IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP.No. 4125 of 2001(N)
1. KURUNGATTIL MOHAMMED KUTTY
... Petitioner
Vs
1. THE COMPETENT AUTHORITY
... Respondent
For Petitioner :SMT.PREETHY KARUNAKARAN
For Respondent :SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR
The Hon'ble MR. Justice ANTONY DOMINIC
Dated :25/05/2009
O R D E R
ANTONY DOMINIC, J.
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OP NO. 4125 OF 2001 (N)
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Dated this the 25th day of May, 2009
J U D G M E N T
The challenge in this original petition is against Exts.P3, P13
and P14 orders.
2. Facts of the case are that according to the respondents
proceedings under the Conservation of Foreign Exchange and
Prevention of Smuggling Activities Act were initiated against the
petitioner and an order of detention was issued against him by
the Government of Maharashtra sometime in September, 1984. It
is stated that although the petitioner was not detained pursuant
to the order of detention, notice under Section 6 of the Smugglers
and Foreign Exchange Manipulators (Forfeiture of Property) Act,
1976 (hereinafter referred to as the Act for short) was issued. It
would appear that the petitioner filed Exts.P1 and P2 replies
disputing the applicability of the Act and unsustainability of the
proceedings initiated. However rejecting the contentions, the 1st
respondent issued Ext.P3 order forfeiting 40 cents of land in
Sy.No.83/7 of Oorakam Village along with a tiled house with land
in Sy.No.84/1 under Section 7(1) of the Act.
OP No.4125/01
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3. Petitioner filed Ext.P4 appeal before the Appellate
authority accompanied by Exts.P5 to P8 affidavits of his uncle and
father explaining the source of purchase of the property forfeited.
He also raised additional grounds by filing Ext.P9 relying on
Ext.P10 guidelines issued by the Government of India directing
the competent authorities to deal with small cases of forfeiture of
property where the value of the property involved is less than
Rs.1 lakh in the following manner.
“(a) Cases where proceedings are yet to be initiated and
cases where the proceedings are already initiated:
The proceedings under Section 6(1) of the SAFEM
(FOP) Act, 1970 need not be initiated and if already initiated,
may be dropped in the cases of (i) a person referred to
in clause (a) or clauses (b) of sub-section (2) of Sec. 2 of the
Act (hereinafter referred to as the ‘principal person’); (ii)
each of the relatives and associates of the principal person,
as have been referred to in clauses (c) and (d) respectively
of sub-section (2) of section 2(2), if the aggregate value of
the properties held by the aforesaid persons (that is, the sum
total of the values of the properties held by all the persons
referred to above) in respect of which proceedings under the
Act have been or can be initiated, does not exceed
Rs.1,00,000/-. Before such non-initiation/ dropping, whether
the value of property is less than Rs.1,00,000/- should have
been identified by through investigations.
(b) Cases where the final orders are issued by Cas:
In the cases where the value of property involved
exceeds Rs.1,00,000/- and the Show Cause Notices are
issued; the evidences furnished by the aforesaid person(s) to
prove the sources of income, are accepted by CAs and the
ultimate value of property to be forfeited comes to less thanOP No.4125/01
:3 :Rs.one lakh as per the order of CAs issued under the Act, in
such cases further action under section (19) for taking
possession of the property may be dropped.
4. These instructions are in the nature of guidelines only
and are being issued with a view to enable the CAs and all
the officers working with them to concentrate more on
bringing to book economic offenders with substantial
proportion instead of spending their time and energy in
handling small cases.”
4. He also filed Ext.P11 petition for permitting him to urge
additional grounds. The appeal was heard by the Appellate
Authority and by Ext.P13, the appeal was rejected. The contention
that since he had not undergone detention pursuant to the order
of detention passed under the COFEPOSA Act, his property is not
liable to be forfeited under the Act was overruled. The fact that
the property was purchased in his name by his relative way back
in 1972 was also overruled and on facts, I do not think any
sufficient material is available to interfere with such findings.
5. However, dealing with the claim of the petitioner for
the benefit of Ext.P10 guideline, the Appellate Authority has held
in Ext.P13 as follows:
It was next contended for the appellant, based on the
additional grounds that the guidelines dated the 23rd
June, 1994 issued by the Central Government to the
competent authority should be applied and the
proceedings should be dropped, as the value of the
property is less than Rs one lakh. These guidelines have
no force of law and cannot be enforced.
OP No.4125/01
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6. On consideration of the material on record, I am not in
a position to accept the way in which the Appellate Authority has
dealt with the contentions of the petitioner. True, Ext.P10
guidelines cannot have the force of law. However, fact remains
that this was issued by the Government of India and the
competent authorities and the Appellate Authority are
functionaries under the Government of India. If a guideline has
been issued by Government of India, its subordinate authorities
are bound by such guidelines. If the supporting authorities are
allowed to be brushed aside and ignore such binding guidelines,
that will cause a grave threat to the hierarchical system of
Government. If the view taken in the order is accepted, it may
lead to a situation where one competent authority will accept the
guidelines and other may not. There has to be uniformity and
that can be achieved only if all authorities accept and implement
the guidelines issued by the Government.
7. Therefore, the view taken by the Appellate Authority in
para 7 of Ext.P13 extracted above cannot be accepted. It is seen
that Ext.P3 order was passed by the competent authority on 27th
of February, 1998, while Ext.P10 guidelines was issued by the
Government of India as early as on 23rd of June, 1994. If on the
OP No.4125/01
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date of Ext.P3, Ext.P10 guideline were in force, there was no
reason why the Competent authority should not have extended
the benefit of the said order to the petitioner, provided he is
otherwise eligible for the same.
8. Since Ext.P10 guidelines has not been considered
either by the Competent Authority and though urged, has been
ignored by the Appellate Authority, I am inclined to set aside
Exts.P3 and P13 for that reason. Ext.P14 being consequential,
also has to be set aside.
9. Accordingly, setting aside Exts.P3, P13 and P14, the
original petition is disposed of directing the 1st respondent to
reconsider the proceedings with notice to the petitioner and
decide the matter in accordance with law, taking into account
Ext.P10 guideline also.
Original petition is disposed of as above.
ANTONY DOMINIC, JUDGE
Rp