BISWANATH BHATTACHARYA versus UNION OF INDIA & OTHERS

Leave granted.

p. 897, margin E

These two appeals are preferred against the final judgment dated 9th August 2007 passed by the Calcutta High Court in FMA No.206 of 2003 and order dated 30th August 2007 in Review Application bearing RVW No.2372 of 2007 dismissing the said review application filed by the appellant herein.

p. 897, margin E

The facts leading to the instant litigation are as follows:

p. 897, margin G

The appellant was initially detained by order dated 19.12.1974 under the provisions of the Maintenance of Internal Security Act, 1971 (since repealed) and later under the provisions of the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (hereinafter referred to as the "COFEPOSA") on the ground that he in collaboration with his brother, who was living in London at that point of time, was indulging in activities which are prejudicial to the conservation of foreign exchange. The appellant unsuccessfully challenged the detention order. He was eventually released in 1977.

pp. 897–898, margin G

While he was in custody, the second respondent issued a notice dated 4th March 1977 under section 6(1) of the Smugglers and Foreign Exchange Manipulators (Forefeiture of Property) Act, 1976 (hereinafter referred to as "the Act") calling upon the appellant to explain the sources of his income out of which he had acquired the assets described in the schedule to the notice. Some correspondence ensued between the second respondent on one hand and the wife of the appellant and the appellant on the other hand, the details of which may not be necessary for the time being.

p. 898, margin B

Eventually on 27th November 1989, the second respondent passed an order under section 7(1) of the Act forfeiting the properties mentioned in the schedule to the said order.

p. 898, margin D

Aggrieved by the said order, an appeal was carried to the Appellate Tribunal constituted under section 12 of the Act. The appeal was partly allowed setting aside the forfeiture of two items of the properties.

p. 898, margin E

Not satisfied with the Appellate Authority's conclusion, the appellant challenged the same in writ petition No. C.O. No.10543 (W) of 1991 before the High Court of Calcutta. In the said writ petition, the appellant also prayed for two declarations (1) that the Act is illegal and ultra vires the Constitution and (2) that the detention of the appellant under the COFEPOSA by the order dated 19th December 1974 was illegal and void - a collateral and second round of attack.

p. 898, margin F

Learned Single Judge of the Calcutta High Court by an order dated 1oth May 2002 partly allowed the writ petition holding that the forfeiture of the property by the second respondent as confirmed by the Appellate Tribunal was illegal on the ground that the notice under section 6(1) of the Act dated 4th March 1977 was not in accordance with the law as the notice did not contain the reasons which constituted the basis for the belief of the competent authority that the appellant illegally acquired the scheduled properties.

pp. 898–899, margin F

Aggrieved by the order of the learned Single Judge, the respondents herein carried the matter in appeal to the Division Bench. By the judgment under appeal, the appeal was allowed.

p. 899, margin B

It appears from the judgment under appeal that though the appellant sought a declaration that the Act (SAFEMA) is unconstitutional, such a plea was not pressed before the learned Single Judge.

p. 899, margin C

Before us, the appellant made three submissions - (1) that the notice issued under Section 6 of the Act is defective and therefore illegal as the notice did not contain the reasons which made the competent authority believe that the notice scheduled properties are illegally acquired properties. In other words, the reasons were not communicated to the appellant; (2) that the forfeiture, such as the one provided under the Act, is violative of Article 20 of the Constitution of India; and (3) in the alternative, it is argued - that the High Court failed to consider the question whether the decision of the competent authority as confirmed by the appellate authority is sustainable and therefore, the matter is required to be remitted to the High Court for an appropriate consideration of the legality of of forfeiture.

pp. 899–900, margin D

Regarding the non communication of the reasons, judgment under appeal recorded as follows: "The matter may be looked into from another angle. In 1976 he was under detention. His wife replied to said notice without complaining of non-supply of reasoning. After his release the respondent No.1 gave a further rejoinder by adopting what had been said by his wife authority did not proceed against him until he was served with the reasoning in 1988. The respondent No.1 was afforded opportunity to deal with the reasonings in rejoinder. The competent authority after affording opportunity of hearing passed a detailed reasoned order. He preferred an appeal. The appeal was allowed in that too by a detailed reasoned order. Hence, we do find any reason to hold that the fundamental right of respondent No.1 was infringed." It appears from the record that initially notice dated 4.3.1977 under Section 6(1) was issued at a point of time when appellant was under preventive detention. Subsequently, communication dated 1st June, 1988, the recorded reasons the belief which led to the issuance of notice under Section of the Act was served on the appellant. The appellant not filed a rejoinder to the said notice but he was also given hearing before an order of forfeiture under Section 7 passed. It is in the background of the abovementioned we are required to consider the submission that the High Court erred in coming to the conclusion that notice under Section did not vitiate the subsequent proceedings.

p. 900, margin A

In support of the submission, learned counsel for the appellant very heavily relied upon a judgment of this Court in Ajantha Industries and others v. Central Board of Direct Taxes and others, (1976) 1 sec 1001. It was a case where this court had to consider the legality of the order under Section 127 transferring the 'case' of the Ajantha Industries.

p. 901, margin A

Section 127 of the Income Tax Act, 1961 empowers the authorities (mentioned therein) to transfer "any case" (explained in the said section) from one Income Tax Officer to another. Further, the section stipulates that before such an order of transfer is made, two conditions are required to be complied with - (1) that the assessee must be given a reasonable opportunity to explain why his case should not be transferred; and (2) the authority transferring the case is required to record the reasons which led him to initiate the proceedings. It appears from the judgment that though first of the abovementioned two requirements was complied with, it was found that no reasons were recorded much less communicated, Dealing with the legality of such an order, this Court held that there is a requirement of not only recording the reasons for the decision to transfer the case but also such reasons are ,required to be communicated to the assessee.

p. 901, margin B

Though section 127 expressly provided for recording of reasons it did not expressly provide communicating the same to the assessee. Still, this Court held that such a communication is mandatory. "10. The reason for recording of reasons in the order and Show cause notice was served in 1976. It was not proceeded with till 1988 wnen reasons were supplied. Order was passed by the competent authority upon affording adequate opportunity of hearing. The respondent No.1 availed the remedy of appeal where his appeal was partly allowed. With deepest regard we have for the learned single Judge, His Lordship was perhaps not right in interfering with the show cause notice at the stage when the respondent No.1 availed of the remedies in law and became partly succesful before the appellate authority. making these reasons known to the assessee is to enable an opportunity to the assessee to approach the High Court under its writ jurisdiction under Article 226 of the Constitution or even this Court under Article 136 of the Constitution in an appropriate case for challenging the order, inter alia, either on the ground that it is mala fide or arbitrary or that it is based on irrelevant and extraneous considerations. Whether such a writ or special leave application ultimately fails is not relevant for a decision of the question. 11. We are clearly of opinion that the requirement of recording reasons under Section 127(1) is a mandatory direction under the law."

pp. 901–902, margin E

In our view, such a conclusion must be understood in the light of the observation of the Court that there was no provision of appeal or revision under the Income Tax Act against an order of transfer. For the same reason, this Court distinguished and declined to follow an earlier judgment in S. Narayanappa v. The Commissioner of Income-tax AIR 1967 SC 523 where this Court on an interpretation of Section 34 of the Income Tax Act, 1922, opined to the contra. Section 34 provided for re-opening of the assessment with the prior sanction of the Commissioner, if the income tax officer has 'reasons to believe' that taxable income had been underassessed. Dealing with the question whether the reasons which led the Commissioner to accord sanction for th~ initiation of proceedings under section 34 are required to be communicated to the assessee, this Court held - "There is no requirement in any of the provisions of the Act or any section laying down as a condition for the initiation of the proceedings that the reasons which induced the Commissioner to accord sanction to proceed under S.34 must be communicated to the assessee."

p. 902, margin C

In Ajantha Industries case, Narayanappa's case was distinguished on the ground - "When an order under Section 34 is made the aggrieved assessee can agitate the matter in appeal against the assessment order, but an assessee against whom an order of transfer is made has no such remedy under the Act to question the order of transfer. Besides, the aggrieved assessee on receipt of the notice under Section 34 may even satisfy the Income-tax Offier that there were no reasons for reopening the assessment. Such an opportunity is not available to an assessee under Section 127(1) of the Act. The above decision is, therefore, clearly distinguishable."

p. 903, margin A

We reject the submission of the appellant for the following reasons. Firstly, there is no express statutory requirement to communicate the reasons which led to the issuance of notice under Section 6 of the Act. Secondly, the reasons, though not initially supplied alongwith the notice dated 4.3.1977, were subsequently supplied thereby enabling the appellant to effectively meet the case of the respondents. Thirdly, we are of the opinion that the case on hand is squarely covered by the ratio of Narayanappa case. The appellant could have effectively convinced the respondents by producing the appropriate material that further steps in furtherance to the notice under Section 6 need not be taken. Apart from that, an order of forfeiture is an appealable order where the correctness of the decision under Section 7 to forfeit the properties could be examined. We do not see anything in the ratio of Ajantha Industries case which lays down a universal principle that whenever a statute requires some reasons to be recorded before initiating action, the reasons must necessarily be communicated.

p. 903, margin B

Now, we deal with the second submission. The Act enables the Government of India to forfeit "illegally acquired property" of any person to whom the Act is made applicable. A The Act is made applicable to the persons specified in section 2(2) Five categories of persons are covered thereunder. Clause (a) - persons who have been convicted under various enactments referred to therein; clause (b) - persons in respect B Section Application-(1) provisions of this Act shall apply only to the persons specified sub-section (2). persons referred to sub-section are the following, namely:every person- (i) convicted under the Sea Customs of 1878), or the Customs 1962 of of offence relation to goods - c of a exceeding one of ruppes; or M convicted under the Foreign Exchange Regulation 1947(7of1947), or the Regulation (46of1973), of offence, the amount of value involved which exceeds one lakh of rupees; or have convicted under the Customs of 1878), or the Customs Act, 1962 of 1962), convicted subsequently under either of those, Acts; or (iv) having convicted under the Foreign Exchange Regulation Act, (7of1947), or the Foreign Exchange Regulation 1973 (46 of 1973), convicted subeqeuntly under either of those Acts; (b) every person respect of whom order of detention been made under Conservation of Foreign Exchange prevention of Smuggling Activities 1974 (52of1974): Provided that- (i) order of detention being order to which the provisions of section 9 or section of the said Act do not apply, not the report of the Advisory Board under section 8 of the said Act or before the receipt of the Advisory or before making a reference to the Advisory Board: (ii) order of detention order to which the provisions of section 9 of the said Act apply, not been revoked before the expiry of the time for, or the basis the review under sub-section of section 9 or the report of the Advisory under section with sub-section of section 9 of the said Act; or such order of detention, being order to which the provisions of section of the said Act apply, not been revoked before the expiry of the time for, or the basis of, the first review under sub-section of that section, or the basis of the report of the Advisory Board under section 8, sub-section of section of that Act; or of whom an order of detention has been made under the A 1.-For 2.-For menas- 3.-For means- COFEPOSA (subject to certain conditions/exceptions the details of which are not necessary for our purpose); clause (c) - persons who are relatives of persons referred to in clause (a) or clause (b). Expression "relative" is itself explained in explanation 2. Clause (d) - every associate of persons referred to in clause (a) or clause (b). Once again the expression "associate" is explained under explanation 3 to sub-section (2). Clause (e) - subsequent holders of property which at some point of time belonged to persons referred to either in clause (a) or clause (b).

pp. 903–906, margin G

Section 4 makes it unlawful (for any person to whom the Act applies) to hold any illegally acquired property and it further declares that such property shall be liable to be forfeited to the Central Government (following the procedure prescribed under the Act). The procedure is contained under sections 6 and 7 of the Act. Section 8 prescribes the special rule of evidence which shifts the burden of proving that any property specified in the notice under section 6 is not illegally acquired property of the noticee. Section 6 inter alia postulates that where,- 4.- it of having regard to the value of the property held by any person (to whom the Act applies) and his known sources of income, if the "competent authority" (notified under section 5) has reason to believe that such properties are "illegally acquired properties", the competent authority is authorized to call upon the holder of the property to 'indicate' the source of his income etc. which enabled the acquisition of such property along with necessary evidence. It also authorizes the competent authority to call upon the noticee to show cause as to why all or any of such properties mentioned in the notice should not be declared illegally acquired properties and be forfeited to the Central Government. Section 7 provides for a reasonable opportunity of being heard after the receipt of response to the notice under section 6 to the noticee and requires the competent authority to record a finding whether all or any of the properties in question are illegally acquired properties. Section 7 also provides for certain incidental matters the details of which are not necessary for the present purpose.

pp. 906–907, margin C

Expression "illegally acquired property" is defined in elaborate terms under the Act4. Broadly speaking the definition covers two types of properties: means,of of of of of of 1) acquired by the income or earnings; and 2) assets derived or obtained from or attributable to any activity which is prohibited by or under a law in force. Such law must be a law with respect to which parliament has the power to make law. A complete analysis of the definition in all its facets may not be necessary for our purpose.

pp. 907–908, margin C

From the language and the scheme of the Act it does not appear that the application of the Act is limited to persons who either suffered a conviction under one of the acts specified in section 2(2)(a) the Act or detained under the COFEPOSA subsequent to the commencement of the Act in question. On the other hand, explanation 4 to section 2 expressly declares as follows: "Explanation 4.-For the avoidance of doubt, it is hereby provided that the question whether any person is a person to whom the provisions of this Act apply may be determined with reference to any facts, circumstances or events (including any conviction or detention which occurred or took place before the commencement of this Act)." Apart from that we have already taken note of the fact that there are other categories of persons to whom the Act applies.

pp. 908–909, margin B

The appellant happens to be a person to whom the Act applies. He was detained under the provisions of the COFEPOSA. However, such a detention was anterior to the commencement of the Act, which came into force on 25th January 1976, while the detention order was passed on 19th December 1974. It appears from the judgment under appeal that the appellant was eventually set at liberty in 1977.

p. 909, margin A

Section 7(3) of the Act provides for forfeiture of the illegally acquired property of the persons to whom the Act is made applicable after an appropriate enquiry contemplated under Sections 6 and 7 of the Act. In other words, the Act provides for the deprivation of the (illegally acquired) property of the persons to whom the Act applies. The question which we were called upon to deal with is whether such a deprivation is consistent with Article 20 of the Constitution of India in the specific factual setting of the case coupled with the explanation 4 to section 2 which reads as follows: "Explanation 4.-For the avoidance-of doubt, it is hereby provided that the question whether any person is a person to whom the provisions of this Act apply may be determined with reference to any facts, circumstances or events (including any conviction or detention which occurred or took place before the commencement of this Act)." The answer to the question depends upon whether such deprivation is a penalty within the meaning of the said expression occurring in Article 20.

pp. 909–910, margin C

Article 20 contains one of the most basic guarantees to the subjects of the Republic of India. The Article in so far as is relevant for our purpose stipulates two things:- • That no person shall be convicted of any offence except for violation of the law in force at the time of the commission of the act charged as an offence; and • That no person shall be subjected to a penalty greater than that which might have been inflicted under the law in force at the time of the commission of the offence.

p. 910, margin A

It is a well settled principle of constitutional law that sovereign legislative bodies can make laws with retrospective operation; and can make laws whose operation is dependent upon facts or events anterior to the rnaking of the law. However, criminal law is excepted from such general Rule, under another equally well settled principle of constitutional law, i.e. no ex post facto legislation is permissible with respect to criminal law. Article 20 contains such exception to the general authority of the sovereign legislature functioning under the Constitution to make retrospective or retroactive laws.

p. 910, margin E

The submission of the appellant is that since the Act provides for a forfeiture of the property of the appellant on the ground that the appellant was detained under the COFEPOSA, the proposed forfeiture is nothing but a penalty within the meaning of the expression under Article 20 of the Constitution. Such an inference is inevitable in the light of the definition of "illegally acquired property" which by definition (under the Act) is property acquired either "out of' or by means "of any income, earnings ... " "obtained from or attributable to any activity prohibited by or under any law ... ". On the other hand, if the forfeiture contemplated by the Act is not treated as a penalty for the alleged violation of law on the part of the appellant, it would be plain confiscation of the property of the appellant by the State without any factual justification or the constitutional authority. ·

pp. 910–911, margin G

The learned counsel for the appellant further argued that the forfeiture contemplated under the Act whether based on proven guilt or suspicion of involvement in a certain specified activity prohibited by the Customs Act can only be a 'penalty' attracting the prohibition of Article 20 of the Constitution of India. It is submitted that under Section 53 of the Indian Penal Code, forfeiture of property is one of the prescribed punishments for some of the offences covered under the Indian Penal Code.

p. 911, margin C

Learned counsel for the appellant placing reliance on R.S. Joshi, Sales Tax Officer, Gujarat and Others v. Ajit Mills Ltd. and Another, (1977) 4 sec 98 submitted that a Constitution Bench of this Court also opined the expression Section 53. Punishments.-The punishments to which offenders are liable under the provisions of this Code are- First-Death; Secondly.-lmprisonment for life; Thirdly.- Omitted Fourthly.-lmprisonment, is of descriptions, namely.- Rigorous, that with hard labour; Simple; Fifthly. -Forfeiture of property; Sixthly.-Fine. A "forfeiture" to mean "a penalty for breach of a prohibitory direction". ..

pp. 911–912, margin E

On the other hand, the learned Addi. Solicitor General appearing for the respondent submitted that the forfeiture contemplated under the Act is not a 'penalty' within the meaning of that expression occurring in Article 20 but only a deprivation of property of a legislatively identified class of persons - in the event of their inability to explain (to the satisfaction of the State) that they had legitimate sources of funds for the acquisition of , such property. The learned Addi. Solicitor General further submitted that while in the case of that class of persons covered under Section 2(2)(a) of the Act, the forfeiture though has a remote connection with the commission of a crime and conviction; with reference to the other four classes of persons to whom the Act is made applicable under Section 2(2) (b) to (e), the forfeiture has nothing to do with any crime or conviction. Therefore, to say that the forfeiture under the Act is hit by the prohibition under Article 20 is without any basis in law. The learned Addi. Solicitor General also relied upon The State of West Bengal v S.K. Ghosh, [AIR 1963 SC 255] and R.S. Joshi (supra) in support of his submission. Alternatively, the learned Addi. Solicitor General submitted that in view of the fact that the Act is included in the Ninth Schedule, the Act is immune from any attack on the ground that it violates any one of the fundamental rights contained in Part Ill of the Constitution of India, as was held by a Constitution Bench of this Court in Attorney General for India & Others v. Amratlal Prajivandas and others (1994) 5 sec 54.

pp. 913–914, margin A

Lord Green in Bidie v. General Accident, Fire and Life Assurance Corporation [(1948) 2 All ER 995 at 998] said in the context of ascertaining the meaning of an expression in any statute that "Few words in the English language have a natural or ordinary meaning in the sense that they must be so read that their meaning is entirely independent of their context".

p. 914, margin B

Chief Justice Sikri in His Holiness Kesavananda Bharati Sripadagalvaru v. State of Kera/a and another (1973) 4 SCC 225 dwelt on this subject referring to two English decisions and one American decision stating in substance that the meaning of a word occurring in a statute cannot be ascertained without examining the context and also the scheme of the Act in which the expression occurs.

p. 914, margin D

The regime of forfeiture of property contemplated under the Act is not new. At least from 1944 such a regime (though not identical but similar to the impugned one) is prevalent in this country. Two ordinances were made in 1943 and 1944, subsequently amended by another ordinance in 1945, all called Criminal Law Amendment Ordinances, which continued to be in force in this country by virtue of operation of Article 372 and some anterior laws - the details of which may not be necessary for the present purpose. Under the 1943 Ordinance, two special Tribunals were constituted to try cases allotted to them "in the first Schedule in respect of such charges of offence prescribed under the second Schedule etc.". Essentially, such cases were cases either of charge of receipt of illegal gratification by a public servant or embezzlement of public money etc. The 1944 Ordinance provided for the attachment of the money or other property which is believed to have been procured by means of one of the above mentioned scheduled offences by the offender. Such attached property is required to be disposed of as provided under section 13 of the said Ordinance. Under Section 12 of the Ordinance, the Criminal Court trying a scheduled offence is obliged to ascertain the amount or value of the property procured by the accused by means of the offence. Under section 13(3), it is provided that so much of the attached property referred to earlier equivalent to the value ascertained by the Criminal Court under section 12 is required to be forfeited to the State.

pp. 915–916, margin A

Dealing with the question - whether such forfeiture (in the factual setting of the case) violated Article 20 of the Constitution of India?, a Constitution Bench of this Court held that the forfeiture contemplated in the Ordinance was not a penalty within the meaning of Article 20 but it is only a speedier mode of recovery of the money embezzled by the accused.

p. 916, margin A

In R.S. Joshi case, the question was whether it was permissible for the State Legislature to enact that sums collected by dealers by way of sales tax but are not exigible under the State Law - indeed prohibited by it - shall be forfeited to the exchequer.

p. 916, margin C

The question -whether such a forfeitt:re was a penalty violating Article 20 did not arise in the facts of that case. The discussion revolved around the question - whether such a forfeiture is a penalty for the violation of a prohibition contained under section 46 of the relevant Sales Tax Act? The contravention of section 46 is made punishable with imprisonment and fine under section 63 of the said Act. Apart from that, section 37 of the said Act provided for a departmental proceeding against the dealers who violated the prohibition under section 46. The said departmental proceeding could result in the forfeiture of". any sums collected by any person ... by way of tax in contravention of section 46 .. ".The legal issue before this Court was - whether the State Legislature had necessary competence to provide for such forfeiture? The answer to the query depended upon whether such a forfeiture is a penalty for the violation of law made by the State for the levy and collection of sales tax. If it is not a penalty but a plain transfer of money (illegally collected by the dealer) to the State it would be incompetent for the legislature to make such a provision in the light of an earlier Constitution Bench decision of this Court in R. Abdul Quader & Co. v. STO, AIR 1964 SC 922. of

pp. 916–917, margin D

As explained above, the issue and the ratio decidendi of R.S. Joshi case is entirely different and has nothing to do with the application of Article 20 of the Constitution of India.

p. 918

To understand the exact nature of the forfeiture contemplated under the (SAFEMA) Act it is necessary to examine the nature of the property which is sought to be forfeited and also the persons from whom such forfeiture is sought to be made. As already noticed, the Act is made applicable to five classes of persons specified under section 2. In other words, the properties of persons belonging to any one of the said five categories only could be forfeited under the Act. Even with reference to the properties held by any one falling under any of the abovementioned five categories, their entire property cannot be forfeited except the property which is determined to be illegally acquired property as defined under section 3(c) of the Act. Of all the five categories of persons to whom the Act is made applicable, only one category specified under section 2(2)(a) happens to be of persons who are found guilty of an offence under one of the enactments mentioned therein and convicted. The other four categories of persons to whom the Act is applicable are persons unconnected with any crime or conviction under any law while the category of persons be falling under section 2(2)(b) are persons who are believed by A the State to be violators of law. The other three categories are simply persons who are associated with either of the two categories mentioned in section 2(2)(a) and (b). At least with reference to the four categories other than the one covered by section 2(2)(a), the forfeiture/deprivation of the property is not B a consequence of any conviction for an offence.

pp. 918–919

Therefore, with reference to these four categories, the question of violation of Article 20 does not arise. Insofar as first category mentioned above, in our opinion, Article 20 would have C no application for the reason, conviction is only a factor by which the Parliament chose to identify the persons to whom the Act be made applicable. The Act does not provide for the confiscation of the properties of all the convicts falling under Section 2(2)(a) or detenues falling under Section 2(2)(b). Section 6 of the Act authorises the competent authority to D initiate proceedings of forfeiture only if it has reasons to believe (such reasons for belief are required to be recorded in writing) that all or some of the properties of the persons to whom the Act is applicable are illegally acquired properties. The conviction or the preventive detention contemplated under E Section 2 is not the basis or cause of the confiscation but the factual basis for a rebuttable presumption to enable the State to initiate proceedings to examine whether the properties held by such persons are illegally acquired properties. It is notorious that people carrying on activities such as smuggling to make F money are very qlandestine in their activity. Direct proof is difficult if not impossible. The nature of the activity and the harm it does to the community provide a sufficiently rational basis for the legislature to make such an assumption. More particularly, Section 6 specifically stipulates the parameters which should G guide the competent authority in forming an opinion, they are; the value of the property and the known sources of the income, earnings etc. of the person who is sought to be proceeded against. Even in the case of such persons, the Act does not mandate such an enquiry against all the assets of such persons. H A An enquiry is limited to such of the assets which the competent authority believes (to start with) are beyond the financial ability of the holder having regard to his known and legitimate sources of income, earnings etc. Connection with the conviction is too remote and, therefore, in our opinion, would not be hit by the prohibition contained under Article 20 of the Constitution of India.

pp. 919–920

If a subject acquires property by means which are not legally approved, sovereign would be perfectly justified to deprive such persons of the enjoyment of such ill-gotten wealth. C There is a public interest in ensuring that persons who cannot establish that they have legitimate sources to acquire the assets held by them do not enjoy such wealth. Such a deprivation, in our opinion, would certainly be consistent with the requirement of Article 300A and 14 of the Constitution which prevent the D State from arbitrarily depriving a subject of his property.

p. 920, margin B

Whether there is a right to hold property which is the product of crime is a question examined in many jurisdictions. To understand the substance of such examination, we can profitably extract from an article published in the Journal of Financial Crime, 2004 by Anthony Kennedy. " . .It has been suggested that a logical interpretation of Art. 1 of the First Protocol of the European Convention on Human Rights is: 'Everyone is entitled to own whatever property they have (lawfully) acquired .... .' hence implying that they do not have a right under Art. 1 to own property which has been unlawfully acquired. This point was argued in the Irish High Court in Gilligan v The Criminal Assets Bureau, namely that where a defendant is in possession or control over assets which directly or indirectly constitute the proceeds of crime, he has no property rights in those assets and no valid title to them, whether protected by the Irish Constitution or by any other law. A similar view seems to have been expressed earlier in a dissenting opinion in Welch v United Kingdom : 'in my opinion, the confiscation of property acquired by crime, even without express prior legislation is not contrary to Article 7 of the Convention, nor to Article 1 of the First Protocol.' This principle has also been explored in US jurisprudence. In United States v. Vanhorn a defendant convicted of fraud and money laundering was not entitled to the return of the seized proceeds since they amounted to contraband which he had no right to possess. In United States v Dusenbery the court held that, because the respondent conceded that he used drug proceeds to purchase a car and other personal property, he had no ownership interest in the property and thus could not seek a remedy against the government's decision to destroy the property without recourse to formal forfeiture proceedings. The UK government has impliedly adopted this perspective, stating that: ' .... It is important to bear in mind the purpose of civil recovery, namely to establish as a matter of civil law that there is no right to enjoy property that derives from unlawful conduct."

pp. 920–921, margin B

Non-conviction based asset forfeiture model also known as Civil Forfeiture Legislation gained currency in various countries: United States of America, Italy, Ireland, South Africa, UK, Australia and certain provinces of Canada.

p. 921, margin G

Anthony Kennedy conceptualised the civil forfeiture regime in the following words:- Civil forfeiture represents a move from a crime and punishment model of justice to a preventive model of justice. It seeks to take illegally obtained property out of the possession of organised crime figures so as to prevent them, first, from using it as working capital for future crimes and, secondly, from flaunting it in such a way as they become role models for others to follow into a lifestyle of acquisitive crime. Civil recovery is therefore not aimed at punishing behaviour but at removing the 'trophies' of past criminal behaviour and the means to commit future criminal behaviour. While it would clearly be more desirable if successful criminal proceedings could be instituted, the operative theory is that 'half a loaf is better than no bread'."

p. 922, margin A

For all the above-mentioned reasons, we are of the opinion that the Act is not violative of Article 20 of the Constitution. Even otherwise as was rightly pointed out by the learned Addi. Solicitor General, in view of its inclusion in the IXth Schedule, the Act is immune from attack on the ground that it violates any of the rights guaranteed under Part Ill of the Constitution by virtue of the declaration under Article 31-B.

p. 922, margin D

Now we are required to consider the alternative and last submission i.e., in view of the failure of the High Court to examine the tenability of the order of the forfeiture as confirmed by the appellate tribunal the matter is required to be remitted to the High Court for appropriate consideration. This submission is required to be rejected. We have carefully gone through the copy of the writ petition (a copy of which is available on record) from which the instant appeal arises.

p. 922, margin E

Except challenging the order of forfeiture on the two legal grounds discussed earlier in this judgement, there is no other ground on which correctness of the order of forfeiture is assailed in the writ petition. For the first time in this appeal, an attempt is made to argue that the conclusions drawn by the competent authority that the properties forfeited are illegally acquired - is not justified on an appropriate appreciation of defence of the appellant. In other words, the appellant seeks reappreciation of the evidence without even an appropriate pleading in the writ petition. It is a different matter that the High Court in exercise of its writ jurisdiction does not normally reappreciate evidence. Looked at any angle, we see no reason to remit the matter to the High Court.

pp. 922–923, margin G

In the result, the appeals, being devoid of merit, are dismissed. D.G. Appeals dismissed.

p. 923, margin C