IN THE HIGH COURT OF DELHI AT NEW DELHI
SUBJECT : SAFEMA
Reserved on : September 13, 2006.
Date of Decision : October 6, 2006
CM No. 13363/2005 in Writ Petition (C) No. 2915/1995
PREM MEHRA (DECEASED) by LRs ..... Petitioners
Through Mr. Kanchan Singh, Advocate.
versus
V.K.BARANWAL, Competent Authority ..... Respondent.
Through Mr.Rajendra with
Mr. R.K.Chawla, Advocate.
Ms. Barkha Babbar for UOI.
AND
Writ Petition (C) No. 2916/1995
PROMILA MEHRA ..... Petitioner.
Through Mr. Kanchan Singh, Advocate.
versus
V.K.BARANWAL, Competent Authority ..... Respondent.
Through Mr.Rajendra with
Mr. R.K.Chawla, Advocate.
Ms. Barkha Babbar for UOI.
CORAM :-
HON'BLE MR. JUSTICE MUKUL MUDGAL
HON'BLE DR. JUSTICE S. MURALIDHAR
: Dr. S. Muralidhar, J.
1. Writ Petition (Civil) 2915/1995 was filed in this Court on 7.8.1995 by Mr.
Prem Mehra seeking a writ of certiorari to quash a notice dated 4.11.1980 issued to
him by the Competent Authority under the Smugglers and Foreign Exchange
Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA). The writ petition also
sought quashing of a notice dated 1.8.1995 issued by the Competent Authority
requiring the petitioner to attend the office of the Competent Authority to give a
statement in the enquiry initiated against him under Section 6(1) SAFEMA.
2. Writ Petition (C) No. 2916/1995 was filed by Mrs. Promila Mehra in this
Court on 8.8.1995 seeking the quashing of a notice dated 1.8.1995 issued to her by
the Competent Authority under the SAFEMA to appear as a witness in the enquiry
against her husband, Shri Prem Mehra, and give a statement. Mrs. Promila Mehra
also challenged the notice dated 4.11.198o issued to her husband Mr. Prem Mehra.
Background Facts
3. Mr. Prem Mehra was detained between 31.8.1976 and 22.3.1977 under the
Conservation of Foreign Exchange and Prevention of Smuggling Activities Act,
1974 ('COFEPOSA'). Mr.Mehra did not challenge his detention. Three years after
his release from detention he was served with a notice dated 4.11.1980 under Section
6(1) of SAFEMA calling upon him to disclose the sources of the income and
earnings or assets out of which the properties mentioned in the Schedule to the notice
(including certain diamonds and foreign currency seized by the Customs) were
acquired by him. He was also asked to show cause why the said properties should not
be declared as illegally acquired properties and forfeited by the Central Government
under the provisions of SAFEMA. The properties listed in the Schedule are as
under:
“SCHEDULE
Right, title and interest in:
1.Diamonds confiscated by Customs.
2.Foreign currency seized by the Customs.
3.The assets including goodwill of the business under the name and style M/s Rubi
Subi Enterprises, 79.-S Khan Market, New Delhi and properties acquired from
withdrawals from the business.
4.Bank balance in the SB A/c No. A 247 with Bank of India, Khan Market, New
Delhi.
5.Cars bearing No. DLI 2543 and WBJ 9487.
6.LIC Policies bearing Nos. 24324719, 24323563,24526698, 24556474.”
4. On 18.12.1980, Shri Prem Mehra filed W.P.(C) No. 1863/1980 in this Court
challenging the said notice dated 4.11.1980. By an order dated 19.12.1980, a
Division Bench of this Court issued Rule D.B. and on 12.3.1981 stayed the
proceedings.
5. On 12.5.1994, a Constitution Bench of the Hon'ble Supreme Court gave a
decision in Attorney General for India v. Amratlal Prajivandas AIR 1994 SC 2179
upholding the constitutional validity of both the COFEPOSA and SAFEMA. As far
as the present case is concerned, what is relevant is that the Hon’ble Supreme Court
in the said judgment held that the application of SAFEMA to relatives and associates
of a detenu in terms of Section 2(2)(c)(d) thereof is valid and effective “inasmuch as
the purpose and object of bringing such persons within the net of SAFEMA is to
reach the properties of the detenu or convict, as the case may be, wherever they are,
howsoever they are held. They are not conceived with a view to forfeit the
independent properties of such relatives and associates.”
6. On 6.3.1995, when Writ Petition (C) No. 1863/1980 was taken up for hearing,
this Court was informed that the petition stood covered by the judgment of the
Hon'ble Supreme Court in Amratlal Prajivandas (supra). Accordingly the writ
petition was dismissed in default. Later on 3.8.1995, on an application for
restoration filed by the petitioner, the said Writ Petition (C) No.1863/1980 was
restored to file.
7. On 1.8.1985 separate summons were issued by the Competent Authority to
both Mr. Prem Mehra as well as Mrs. Promila Mehra under Section 15 SAFEMA.
While the summons to Mr. Prem Mehra required him to appear in the inquiry
proceedings against him under s. 6 (1) SAFEMA, the summons to Mrs. Mehra
required her to appear as a witness in the proceedings initiated against her husband
Mr.Prem Mehra under SAFEMA. Thereupon Mr.Prem Mehra filed Writ Petition (C)
No. 2195/1995 in this Court challenging both the notice dated 4.11.1980 and the
summons dated 1.8.1995 issued to him. Mrs. Promila Mehra filed Writ Petition (C)
No. 2916/1995 challenging the notice dated 4.11.1980 issued to her husband and the
summons dated 1.8.1995 issued to her. On 9.8.1995, while directing notice to issue
in each of the writ petitions, the Court took note of the pendency of W.P.(C) No.
1863 of 1980 and granted a stay of the impugned summons dated 1.8.1995. On
29.2.1996 Rule DB was issued and the interim stay was made absolute.
8. On 30.6.1997 Mr. Prem Mehra expired. On an application moved by them, Mrs.
Promila Mehra and her two daughters Ms. Sabina Sablok and Ms. Rubina Mehra
were brought on record as petitioners in Writ Petition (C) No. 2915/1995 by an order
dated 16.10.1998.
9. On 7.3.2002, Writ Petition (C) No. 1863/1980 was listed for hearing and no
one appeared for the petitioner. The Court dismissed the writ petition relying on the
decision in Amratlal Prajivandas where it was held in para 40 that “failure to
challenge the detention directly when he (the detenu) was detained, precludes him
from challenging it after the cessation of detention, where it is made the basis for
initiating action under SAFEMA.” No further appeal was filed against this order.
10. On 16.3.2005 Writ Petition (C) No. 2915/ 1995 was taken up for hearing. The
learned counsel appearing for respondents informed this Court that the petitioner Mr.
Prem Mehra had died and that accordingly nothing survived in the writ petition.
Thereupon, the writ petition was dismissed by the following order:
“Present: Ms. Kanchan Singh for counsel for the petitioner.
Mr. Rajendra & Mr. R.K.Chaufla for the respondent.
+ W.P(C ) No. 2915/1995
Mr. Rajendra counsel appearing for the respondent says that this petition has
become infructuous in view of the death of the petitioner as notice was issued to the
petitioner and once the petitioner dies, nothing survives.
In view of the aforesaid fact, the petition stands dismissed as having been
rendered infructuous.”
11. On 23.9.2005 a further notice was issued to Mrs. Promila Mehra by the
Competent Authority under s.7 (1) SAFEMA requiring her to “explain the
reasonableness vis-a-vis legitimate source of investment in properties
owned/possessed” as detailed in the notice dated 4.11.1980 issued to Mr. Prem
Mehra under Section 6(1) of the Act. Mrs. Mehra on 15.10.2005 filed an application
being CM No.13363/05 in the dismissed W.P. (C) No. 2915 of 1995 challenging the
notice dated 23.9.2005 on the ground that since the person against whom the enquiry
under Section 6(1) SAFEMA had expired those proceedings abated and a notice
thereafter to his widow in those very proceedings was not sustainable in law.
12. On this application, this Court on 26.10.2005 passed an order directing to issue
notice and further directed that till the next date of hearing, the requirement of the
widow of the petitioner to appear for the hearing before the Competent Authority,
would remain stayed. Thereafter on 28.11.2005, the respondents replied to this
application stating that forfeiture proceedings could be continued even after the death
of the person whose properties are sought to be forfeited and that the notice dated
23.9.2005 was issued under Section 7 SAFEMA to the widow only to provide an
opportunity to attend the proceedings and “does not amount to issue of summons to
her.” Importantly, the respondents explained that they had issued the notice to Mrs.
Mehra “because the impugned properties have devolved on the widow.”
13. The resultant position is that what remains for consideration are:
(i)The application CM No. 13363/2005 in the dismissed Writ Petition (C) No. 2915
of 1995 filed by Mrs. Promila Mehra seeking the quashing of the notice dated
23.9.2005 issued to her under s. 7 (1) SAFEMA; and
(ii) Writ Petition (C) No. 2916/1995 filed by Mrs.Promila Mehra challenging the
notice dated 4.11.1980 issued to Mr.Prem Mehra and the summons dated 1.8.1995
issued to her under s. 15 SAFEMA
Subsequent Developments
14. This Court had during the hearing of this writ petition on 18.7.2006 directed the
respondents to file an affidavit indicating the current status in relation to the
properties, including those that had already been confiscated, which were sought to
be forfeited pursuant to the notice dated 4.11.1980. The respondents have not filed
an affidavit but have placed on record a statement enclosing the relevant
correspondence in this regard. The facts emerging from this correspondence are that
on 31.7.2006 the Chief Commissioner, Office of the Competent Authority SAFEMA,
wrote to Mrs. Promila Mehra in her capacity as legal heir to Mr. Prem Mehra asking
her to “apprise this office about the present status of properties mentioned at serial
Nos. 3 to 6 in the Schedule to notice inasmuch as the same are within your
possession and control.” In reply to the said letter Mrs. Promila Mehra stated as
under:
“1. The following are the details of the information in my knowledge with respect
to properties mentioned at serial No.3 to 6 in the Schedule to the notice dated
4.11.1980 issued to my Late husband Shri Prem Mehra.
i.M/s. Ruby Subi Enterprises was a proprietorship firm of my husband Late Shri
Prem Mehra. The said firm was running in losses and the business of the same was
finally stopped by Late Shri Prem Mehra some time in the year 1980-81. The firm,
at the time of its closure, had no assets/movable properties. No assets or any
proceeds/valuables of the above firm are in my possession. I am not in possession of
any balance sheet of M/s. Ruby Subi Enterprises neither do I have any knowledge or
information about the assessing officer/PAN number of the firm.
ii.S.B.Account No. A-247 Bank of India, Khan Market, New Delhi:-
The above account was in the name of my deceased husband late Shri Prem Mehra.
To the best of my belief and information an amount of approximately Rs.700/- is
lying in the said account. I have no concern with the said account as I am not in
possession of any succession certificate.
iii.Cars bearing Nos. DLI 2543 and WBJ-9847:
I have no information on the abovementioned cars.
iv. LIC Policies bearing Nos. 24324719, 24323563, 24526698, 24556474:
The above policies were obtained by my husband Late Shri Prem Mehra. I am not in
possession of any of the above policies. To the best of my belief the said policies
were discontinued on account of non-payment of premiums on them by Late Shri
Prem Mehra.
2. I may like to clarify here that the above reply is solely to assist the Hon'ble
High Court of Delhi which had directed you to verify the status of properties under
the notice to Late Shri Prem Mehra. The above reply is not to be construed in any
manner as a waiver of my rights and contentions in W.P.(C) No. 2615 and
2616/1995.
3. The above reply is also not to be treated as a response to any of the notices
issued by your office to me and/or to Late Shri Prem Mehra under SAFEMA (FOP)
Act, 1976.”
15. As regards properties mentioned at serial Nos. 1 and 2 in the Schedule to the
notice dated 4.11.1980, the respondents have stated as under:
“ As per the information gathered from the Custom Authorities vide their letter dated
31.08.2006, it is intimated that:
(i) seized car bearing No. WBJ 9486 is parked and lying at CWC Godown,
Safdarjung, New Delhi.
(ii) diamonds (case property valued at Rs.58,02,733/-) was received by Shri H.C.
Sobti (I.O.) & Shri A. Sen Gupta of DRI on 23.8.1976 from valuable godown for
further depositing RBI. By this office letter dated 4.9.2006, a request was made to
Joint Director, Directorate of Revenue Intelligence (Hqrs.), New Delhi for apprising
this office about the status of confiscated diamonds i.e. whether disposed of and
deposited in Govt. account or the same are still lying in original shape. However, the
response from the authorities is still awaited.”
Submissions of Counsel
16. Mr.Kanchan Singh, learned counsel for Mrs. Promila Mehra submits that no
notice under s. 6 (1) SAFEMA had ever been issued to Mrs. Promila Mehra. The
only person to whom a notice under s. 6 (1) SAFEMA had been issued was Mr. Prem
Mehra. With this death, those proceedings had been rendered infructuous. Therefore
Writ Petition (C) No. 2915/2005 had been dismissed on that ground on the statement
of the learned counsel for the respondent. There was nothing in the SAFEMA that
permitted the proceedings to thereafter be automatically continued against Mrs.
Promila Mehra. Therefore, the notice issued to her under s. 7 (1) SAFEMA on
23.9.2005 to attend the proceedings arising form the notice dated 4.11.1980 to
Mr.Prem Mehra was unsustainable in law. Likewise, the summons dated 1.8.1995
issued to her would no longer survive as there were no proceedings pending in which
she was required to attend as a witness.
17. In reply, it is submitted by Mr.Rajendra, learned counsel for the respondents,
that Writ Petition (C) No. 2915/1995 having been dismissed on the ground of having
become infructuous, an interlocutory application in the said writ petition was not
maintainable. It was further reiterated under the SAFEMA, in view of the expanded
definition of ‘person’ which includes a relative or associate, the proceedings for
forfeiture of the illegally acquired properties of a person could continue even after his
death. It is further submitted that in view of the judgment in Amrutlal Prajivandas,
the respondents were fully justified in requiring Mrs. Promila Mehra, as the surviving
heir of Mr. Prem Mehra to explain the sources of his income for acquiring the
properties in question.
Issues for Consideration
18. The issues that arise for consideration in the present case are:
(i)What is the effect of the order dated 7.3.2002 dismissing W.P.(C) No. 1863 of
1980 and order dated 16.3.2005 dismissing W.P.(C) 2915/1995 on the prayer in
W.P.(C) No. 2916 of 1995 seeking to challenge the notice dated 4.11.1980?
(ii)Are the summons dated 1.8.1995 and notice dated 23.9.2005 issued to Mrs..
Promila Mehra under s. 15 and s. 7 (1) SAFEMA respectively valid in the law?
(iii)In view of the subsequent developments, what are the consequential directions
required to be issued?
Re: Issue (i)
19. It may be recalled that in the instant case the detention order under COFEPOSA
was never challenged by Mr.Prem Mehra. That detention order formed the basis for
the subsequent notice dated 4.11.1980 issued to him under s. 6 (1) SAFEMA. This
notice dated 4.11.1980 was challenged by Mr.Prem Mehra in W.P.(C) No.
1863/1980 which was dismissed on 7.3.2002 and that order became final with no
further appeal having been filed. The same notice dated 4.11.1980 was also
challenged by Mr.Prem Mehra in Writ Petition (C) No. 2915/1995. After his death
Mrs. Mehra and the two daughters were brought on record as petitioners in W.P.(C)
No. 2915/1995 as legal heirs of the petitioner Mr.Prem Mehra. This writ petition was
thereafter dismissed as infructuous on 16.3.2005. This order also became final.
Therefore the challenge to the notice dated 4.11.1980 issued to Mr.Mehra failed
twice over. On the last occasion Mrs. Mehra and the two daughters were also parties.
This issue cannot be sought to be reopened by them on the principles of res judicata.
Therefore, the prayer in W.P.(C) No. 2916 /1995 filed by Mrs.Mehra challenging the
notice dated 4.11.1980, is rejected in view of the earlier dismissal of both W.P.(C)
No. 1863/1980 and 2915/1995 raising the same challenge. Issue (i) is answered
accordingly.
Re: Issue (ii)
20. At the outset it requires to be noticed that one of the purposes for the
enactment of SAFEMA was to trace the properties of smugglers and foreign
exchange manipulators acquired through their ill-gotten gains and provide for the
forfeiture of such properties to the State. It was acknowledged in the Preamble to
SAFEMA that: “such persons have in many cases been holding the properties
acquired by them through such gains in the names of their relatives, associates and
confidants.”
21. Consistent with this objective, SAFEMA applies to not only persons who are
themselves detained under the COFEPOSA but also in terms of Section 2(2)(c) to
“every person who is a relative of a person referred to in clause(a) or clause (b)”.
Explanation 2 to Section 2(2) defines “relative”, in relation to a person, to mean a
spouse of the person and any lineal ascendant or descendant of the person. Under
Section 3(1)(c) SAFEMA, “illegally acquired property”, in relation to any person to
whom SAFEMA applies, includes any property acquired by such person, and also
any property, “held by such person”. Then under Section 3(1)(c) SAFEMA
“property” includes “any interest in property, movable or immovable”.
22. Sections 6,7 and 15 of SAFEMA which are relevant for the purpose of the
present case read 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 18 or otherwise, the
competent authority has reason to believe (the reasons for such belief to be recorded
in writing) that all or any of such properties are illegally acquired properties, it may
serve a notice upon such person (hereinafter 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 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.
(2) Whereas notice under sub-section (1) to any person specifies any property as
being held on behalf of such person by any other person, a copy of the notice shall
also be served upon such other person.
7. Forfeiture of property in certain cases--(1) The competent authority may, after
considering the explanation, if any, to the show cause notice issued under section 6,
and the material available before it and after giving to the person affected (and in a
case where the person affected holds any property specified in the notice through any
other person, to such other person also) a reasonable opportunity of being heard, by
order, record a finding whether all of any of the properties in question are illegally
acquired properties.
(2) Where the competent authority is satisfied that some of the properties referred to
in the show cause notice are illegally acquired properties but is not able to identity
specifically such properties, then it shall be lawful for the competent authority to
specify the properties which, to the best of its judgment, are illegally acquired
properties and record a finding accordingly under sub-section (1).
(3) Where the competent authority records a finding under this section to the
effect that any property is illegally acquired property, it shall declare that such
property shall, subject to the provisions of this Act, stand forfeited to the Central
Government free from all encumbrances.
(4) Where any shares in a company stand forfeited to the Central Government under
this Act then, the company shall, notwithstanding anything contained in the
Companies Act, 1956 (1 of 1956), or the articles of association of the company,
forthwith register the Central Government as the transferee of such shares.
15. Competent authority and Appellate Tribunal to have powers of civil court--
The competent authority, and the Appellate Tribunal shall have all the powers of a
civil court while trying a suit under the Code of Civil Procedure, 1908(5 of 1908), in
respect of the following matters, namely:-
(a) summoning and enforcing the attendance of any person and examining him on
oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence or affidavits;
(d)requisitioning any public record or copy thereof from any court or office;
(e) issuing commissions for examination of witnesses or documents;
(f) any other matter which may be prescribed.”
23. The contention that the proceedings for forfeiture of the property acquired by a
person through ill-gotten gains can, under SAFEMA, continue even after the death of
the detenu is no doubt correct. A plain reading of the aforementioned provisions of
SAFEMA does indicate that the property acquired can be traced to the relatives and
close associates of the detenu as well because they invariably hold such properties in
the names of the relatives and associates and not in their own names. While
upholding the validity of s. 2 (2) SAFEMA, the Hon’ble Supreme Court in Amratlal
Prajivandas explained as under (AIR p.2204-2006, para 43):
“SAFEMA is directed towards forfeiture of “illegally acquired properties” of a
person falling under clause (a) or clause (b) of Section 2(2). The relatives and
associates are brought in only for the purpose of ensuring that the illegally acquired
properties of the convict or detenu, acquired or kept in their names, do not escape the
net of the Act. It is a well-known fact that persons indulging in illegal activities
screen the properties acquired from such illegal activity in the names of their
relatives and associates. Sometimes they transfer such properties to them, may be,
with an intent to transfer the ownership and title. In fact, it is immaterial how such
relative or associate holds the properties of convict/detenu — whether as a benami or
as a mere name-lender or as a bona fide transferee for value or in any other manner.
He cannot claim those properties and must surrender them to the State under the Act.
Since he is a relative or associate, as defined by the Act, he cannot put forward any
defence once it is proved that that property was acquired by the detenu — whether in
his own name or in the name of his relatives and associates. It is to counteract the
several devices that are or may be adopted by persons mentioned in clauses (a) and
(b) of Section 2(2) that their relatives and associates mentioned in clauses (c) and (d)
of the said sub-section are also brought within the purview of the Act. The fact of
their holding or possessing the properties of convict/detenu furnishes the link
between the convict/detenu and his relatives and associates. Only the properties of
the convict/detenu are sought to be forfeited, wherever they are. The idea is to reach
his properties in whosoever’s name they are kept or by whosoever they are held. The
independent properties of relatives and friends, which are not traceable to the
convict/detenu, are not sought to be forfeited nor are they within the purview of
SAFEMA.
………
“It is equally necessary to reiterate that the burden of establishing that the properties
mentioned in the show-cause notice issued under Section 6, and which are held on
that date by a relative or an associate of the convict/detenu, are not the illegally
acquired properties of the convict/detenu, lies upon such relative/associate. He must
establish that the said property has not been acquired with the monies or assets
provided by the detenu/convict or that they in fact did not or do not belong to such
detenu/convict. We do not think that Parliament ever intended to say that the
properties of all the relatives and associates, may be illegally acquired, will be
forfeited just because they happen to be the relatives or associates of the
convict/detenu. There ought to be the connecting link between those properties and
the convict/detenu, the burden of disproving which, as mentioned above, is upon the
relative/associate.” (emphasis supplied)
24. What is significant in the above observations is that in order to rope in the
relative, it must be first shown that the properties were in fact held by such relative.
The converse does not hold true and is not permissible. In other words, where the
properties are held by the detenu in his own name, it is not permissible for the
relative to be roped in and asked to explain the sources of the detenu for the
acquisition of such property. In order to bring the relative within the dragnet, the
factual foundation will have to be first laid that the properties in question are in fact
being held for the affected person by the relative or associate. For instance, in the
present case, if it were the stand of the respondents that the properties acquired by
Mr.Mehra are in fact held by or in the name of the relatives of Mr. Prem Mehra, viz.,
Mrs. Mehra and the two daughters, then the respondents would have to make good
such a case from the records. However as will be presently seen, that is not the case
of the respondents themselves.
25. The scheme of the s. 6, 7 and 15 SAFEMA appears to be that in the first
instance, notice is issued to the affected person (the detenu) under s. 6 (1) SAFEMA,
and it is only after considering the explanation from the detenu to such notice that the
authority can proceed to the next stage under s. 7 (1). At this stage, if the authority
finds that the “person affected holds any property specified in the notice through any
other person” then a notice will be issued “to such other person also.” This is,
therefore, the sequence contemplated by the SAFEMA for proceeding against a
person other than the ‘person affected’.
26. In the present case, admittedly the notice under Section 6 (1) SAFEMA was
issued only to Mr. Prem Mehra on 4.11.1980 on the basis of his detention under
COFEPOSA. No notice under s. 6 (1) SAFEMA was issued to Mrs. Prem Mehra.
The premise on which the said notice dated 4.11.1980 was issued to Mr.Prem Mehra
was that the properties listed in the Schedule to the notice were acquired and held by
Mr.Prem Mehra himself. The notice specifically states that the competent authority
has “on the basis of relevant information and/or relevant material available,” “reason
to believe that the properties described in the Schedule annexed hereto which are
held by you on your behalf are illegally acquired properties within the meaning of
clause (c) of sub-section (1) of Section 3 of the said Act.” (emphasis supplied)
27. It is not in dispute that in view of the stay granted by this Court, Mr. Prem Mehra
did not reply to the notice dated 4.11.1980. Even while the stay was operative, Mr.
Prem Mehra died. Therefore, the proceedings under Section 6 vis-a-vis Mr. Prem
Mehra could not be completed and therefore the occasion for the Section 7 stage to
commence did not arise. Therefore, no further notice to Mrs. Promila Mehra under s.
7 (1) in respect of the notice to Mr.Prem Mehra under s. 6 (1) could have been
issued. The statement of the respondent before this Court in the proceedings in W.P
(C) No. 2915/1995 on 16.3.2005 that “nothing survives” is, in our view on a correct
understanding of the legal position under the SAFEMA.
28. The matter could be examined from another angle. In order that the authority can
issue a notice to any person, other than the affected person, it must be shown that the
affected person had held the property in question through such ‘other person’. In
other words, the authority here should have had definite information that at the time
of his detention or their seizure Mr. Prem Mehra was holding the properties in
question through Mrs. Prem Mehra. However, the case of the respondents, as
evident from the record, is that the properties in question were being held only by
Mr.Mehra. This includes the three items of property viz., the diamonds, the foreign
currency and one car, which have been confiscated and have remained in the custody
of the respondents. Therefore on their own showing these properties did not belong
to and were not in the possession of Mrs. Promila Mehra. Also, Mrs. Mehra herself
has never, in the course of nine years since her husband’s death, laid claim to these
properties. Her reply to the letter dated 31.7.2006 issued by the respondents also is
one of denial that she has any knowledge of or is in possession of any of the other
properties mentioned in the Schedule to the notice dated 4.11.1980. Therefore, the
assumption of the respondents that the properties devolved upon Mrs. Mehra on the
death of Mr.Mehra in the absence of any other proof is only their ipse dixit and
cannot justify the issuance of the notice to her under s. 7 (1) SAFEMA.
29. We are, in the circumstances of the case, not prepared to entertain the objection
raised by the respondents to the maintainability of CM 13363/2005 on the ground
that it is an application in a dismissed writ petition. The other facet of this objection
is that the notice dated 23.9.2005 gave rise to a separate cause of action for which
Mrs. Mehra should have filed a separate petition. Given the fact that these cases have
been pending in this court for well over a decade and the notice dated 23.9.2005
arises from these very proceedings, a separate petition would only multiply
proceedings and not further the interests of justice. In any event we have dealt with
the matter on merits after considering the objections of the respondents.
30. As far as W.P. (C) No. 2916/1995 by Mrs. Mehra is concerned, we have already
rejected the challenge in this writ petition to the notice dated 4.11.19890 issued to
Mr.Mehra. The other prayer concerns the validity of the summons dated 1.8.1995
issued to Mrs. Promila Mehra under s. 15 SAFEMA. Admittedly, this summons was
issued to her only in her capacity as a witness in the proceedings against Mr. Prem
Mehra under s. 6 (1) SAFEMA. Those proceedings abated with the death of Mr.
Prem Mehra because he never replied to the notice dated 4.11.1980 issued under
Section 6 of SAFEMA. Therefore, the notice dated 1.8.1995 issued to Smt. Promila
Mehra also cannot any longer survive in law.
31. Issue (ii) is answered by holding that the summons dated 1.8.1995 issued to Mrs.
Promila Mehra under s. 15 SAFEMA and the notice dated 23.9.2005 issued to her
under Section 7 (1) SAFEMA are invalid and are liable to be struck down as such.
Re: Issue (iii)
32. The factual position in relation to the properties that have been confiscated as
noticed hereinabove indicates that the most valuable of the properties being the
diamonds valued at Rs 58,02,733 were handed over to two officers of the Directorate
of Revenue Intelligence (DRI) for being deposited with the Reserve Bank of India
thirty years ago i.e. 23.8.1976 and no confirmation is still available from the DRI or
the RBI about the status of those diamonds. In other words, there is no confirmation
with the Competent Authority under SAFEMA that the diamonds confiscated are in a
safe and secure environment. This is a matter of serious concern and this Court is
constrained to observe that the entire purpose of the SAFEMA would be defeated if
the authorities are not careful about the security and custody of the properties seized
or confiscated. It hardly needs reiteration that the statutory authorities are duty
bound in law to ensure the security and custody of all such properties that may be
seized or confiscated till the proceedings under SAFEMA are finally concluded. If it
is subsequently found that the seizure of the properties was not justified, they are
bound to return the properties to the original owner.
33. In the present case, the challenge to notice dated 4.11.1980 no longer survives
with the dismissal of both W.P. (C) No. 1863/1980 and W.P.(C) No. 2915/1995.
There is no clamant to the diamonds, the foreign currency and one of the cars seized
from Mr. Prem Mehra. Mrs. Mehra or her daughters have not laid any claim to these
properties. Mrs. Mehra has also taken the stand that she is not aware of and has
nothing to do with any of the other properties listed in the Schedule to the notice
dated 4.11.1980. We are not called upon to determine the correctness of this stand.
Nevertheless, considering the facts and circumstances of the case, we are of the view
that little purpose will therefore be served in directing the respondents to now trace
the other properties at this distance in time nearly 30 years after the detention of Mr.
Mehra. We accordingly hold that, in the interests of justice, no further proceedings
should be initiated against Mrs. Promila Mehra or her two daughters in this regard.
34. In the circumstances, a direction requires to be issued to the respondents to
ensure that the diamonds confiscated are safe and secure in the custody of the
Reserve Bank of India. The diamonds, the seized foreign currency and the car No.
WBJ 9486 in the CWC godown, Safdarjung, New Delhi will now stand forfeited to
the respondents and formal orders in that regard would require to be issued by the
Competent Authority.
35. In view of the above, we direct as under:
(i) The summons dated 1.8.1995 issued to Mrs. Promila Mehra under s. 15
SAFEMA is quashed.
(ii) The notice dated 23.9.2005 issued to Mrs. Promila Mehra under s. 7 (1)
SAFEMA is hereby quashed.
(iii) No further proceedings will be initiated against or notices under SAFEMA
issued to Mrs. Promila Mehra and her two daughters, Ms. Subina Sablok and
Ms.Rubina Mehra, in their capacity as legal heirs and representatives of late Prem
Mehra arising from his detention under the COFEPOSA and the consequent notice
dated 4.11.1980 issued to him under Section 6 (1) SAFEMA.
(iv)The Competent Authority, SAFEMA will forthwith pass formal orders forfeiting
to the Central Government the diamonds valued at Rs. 58,02,733/-, the car bearing
No.WBJ 9486 and the foreign currency seized from Mr.Prem Mehra and which have
been confiscated and are in the possession of the respondents after ensuring that their
custody is safe and secure.
(v)Effective steps will be taken by the respondents hereinafter to ensure that
properties seized and confiscated under SAFEMA proceedings are kept in a safe and
secure environment with constant monitoring by the department and authorities
concerned. We would like the respondents to issue written instructions to tighten up
the existing monitoring mechanism in this regard within a period of eight weeks from
today.
(vi)The Competent Authority SAFEMA and the Directorate of Revenue Intelligence
(DRI) will file a joint compliance report in this Court with regard to the directions
contained in sub-paras (iv) and (v) above within a period of ten weeks from today
and in any event not later than December 31, 2006.
36. With the above directions, CM No. 13363/2005 in Writ Petition (C) No.
2915/1995 and Writ Petition (C) No. 2916/1995 are hereby disposed of. The Registry
will ensure that a certified copy of this judgment is delivered to the Competent
Authority, SAFEMA and the Director of Revenue Intelligence within a period of one
week from today and in any event not later than October 16, 2006.
sd/-
(S. Muralidhar)
Judge
sd/-
(Mukul Mudgal)
Judge
