IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED :-29.09.2010 Coram The HONOURABLE MR.M.Y.EQBAL THE CHIEF JUSTICE and The HONOURABLE MR. JUSTICE T.S.SIVAGNANAM W.A.No.1422 of 2009 & M.P.Nos. 1 & 2 of 2009 S.Usha Selvi ... Appellant/Petitioner vs. 1. The Competent Authority, 'Utsav' No:64/1. G.N.Chetty Road, T.Nagar, Chennai – 600 017. 2. The District Collector, Madurai District, Madurai. 3. Smt.K.Muthulakshmi 4. Smt.K.Ananthavalli .. Respondents/Respondents PRAYER : Writ appeals filed under clause 15 of the letter patent against the order dated 12.08.2008 made in W.P.No.15017 of 1999, filed under article 226 of the constitution of India praying for the issuance of a writ of certiorari calling for the records of the first respondents order NO.F.OCA/MDS/2843/93, dated 10.8.99 and quash the same. For Appellant : Mr. A.Mohammed Ismail for Mr.R.R.Thamothararaj For Respondents : Mr.J.Ravindran for R1 Mr.J.Raja Kalifullah Govt. Pleader for R2 Mr.Canscious Elango for R4 No appearance for R3 https://hcservices.ecourts.gov.in/hcservices/ O R D E R THE HON'BLE THE CHIEF JUSTICE & T.S.SIVAGNANAM,J. The writ petitioner is the appellant and the appeal is directed against the order made in W.P.No.15017 of 1999, dated 12.08.2008. 2. The matter arises under the provisions of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (for short the "Act"). 3. The appellant purchased an immovable property in Door No.16G/1B, Jaihindpuram, Nehru Street, Madurai-11 (hereinafter referred to as the 'Property'), from the fourth respondent herein by means a registered sale deed, dated 01.02.1999. The fourth respondent had earlier purchased the property from the third respondent by sale deed dated 06.03.1995. It appears that a notice dated 04.11.1993 was issued under Section 6(1) of the Act, giving notice of forfeiture of the said property and the notice was issued to the third respondent, who is the wife of one Mr.V.Karuppaiah. This notice of forfeiture culminated in an order of forfeiture passed under Section 7 of the Act, by order dated 25.02.1999. Thereafter, the first respondent herein issued an order dated 10.08.1999, under Section 19(1) of the Act, calling upon the appellant to surrender/deliver possession of the property within 30 days from the date of receipt of the notice to the District Collector, Madurai under intimation to the first respondent. This order under Section 19(1) dated 10.08.1999 was challenged in the writ petition. 4. The learned single Judge after referring to the various provisions of the Act including Section 11 held that the sale transaction in favour of the appellant was hit by Section 11 of the Act and no right accrues to the appellant and accordingly, dismissed the writ petition. It is as against the dismissal of the writ petition, the present appeal has been filed. 5. The learned counsel appearing for the appellant would strenuously contend that the notice dated 10.08.1999 did not disclose any reason as to why action is taken against the property and therefore the notice is without application of mind. Further, the learned counsel would submit that in the counter affidavit filed in the writ petition, the first respondent did not mention as to on what date the notice dated 04.11.1993, issued under Section 6(1) of the Act, was served on the third respondent and without service of notice on the third respondent, the entire proceedings are vitiated. In support of his contention, the learned counsel placed reliance on the Judgment of the Division Bench of this Court in V.Mohan and another https://hcservices.ecourts.gov.in/hcservices/ Vs. The Income Tax Officer and Ors. 2008 (2) Tamil Nadu Law Notes Journal (Civil). The learned counsel appearing for the fourth respondent supported the case of the appellant. 6. The short issue, which falls for consideration in this appeal is as to whether, the appellant has any right over the property in question, which is subject matter of forfeiture under the Act. The Act was enacted to provide for the forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators and the matters connected therewith or incidental thereto. Section 3 (c) of the Act, defines "illegally acquired property" to mean any property acquired by a person to whom the Act applies either wholly or partly out of the income, earning etc., obtained from the activity prohibited by law, or in cases where there is contravened of a law. 7. In terms of Section 4 of the Act, there is a prohibition of holding any illegally acquired property either by the person himself or any other person on his behalf and if such property is held, it shall be liable to be forfeited to the Central Government in accordance with the provisions of the Act. Section 6 deals with notice of forfeiture, if the competent authority has reason to believe that the property is illegally acquired property, he may serve a notice on the person to indicate the source of income earnings etc and to show cause as to why, the property should not be declared to be a illegal acquired property and forfeited to the Central Government. 8. In the instant case, a notice under Section 6(1) was issued to the third respondent on 04.11.1993. It appears that there was no challenge to the said notice and the third respondent did not appear in the writ petition as well as in this appeal. Admittedly, the appellant purchased the properties much after the notice, that is on 01.02.1999 from the fourth respondent, who is said to have purchased the property from the third respondent on 06.03.1999. Prima facie such transaction is hit by Section 11 of the Act. For better appreciation, Section 11 of the Act is extracted hereunder:- 11. Certain transfers to be null and void:- Where after the issue of a notice under section 6 of under section 10, any property referred to in the said notice is transferred by any mode whatsoever such transfer shall, for the purposes of the proceedings under this Act, be ignored and if such property is subsequently forfeited to the Central Government under Section 7, then, the transfer of such property shall be deemed to be null and void." 12. From a perusal of the aforesaid provision, it is manifest that Section 11 of the Act, after notice issued under Section 6 or Section 10, if any property referred to in the notice is transferred by any mode whatsoever such transfer for the purposes of the https://hcservices.ecourts.gov.in/hcservices/ proceedings under the Act shall be deemed to be null and void. In such circumstances, no right accrues either to the third respondent, the appellant's vendor or to the fourth respondent on account of their purchaser and those transactions are null and void and non-est in law. Thus, the learned single Judge, rightly dismissed the writ petition. 13. In our opinion, the Judgment of the Division Bench in the case of V.Mohan, referred supra does not render any assistance to the case of the appellant since on facts, the appellant was not issued the notice under Section 6 (1) of the Act and admittedly, there is no challenge either to the notice issued under Section 6(1) or the order of forfeiture passed under Section 7, dated 25.02.1999 and those proceedings have attained finality. 14. In the result, we find there are no merits in the appeal and it is dismissed. Consequently, connected miscellaneous petitions are closed. No costs. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar pbn To The District Collector, Madurai District, Madurai. 1 cc To The Government Pleader, SR.71839 1 cc To Mr.A.Mohamed Ismail, Advocate, SR.72071 Order in W.A.No.1422 of 2009 GG (CO) RH (12.10.10) https://hcservices.ecourts.gov.in/hcservices/