IN THE HIGH COURT OF KERALA AT ERNAKULAM
OP.No. 13351 of 1999(M)
1. P.C.RUKKIYA
... Petitioner
Vs
1. UNION OF INDIA
... Respondent
For Petitioner :SRI.P.SUKUMARAN NAYAR(SR.)
For Respondent :SRI.K.RAMAKUMAR, SCGSC
The Hon'ble MR. Justice S.SIRI JAGAN
Dated :21/05/2009
O R D E R
S. Siri Jagan, J.
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O.P. No. 13351 of 1999
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Dated this, the 21st May, 2009.
J U D G M E N T
The petitioners in this original petition are the widow and
children of late N.K. Kunhavaru. The said Kunjavaru was the brother
of one Moidunni, who was a detenu under the Conservation of Foreign
Exchange and Prevention of Smuggling Activities Act, 1974. On the
ground that certain properties standing in the name of Kunhavaru
were acquired with the illegal funds of Moidunni, proceedings were
initiated against those properties under the Smugglers and Foreign
Exchange Manipulators (Forfeiture of Property) Act, 1976, by issuing
Ext. P1 notice under Section 6(1) of the said Act. The said Kunhavaru
challenged the notice before the High Court of Madras in W.P. No.
4470 of 1978, and obtained a stay of further proceedings . In view of
the fact that a batch of cases challenging the constitutional validity of
the Act was pending before the Supreme Court, the said writ petition
was kept pending. While that writ petition was pending, the said
Kunhavaru died on 20-3-1992. In the meanwhile, in the decision of
Attorney General for India and Others v. Amratlal Prajivandas
and Others, [(1994) 5 SCC 54], the Supreme Court upheld the
constitutional validity of the Act. Thereafter, on 18-7-1994, W.P.No.
4470/1998 was disposed of by the High Court of Judicature, Madras
holding that since the validity of the Act has been upheld by the
Supreme Court, further proceedings pursuant to Ext. P1 may be
continued and completed within six months, granting further time to
the petitioner in that writ petition to file objections to the show cause
notice, apparently without noticing that the petitioner Kunhavaru was
no more.
2. Subsequently, the 2nd petitioner herein filed Ext. P3
objections to Ext. P1 notice, which was followed up with Ext. P4
additional objections. However, the same did not find favour with the
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3rd respondent herein, who is the competent authority under the Act,
who passed Ext. P5 order under Section 7(1) of the Act, ordering
forfeiture of the 10 items of properties detailed therein to the
Government of India. Ext. P6 consequential order under Section 19
(1) of the Act was also passed by the 3rd respondent, requiring the
petitioners to surrender those properties. The 5th petitioner herein
filed Ext. P7 appeal before the 2nd respondent-Appellate Authority
under Section 12 of the Act, which was dismissed by the 2nd
respondent by Ext. P8 order. Exts.P5, P6 and P8 orders are under
challenge in this original petition.
3. The main contention of the petitioners is that the competent
authority has to show link or nexus between the illegal funds of the
detenu and the properties proposed to be forfeited to substantiate
the belief that the property was illegally acquired and reasons to
come to that belief have to be recorded in writing. According to the
counsel for the petitioner, when properties of relatives of a detenu are
proposed to be proceeded against, the competent authority has to
show a connecting link between those properties and the
convict/detenu and even if the property is illegally acquired by the
relative, without a connecting link between the funds of the detenu
and the properties, the reasons for belief regarding which connecting
link has to be recorded in writing by the competent authority, a
notice cannot be issued under Section 6(1). He points out that in
Amratlal Prajivandas’s case (supra), the challenge against the
provisions of the Act to relatives and associates has been repelled by
Supreme Court noting that it is because of the necessity for the
competent authority to record such reasons in writing before he can
proceed under the Act, sufficient safeguard against arbitrariness has
been provided in the Act. The counsel buttresses this argument
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relying on the decisions of the Supreme Court in Fatima Mohd.
Amin (Dead) through L.R. v. Union of India [(2003) 7 SCC 436],
P.P. Abdulla and another v. Competent Authority and others,
[(2007) 2 SCC 510] and Kesar Devi (SMT) v. Union of India and
others [(2003) 7 SCC 427]. The counsel argues that Ext. P1 notice
does not disclose any such nexus between the detenu and the
properties in question and therefore Ext. P1 notice itself is vitiated.
On the basis of such a notice, the petitioners cannot be asked to prove
that the properties have not been acquired with the illegal funds of
the detenu, is the contention raised by the petitioner’s counsel.
4. With the help of a counter affidavit, the 3rd respondent seeks
to support the impugned orders. According to the Assistant Solicitor
General, in Ext. P1 itself it is specifically recorded that for the
detailed reasons recorded in the case of Shri. N.K. Moidunni, brother
of Kunhavaru, there is reason to believe that the properties have
been acquired from the illegal funds of the detenu and the reasons
recorded in Moidunni’s case are sufficient to show the nexus between
the properties and the detenu. The Assistant Solicitor General has
also made available for my perusal in Court a copy of the reasons
recorded under Section 6(1) of the Act in the case of Moidunni. The
Assistant Solicitor general points out that in Kesar Devi’s case
(Supra), the Supreme Court has held that the requirement for the
competent authority to show link or nexus to substantiate the belief
that property was illegally acquired is only where the relationship of
the convict/detenu with the person holding the property is remote and
not where the relationship is close and direct. According to learned
Assistant Solicitor General, in this case, the said Kunhavaru being the
brother of the detenu, the relationship is close and direct and
therefore the requirement under the Act is satisfied by Ext. P1 read
O.P.. No. 13351/99. -: 4 :-
with the reasons recorded in the case of Moidunni.
5. I have considered the rival contentions in detail.
6. I am of opinion that in view of the specific provisions of
Section 6(1) and the Supreme Court decisions cited before me
(supra), the legal proposition that the competent authority should
record the reasons for the belief that the properties sought to be
proceeded against are illegally acquired properties of the
convict/detenu in writing cannot be disputed. That being the legal
position, all I have to decide is whether that requirement is fulfilled in
this case.
7. Some reasons stated to be as required under Section 6(1) are
appended to Ext. P1 which are the following:
Shri. N.K. Kunhavara is the brother of Sri N.K. Moidunny
who was a detenu under the COFEPOSA Act, 1974. Therefore,
Shri. Kunhavara is a “relative” within the meaning of Section 2(2)(c) of the Smugglers & Foreign Exchange Manipulators
(Forfeiture of Property) Act, 1976.Shri. Kunhavara went to Malaysia prior to 1947 and was
till now in Malaysia. He is stated to be now in India. Various
properties were acquired by Shri. Moidunny either in his name or
in the name of Shri. N.K. Kunhavara. There is a partition on
21.9.1977 according to which, certain properties have been
allotted to Shri. Kunhavara. For the details reasons recorded in
the case of Shri. N.K. Moidunny brother of Shri. Kunhavara, all
these properties would be deemed to have been acquired from the
illegal funds.xx xx xx
Shri. Kunhavara has also acquired a property in R.S.No. 298 in
Orumanayur panchayat (purchased vide doc. No. 827/67 dated.
6.6.1967 – Extent 1.37= acres) Since there is no evidence for the
source of funds for purchase of this property the same would be
deemed to have been acquired out of illegal funds.It is seen that a construction has been put-up during 1970
to 1972, in the lands (Item 3 and 4 above) for a sum of Rs.
25,000/-. The source for this is stated to have been the amountsO.P.. No. 13351/99. -: 5 :-
remitted to Shri. Moidunny, brother, and which was deposited in
the Catholic Syrian Bank, Chowghat. Details of the bank a/c.
reveal the following deposits:7.1.1974 Rs. 25,992.50 9.2.1974 Rs. 4,207.30 Rs.30,199.80Since the construction was put-up prior to the receipt of this
money, the source for the same cannot be related to the
remittance. Therefore, the source for the construction of the
building would be deemed to have come from the illegal funds.Apart from the above properties, Shri. Kunhavara has also
acquired the property at Guruvayur village in Survey No. 246/10,
236/6 and 254/18 being agricultural lands, purchased vide doc.
Nos. 379/69 dt. 26-7-1969 and 720/61 dated. 13.5.1961 (Extent
1.09 acres) along with Shri. Moidunny, brother and Mrs. Suhara,
W/o. Shri Moidunny. Since there is no evidence for the source of
funds for purchase of this property, this would also be deemed to
have been acquired out of illegal funds.From the facts mentioned above and considering the
properties owned by the person, I am of the opinion that all the
properties mentioned above were acquired out of unexplained
funds and this is a fit case for the issue of a notice u/s 6(1) of the
Act.”(Underlining supplied)
I do find some reasons here to connect the properties to the detenu,
Moidunni. I further find that the above also refers to the reasons
recorded in the case of Moidunni. As I have stated, the Assistant
Solicitor General has made available for my perusal the reasons
recorded in the case of Moidunni. In the same, it is stated thus:
“Shri. Moidunny has acquired a number of properties over the
years. In 1973 there was a partition between himself and his brother
Shri. N.K. Kunhavaru, Orumarayur, Trichur Dist. (Partition deed No.
793/1977 dt. 21.9.1977). Narration in the partition deed reads as
under:“Properties mentioned in the schedules were acquired by us
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jointly or separately by our earnings and these properties have
been enjoyed by us till now. As per this deed, the properties
shown in Schedules A and B will hereafter belong to the share of
Kunjavaru (A schedule) and Moidunny (B schedule).”Shri. Kunhavaru, the elder brother of Shri. Moidunny, is
reported to have gone to Malaysia prior to 1947 and Moidunny was
also reported to have been in Malaysia from 1952 to 1970. The
various properties are alleged to have been acquired by means of
income derived in Malaysia. However, there is no proof for having
remitted any money to India. There is also no known source of
income for Shri. Moidunny in India. Therefore, the acquisition of the
various properties would be deemed to have been made by Shri.
Moidunny from his illegal funds. The properties that are allotted to
the share of Shri. Moidunny, as per the partition deed, are as under.(1) Right, title and interest in property at Orumanayur village,
Chowghat Taluq vide document No. 176/65 dt. 16.2.1965:Survey No. 61/7 - 87 cents ) with building ,, 61/14 - 39 cents ) in Ward No.I ) House No.222 (2) Right, title and interest in lands at Orumanayur village,Chowghat Taluk in Survey No. 61/12 – Extent 37 cents – Purchased
vide document No. 730/70 dt. 24.9.1970.(3) Right, title and interest in lands at Orumanayur village,
Chowghat Taluk in Survey No. 254/10 – Extent 56 cents – purchased
vide document No. 163/70 dt. 20.4.1970.(4) Right, title and interest in lands at Orumanayur village,
Chowghat Taluk in Survey No. 253/7 – Extent 7 cents – purchased
vide document No. 164/70 dt. 20.4.1970.(5) Right, title and interest in building in Survey No. 61/7 of
Orumanayur village – Ward No. 1 Door No. 200.Apart from the above, the following property was also acquired
by Shri. Moidunny.1.37= cents of land at Venkitanga village in Survey No. 298
purchased vide document No. 830/67 dt. 6.6.1967.In addition, another property at Guruvayur village in S. No.
246/10, 253/6 and 254/18, being agricultural lands, purchased vide
doc. Nos. 379/69 dt. 26.7.1969 and 720/61 dt. 13.5.1961 (Extent 1.09
acres), is jointly held along with Shri. Kunhavaru and Mrs. Suhara,
wife of Shri. Moidunny. For These two properties, as Shri. Moidunny
has no legal source of income, the sources should be deemed to haveO.P.. No. 13351/99. -: 7 :-
come from his illegal funds.”
(Underlining supplied)
From the same, it is clear that the said Moidunni and Kunhavaru had
very intimate transactions in respect of money and property. It is
clear that they had put both their individually owned properties and
jointly acquired properties in the hotchpot for partition. These are
more than sufficient to show real nexus between the illegal funds of
the detenu and the properties proceeded against. That being so, I do
not find any merit in the contention of the petitioners that the 3rd
respondent has not recorded reasons in writing to show link or nexus
between the properties and the detenu and for the belief that the
property was acquired with the illegal funds of the detenu-Moidunni.
8. Once that statutory requirement is fulfilled, then the onus is
clearly on the petitioners to prove that the properties were not
acquired with the illegal funds of the detenu. The petitioners have
not even attempted to produce any proof whatsoever in that regard.
That being so, they have not discharged the onus put on them by the
Statute under Section 8 of the Act, without which they cannot succeed
in the challenge against the impugned orders.
Therefore, I do not find any merit in the original petition.
Accordingly, the original petition is dismissed.
S. Siri Jagan, Judge.
Tds/