Case Note & Summary
The petitioner, Imperial Exim (India) Pvt. Ltd., challenged an order dated 31 March 2011 passed by the Appellate Tribunal for Forfeited Property, New Delhi Camp at Mumbai, which dismissed its appeal against a forfeiture order under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) read with the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act). The property in question was alleged to have been acquired from the proceeds of narcotics trafficking. The petitioner claimed that it had purchased the property through legitimate funds and was a bona fide purchaser for value without notice. The respondents, including the State of Maharashtra and the Competent Authority, argued that the property was traceable to the proceeds of drug trafficking and that the petitioner failed to prove its legitimate acquisition. The court, after hearing arguments, held that the burden of proof under Section 7 of SAFEMA lies on the claimant to show that the property was acquired from lawful sources. The Appellate Tribunal had concurrently found that the petitioner did not discharge this burden. The court found no perversity in the findings and dismissed the writ petition, upholding the forfeiture order. The companion petition by the original claimants was partly allowed, but the main challenge by the company was rejected.
Headnote
A) SAFEMA - Forfeiture of Property - Burden of Proof - Section 7 of SAFEMA - The burden lies on the person claiming ownership to prove that the property was acquired from legitimate sources and not from proceeds of illegal activities. The court upheld the Appellate Tribunal's finding that the petitioner failed to discharge this burden. (Paras 10-25) B) NDPS Act - Forfeiture of Property - Proceeds of Trafficking - Section 68A of NDPS Act - Property acquired from proceeds of narcotics trafficking is liable to forfeiture. The court held that the competent authority correctly traced the property to proceeds of drug trafficking. (Paras 15-30) C) Writ Jurisdiction - Scope of Interference - Concurrent Findings - The High Court in writ jurisdiction will not re-appreciate evidence unless findings are perverse or based on no evidence. The court found no perversity in the Appellate Tribunal's order. (Paras 35-40)
Issue of Consideration
Whether the order of forfeiture of property under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA) read with the Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPS Act) was validly passed against the petitioner company.
Final Decision
Criminal Writ Petition No. 1435 of 2011 dismissed; Criminal Writ Petition No. 121 of 2012 partly allowed in terms of the Appellate Tribunal's order.
Law Points
- Forfeiture of property under SAFEMA
- Burden of proof on claimant to show legitimate acquisition
- Property acquired from proceeds of narcotics trafficking
- Appellate Tribunal's concurrent findings not interfered with in writ jurisdiction
