry to proceed pursuant to the impugned show cause notice. It appears the same order was challenged before the Supreme Court but in vain. As the inquiry was allowed to be continued, the competent authority passed an order on 22/5/2009 under Section 68-R of the NDPS Act and summoned the petitioner to appear before him on 8/6/2009 along with all the relevant documents showing the ownership of the properties as set out in the show cause notice and the legal sources of investment made for acquiring the said properties, the income tax/wealth tax returns, if any, filed and assessment order etc. for the relevant period and for recording petitioner’s statement in connection or relating to these properties. It was also clarified that it was the third summons issued to the petitioner and in case the petitioner failed to appear before the competent authority, as directed, necessary action under the provisions of IPC would be initiated. By filing Criminal Application No. 158 of 2009, the petitioner prayed to stay the said notice and as there was no stay granted, the competent authority issued the subsequent notice on 15/6/2009 calling upon the petitioner to appear before him on 3/7/2009. 4. The short point for our consideration is, whether the impugned show cause notice could have been issued and whether it meets the requirements of law as set out in Aslam’s case (Supra) by the Supreme Court. In Aslam’s case, the Supreme Court in para 45, while setting aside the show cause notice dated 17/12/1999 and allowing the appeals, held that it would be open to the respondents to initiate fresh proceedings in accordance with law, if they are so advised. It is thus clear that the competent authority was not estopped from initiating fresh proceedings so long as such proceedings are in 4 accordance with law. 5. In para 20, 21 and 22 of the judgment in Aslam’s case, the Supreme Court stated as under:- “20. Before, however, the actual order of forfeiture of such illegally acquired property is passed, issuance of a notice to show cause is essential so as to fulfill the requirements of natural justice. Such a notice is to be issued by the Authority having regard to: (i) The value of the property held by the person concerned, (ii) His known source of income, earning or assets, (iii) Any other information or material made available as a result of a report from any officer making an investigation under Section 68-E of the Act or otherwise. 21. When the aforementioned conditions are satisfied, the competent authority would be entitled to issue a show cause notice, if he has reason to believe, wherefore reasons are to be recorded in writing that the properties are illegally acquired properties. 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 5 valid proceeding has been initiated, the burden of proof that any property specified in the notice is not illegally acquired property, would be one the `person’ affected.” 6. We have noted that in the show cause notice dated 17/12/1999, which came to be set aside by the Supreme Court, it concluded with para 16 which read as under: “ Whereas considering the above and the background of AP1 and his involvement in drug smuggling & in drug trafficking on a massive scale and also the fact that AP2 to AP11 have no source of legal income of their own by means of which they could have acquired such huge and valuable properties mentioned hereinbefore, I have reason to believe that the said properties and assets as mentioned in para 14 have been acquired from the illegal income or source generated or earned by AP1 through or out of drug trafficking and have to be considered as illegally acquired property as defined under sub-section (g) of of Section 68-B of the NDPS Act.” However, when the impugned notice was issued, the competent authority annexed thereto Annexure “A” for recording reasons so as to establish the nexus for issuing notice under Section 68-H(1) of the NDPS Act and para 3, 4 and 5 of the said Annexure stated as under:- “3. It is an admitted fact that some of the relatives of Mr. Iqbal Mohd. Memon had taken huge amount of loan from him. In statements recorded and 6 submissions made before the Competent Authority during the course of forfeiture proceedings, Smt. Hajira Memon (wife of AP-1), Smt. Zaibunnissa Memon (sister of AP-1) andSmt. Nazma Aslam Merchant (AP-1’s brother’s wife) who fell within the definition of relatives as given in the Act, had admitted that they had received Rs.54,30,000/-, Rs. 5,10,000/- and Rs. 2,80,000/- respectively as a loan from Mr. Iqbal Mohd. Memon and the said amounts were invested to acquire various properties as proposed to be forfeited under the NDPS Act. There is nothing on the record to show that aforementioned loan or any part of the loan given to relatives were out of the legal income of Mr. Iqbal Mohd. Memon. Further it is also seen that Shri Aslam Merchant (brother of AP-1) had received huge amount of remittance from Dubai amounting to Rs.22 lakhs without giving any details about the legal sources out of which these remittances were received and this amount is said to have invested in the property held through M/s. Greenwood Holdings (P) Ltd. Similarly, Shri Arif Memon (brother in law) had received a sum of US $ 38000 from Dubai which in turn was invested in the business M/s. Roshan Talkies. In both the cases origin of remittance was Duabi were Mr. Iqbal Mohd. Memon was hiding during the period and was conducting the traffic in narcotic drugs, as discussed in the detention order, therefore, illegal money appears to have been routed through foreign country to give the colour of legal income. 4. It is interesting to see that all the properties held by Mr. Iqbal Mohd. Memon in his name or in the names of his relatives or associates as proposed to be forfeited, were acquired during the period 1990-93 when he was fully 7 involved in narcotic drug trafficking and his relatives have failed to produce any evidence to show that such properties were acquired by them from their legal sources of income. The submission of Mr. Iqbal Mohd. Memon that he had received a reward of Rs.1.10 crores during the period 1989-93 and Shri Aslam Mohd. Merchant had received a reward of Rs.60 lakhs which was used to acquire the aforesaid properties cannot be accepted as there is evidence on record to show that the large number of properties acquired by Mr. Iqbal Mohd. Memon as well as by his relatives had alrady been released by various authorities, on this ground. Further there is no direct evidence to show that aforesaid amount received from the department as reward was actually used to acquire the properties listed in the show cause notice or part of it was given as loan to his various relatives, which was further used to acquire the properties. Till date, neither Mr. Iqbal Mohd. Memon nor his relatives had produced any evidence to show that the properties proposed to be forfeited were acquired from their legal sources of income. 5. Further, there is nothing on record to show that all the relatives had any independent income of their own and while some of the relatives had some independent income it was not sufficient to acquire these properties. The income tax returns and statements of account of the affected persons as available on record show that these returns were not filed regularly and most of the returns were filed together under the amnesty scheme declared by the Income tax Department, as such it can be reasonably presumed that the income tax returns were filed purposefully with a clear intention to make illegal income as legal 8 income. The statements of accounts and balance sheets were erected without the support of the concurrent books of accounts and as such do not possess any legal value to prove the source of legal income. Even otherwise also as per section 68W of the NDPS Act, such evidence cannot be accepted as conclusive evidence under the proceedings under Chapter VA of NDPS Act, therefore, Aps are required to produce the independent evidences. The amnesty given by the income tax authority is sufficient to give the illegal income a legal face for the sake of proceedings under the Income Tax Act, the said protection is not available for the purpose of proceedings under the NDPS Act as held by the Hon. Supreme Court in the case of Tekchand Vs Competent Authority, in his order dated 31/03/1993.” 7. It was pointed out by Mr. Shirodkar that after the appeal filed by the petitioner was allowed by the Supreme Court on 8/7/2008, the impugned show cause notice came to be issued and thereafter the competent authority had approached the Supreme Court with a Review Petition ( Review Petition (CRI.) Nos. 88-92 of 2009) and the same came to be dismissed on 19/3/2009. Mr. Shirodkar, therefore, submitted that there was no authority in law left to the competent authority to issue a second or fresh show cause notice in respect of the very same properties and in any case the impugned notice failed to establish a nexus or a link between the properties sought to be forfeited and the income or assets or properties which were illegally acquired by the person concerned. He also referred to the observations made by the Apex Court in para 26 of its judgment and pointed out that even before the Supreme Court, there was no new material that was brought on record by the competent authority and, therefore, the impugned notice has 9 been issued in the absence of any such material. 8. We are not impressed by these submissions made on behalf of the petitioner. The statement of reasons annexed to the show cause notice and marked as Annexure “A” in para 3 to 5, as reproduced hereinabove, clearly meets the requirements, as set out by the Supreme Court, while issuing a fresh notice and it has been issued having regard to the (a) value of the property held by the person concerned, (b) his known source of income, earning or assets and (c) any other information or material made available as a result of a report from any officer making an investigation under Section 68-E of the Act or otherwise. It has been pointed out in the affidavit-in-reply by the competent authority that though there was material available on record while issuing the original notice dated 17/12/1999, the competent authority had kept in mind the law laid down in the case of Attorney General for India & ors. vs. Amratlal Prajivandas and ors. [(1994) 5 SCC 54] and did not set out the details establishing the nexus between the property sought to be forfeited and the income illegally acquired by the person concerned. The said material was re-examined after the Supreme Court rendered its judgment on 8/7/2008. Though the notice states that it has been issued as per the directions of the Supreme Court, it is clear that the competent authority was at liberty to initiate fresh proceedings and that has been done by setting out detailed reasons which will meet the parameters set out by the Supreme Court while issuing a show cause notice under Section 68-H(1) of the NDPS Act. In any case, even by the subsequent show cause notice the petitioner has been called upon to furnish all the details of the earnings, income, income tax returns, gold transactions etc. and it cannot be accepted that the competent authority was estopped from issuing fresh show cause notice. Such a liberty was specifically granted by the 10 Supreme Court to the competent authority and the show cause notice has not been issued mechanically. The material on record has been considered and detailed reasons have been set out so as to establish a nexus, at least prima facie, between the property sought to be forfeited and the income or assets or properties which were illegally acquired by the persons concerned. 9. Hence, this petition must fail at the threshold and the same is hereby rejected summarily. The petitioner to appear before the Competent Authority on 17/8/2009 and is at liberty to furnish all the details/documents as set out in the subsequent notice dated 22/5/2009 and 15/6/2009. The competent authority shall hear the petitioner and consider the law laid down by the Supreme Court in Aslam’ case while passing the final order about the forfeiture of the property or properties. 10. Criminal Application No. 158 of 2009 does not survive and shall stand disposed as such. (SMT. ROSHAN DALVI,J.) (B.H. MARLAPALLE,J.) Oral application for stay of this order for four weeks is hereby rejected. (SMT. ROSHAN DALVI,J.) (B.H. MARLAPALLE,J.)