K.T. Thomas, Actg. C.J.
1. Appellants are husband and wife. Some of the properties of the appellants were ordered to be forfeited to the Central Government under the
provisions of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (for short ''Safema''). The said action of the
authorities is being challenged by the appellants in the Original Petition filed under Article 226 of the Constitution. But learned single Judge
dismissed the Original Petition. This appeal is hence filed.
2. Appellants have raised alternative contentions. One of them was that the provisions of SAFEMA are ultra vires to the Constitution. But with the
pronouncement of the decision by a 9 Judges Bench of the Supreme Court in Attorney General for India and Others Vs. Amratlal Prajivandas and
Others, upholding the validity of SAFEMA, the challenge on that ground became completely defused. So the appeal was dismissed along with
some other appeals in which the validity of the provisions of SAFEMA was challenged. But, appellants applied for reveiw of the judgment
contending that they have raised other contentions touching the merits of the forfeiture order and the same was not considered while dismissing the
appeal. The review application was allowed and the writ appeal was, therefore, heard on merits.
3. Facts in brief are these: First appellant, who is the husband of the second appellant, was detained under Conservation of Foreign Exchange and
Prevention of Smuggling Activities Act, 1974 (COFEPOSA) from 16-8-1975 to 24-3-1977. The competent authority issued a notice u/s 6 of the
SAFEMA to both appellants to show cause why three items of immovable properties and some cash should not be declared as illegally acquired
properties and are hence liable to be forfeited to the Central Government on the ground that those properties were acquired by means of income
derived from activities prohibited by law. Both appellants submitted their replies. The competent authority appointed under SAFEMA, after
considering the explanation of the appellants, orders those properties to be forefeited to the Central Government after declaring that those
properties were illegally acquired.
4. Appellants preferred a statutory appeal before the appellate tribunal constituted u/s 12 of SAFEMA. By Ext. P5 order, the appellate tribunal
accepted the explanation of second appellant in respect of one of the items of urban properties and released the same from forfeiture. However,
the appellate authority confirmed the order of forfeiture in regard to the remaining three items. It is the said part of Ext. P5 which has been
challenged by the appellants in the original petition.
5. Learned counsel for the appellants submitted at the outset that he is pressing his contentions only as regards two items of garden land (the other
third item is only a small amount of cash).
(i) A garden land having an extent of 1.7 acres acquired by the first appellant on 29-11-1973 for a consideration shown in the document as
Rupees 15,500/-. .
(ii) A garden land of 58 cents which the second appellant purchased on 21-5-1974 for Rupees 20,000/-.
6. Both the above properties are urban lands situated within the limits of Calicut Corporation. According to the first appellant, he had made lawful
earnings out of his watch repair works and he had made some savings from the income derived through sale of coconuts collected from his other
garden land and the sale consideration needed for the first item was made up. According to the second appellant, she could make some earnings
from her own business and she added to it what her father provided. Thus, the sale consideration needed for acquiring the second item was made
up.
7. Appellate tribunal, which accepted the explanation of the appellants in regard to another urban land acquired during the relevant period, was not
persuaded to accept the explanation for the remaining two items of immovable properties. Appellate tribunal pointed out that the meagre income of
the first appellant derived from watch repair work as well as the income from the coconut trees has to be utilised for the expenses of the family of
the appellants which is a large family. There is no dispute that appellants'' family consists of themselves and their 7 children. They adopted a
contention that the family expenses were met by the father-in-law of the first appellant. The appellate tribunal pointed out that the said father-in-law
was only a retired teacher and his pension as well as a small amount which he was gelling every month out of his work as Imam of a mosque was
too meagre for his own expenses.
8. Section 8 of SAFEMA casts burden of proof on the person affected to show that any property specified in the notice served u/s 6 is not illegally
acquired property. Learned counsel contended that in the light of the Constitution Bench decision in Attorney General for India v. Amratlal
Prajivandas (cited supra) the burden on the second appellant will stand discharged by saying that she acquired the property not with the money
provided by her husband, the detenu.
9. SAFEMA was enacted y Parliament to provide for forfeiture of illegally acquired properties of smugglers etc. The expression ""illegally acquired
property"" has been defined in Section 3(a) as a property, in relation to any person to whom the Act applies. ""illegally acquired property"" means
any property acquired by such person ""wholly or partly out of or by means of any income"" attributable to any act prescribed by law. Persons to
whom the Act applies are enumerated in section 2. They include every person in respect of whom an order of detention has been made under the
COFEPOSA and every person who is a relative of him. The word ""relative"" includes the spouse of the person. There is, therefore, no dispute that
appellants are person to whom SAFEMA applies, Section 9 provides that where the competent authority makes a declaration u/s 7 that a
property would stand forfeited to Central Government, it shall make an order giving an option to the affected person to pay, in lieu of forfeiture, a
fine equal tone and one-fifth the value of such part of the income with which the property was acquired. Section 9 applies only when a competent
authority makes a declaration that the property stands forfeited and it is a case where the source of only a part, ""being less than one half of the
income, earnings or assets with which such property was acquired has not been proved to the satisfaction of the competent authority"". In other
words, where the competent authority takes the view that the property forfeited was acquired entirely with the income derived through prohibited
activities, Section 9 has no application.
10. This is a case where neither the competent authority nor the appellate tribunal has entered upon a finding that only a part of the source which is
less than one-half of the sale consideration is the income derived from activities prohibited by law. Learned counsel contended that the authorities
should have considered and entered upon a finding whether option should have been given to the appellants of not. According to us, the question
of option would arise only when there is a positive finding regarding the primary aspect. Authorities are hence not obliged to give any option to the
concerned person unless they have reached a finding that income from smuggling was used only to make up less than half the sale consideration.
11. Learned counsel for the appellants made an endeavour to show that the income of the appellants form Private sources was enough to raise the
sale consideration used for acquiring the two items of properties. The fact finding authorities have considered in detail the above aspects and
reached a finding adverse to the appellants. The contention that the family expenses were met by the father-in-law of the first appellant was
repelled by the appellate tribunal which assessed the entire income of the said father-in-law and pointed out that he himself had to maintain his own
family with such a meagre income. The burden is entirely on the appellants to prove that the income which the first appellant derived from
smuggling activities had not been used for acquiring the land. Such burden would not be discharged by merely saying that his father-in-law was
meeting all his domestic expenses and so his own income entirely became saving. The said contention was totally unacceptable to the fact finding
authorities. We are not persuaded to interfere with the finding.
In the result, we dismiss this appeal.
