KAPILDEO SINGH AND CO Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioners, M/s. Kapildeo Singh and Company have filed this petition under Articles 226 and 227 of the Constitution of India for quashing (1) notice dated 3-3-1980 issued by the competent authority, Calcutta (Respondent No. 4) under Section 6 (1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property (Act, 1976 (hereinafter to be referred as SAFEMA) contained in Annexure-1, (2) the order dated 14-1-1986 passed by the competent authority. Calcutta (Respondent No. 4) under Section 7 (1) and (3) of SAFEMA contained in Annexure-6 and (3) the order dated 20-4-1987 passed by the Appellate Tribunal for forfeited property, New Delhi (Respondent No. 3) under Section 7 (1) of SAFEMA contained in Annexure-7 to this writ petition.

(2.) It has been stated in the petition that a partnership firm, namely, Kapildeo Singh and Co. was started on 15th January, 1973 with 12 partner. The actual deed of partnership was executed on 28-2-1973 and it was registered under the Income Tax Act. Out of 12 partners, Kapildeo Singh had 9% share each in the profit and loss, while 8 others had 8 % share each. The firm has got its office at Khorampur, P. S. Natihani, District Begusarai. One of the partners Bhushan Chaudbary had been ousted by the firm along with his all interest etc. Bhushan Chaudhary had been seized from the partnership of the said firm on the basis of the notice under Section 6 (1) of the SAFEMA issued to him by the competent authority, Calcutta, respondent In 1977, Rajnity Chaudhary one of the partners died and subsequently a fresh partnership deed was executed on 1-11-1980 and only ten partners were still continued in the said firm. On 3-3-1980, the officer on special duty, competent authority Calcutta issued a notice under Section 6 (1) of the SAFEMA in the name of M/s. Kapildeo Singh & Co. asking the firm to explain the source of income, earnings or assets out of which or by means of which the same have acquired the property/properties, the evidence on which the other relevant information and particulars and to show cause why the aforesaid property/properties should not be held to be illegally acquired property/properties and forfeited by the Central Government under the said Act. On 16 4-1980, Kapildeo Singh on behalf of the firm sent a reply in the form of show cause to the competent authority (respondent No 4) saying that the firm did not coma within the perview of the said Act as it is registered firm under Section 185 (1) of the Income Tax Act, and the assessment has already been complied upto assessment year 1978-79 and the matter has been explained and is accepted by the Income Tax Officer, Begusarai. On 19-1-1978 the firm deposited Rs. 98.000/- in the State Bank of India, Begusarai being income from the other sources. The Income Tax Officer, Begusarai has taken the amount as income from other sources against which an appeal had been filed before the Appellate Authority. Further, it was said that the Company has got account in the State Bank of India Begusarai Branch and also at Katihar. Here, the Company has also its account in the Allahabad Bank. The competent authority did not accept in the show cause and issued notice under Section 6(1) of the SAFEMA on 3-3-1980 and then passed the order dated 14-1-1986, Annexure 6, said to be in contravention of the provisions of Section 2 (1) (b) and 7 (1) (3) of the Act and also ordered that all the assets of the firm shall stand forfeited to the Central Government. Against that order dated 14-1-1986, the firm filed an appeal before the Appellate Tribunal which affirmed the said order of 29-4-1987 Annexure 7. These orders were challenged on the grounds that the proceedings initiated under Section 6 (1) of the SAFEMA were illegal, null and abinitio void and also unconstitutional, contrary to the provisions of Sections (i) (b) of the SAFEMA. Further, the detention order passed against Bhushan Chaudhary under Section 3 (1) read with Section 12-A (2) of the Conservation of Foreign Exchange And Prevention of Smuggling Activities Act (for short to be referred as COFEPOSA), had been revoked and information in respect there of had been sent to the respondent No. 4 vide Annexure-5. The order contained in Annexure-6 as said, does not contain the finding of the maintainability of the proceedings initiated under Section 6 (1) of the SAFEMA. The order of the Appellate Tribunal has been alleged to be illegal and liable to be quashed.

(3.) Tn spite of notice being served upon respondents, only respondent No. 5, the Bank, has alone filed counter affidavit to the effect that the petitioners have filed civil suit being Title Suit No. 28 of 1986 in the court of the Subordinate Judge, Begusarai practically for the same relief. It is said that the said suit was contested by the Bank by filing written statement and so, this petition was not maintainable. It was also said that a sum of Rs. 98,000/- was deposited by the petitioners through 98 currency notes of Rs. 1000/- which were subsequently credited in the current account of the firm. The said Rs. 98,000/- were attached by the Commissioner of Income Tax, Patna on 4-5-1978 vide ITO, Begusarai letter No. 173 dated 4-5-1978 & subsequently a sum of Rs. 5198/- was paid to the Income Tax Officer, Begusarai on 16-9-1978 in terms of I. T. O. Begusarai Leter No. 885 dated 13-9-1978 and the balance amount of Rs. 93302/- were remitted to the Deputy Director, Competent Authority, Calcutta under COFEPOSA and so there is no amount in the account of the petitioners.