AJIT SINGH (DEAD) THROUGH HIS HEIRS AND LEGAL REPRESENTATIVES, Vs. UNION OF INDIA (UOI), THROUGH THE SECRETARY, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NEW DELHI,

JUDGEMENT

(1.) THE Petitioner (since deceased) through his legal representatives has challenged the constitutional validity of sub -section (6 -A) of Section 12 of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (for short SAFEMA) in this petition under Article 226 of the Constitution. The Petitioner has also prayed for an appropriate writ directing that a Bench of the Appellate Tribunal for Forfeited Property constituted under Section 12 (6 -A) of SAFEMA should be headed by a member having judicial experience which was not so in his case. In addition to these two prayers, the Petitioner has also challenged, on merits, the correctness of the order dated 30th October, 1996 passed by the Appellate Tribunal for Forfeited Property (hereinafter referred to as the Tribunal).

(2.) THE Petitioner was preventively detained in 1974 under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (for short COFEPOSA) but his detention was revoked by the appropriate authority. Two sons of the Petitioner, namely, Satbir Singh and Paramjit Singh were also preventively detained under the provisions of COFEPOSA but they served out the period of detention. The Petitioner was, Therefore, a person affected within the meaning of Section 2(2)(c) of SAFEMA. On these basic facts, the Competent Authority under SAFEMA issued a notice to the Petitioner under the provisions of Section 6(1) of SAFEMA in which it was mentioned that the Petitioner had acquired the following assets:

(3.) ACCORDING to the Competent Authority, the Petitioner had some concealed income which he disclosed to the Income Tax authorities in 1968 with a request for spreading the income over various years. The concealed income was assessed at Rs.1,36,000/ - and was spread over the assessment years 1958 -59 to 1963 -64 and penalty was suitably imposed on him. The Petitioner's income for the subsequent assessment years, that is, 1964 -65 to 1969 -70 was a total of about Rs.37,000/ - and for the assessment years 1970 -71 to 1973 -74, no return of income had been filed. The Competent Authority was of the view that the Income Tax records of the Petitioner were silent with regard to the source of income for making such large investments in property and that the majority of the investments mentioned above were made in the period after 1964 -65. He was of the view that the Petitioner's income was too meagre even for household expenses let alone for making investments in real estate. Consequently, it appeared to the Competent Authority that the investments made by the Petitioner were out of income generated from sources other than his known sources of income and were illegally acquired. A notice was, Therefore, given to him to show cause why the properties mentioned above be not acquired and forfeited to the Central Government without any encumbrances.