[13 of 1976]
An Act to provide for the forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators and for matters connected therewith or incidental thereto;
Whereas
for the effective prevention of smuggling activities and foreign exchange
manipulations which are having a deleterious effect on the national economy it
is necessary to deprive persons engaged in such activities and manipulations of
their ill-gotten gains;
And
whereas such persons have been augmenting such gains by violations of
wealth-tax, income-tax or other laws or by other means and have thereby been
increasing their resources for operating in a clandestine manner;
And
whereas such persons have in many cases been holding the properties acquired by
them through such gains in the names of their relatives, associates and
confidants.
Be
it enacted by Parliament in the Twenty-sixth Year of the Republic of India as
follows :—
Short title, extent and commencement.
(1) This
Act may be called the Smugglers and Foreign Exchange Manipulators
(Forfeiture of Property) Act, 1976.
(2) It extends to the whole of India except the State of Jammu and
Kashmir.
(3) It shall be deemed to have come into force on the 5th day of
November, 1975.
(1) The provisions of this Act shall apply
only to the persons specified in sub-section (2).
(2) The persons referred to in sub-section (1) are the following,
namely :—
(a) every
person—
(i) who
has been convicted under the Sea Customs Act, 1878 (8 of 1878), or the Customs
Act, 1962 (52 of 1962), of an offence in relation to goods of a value exceeding
one lakh of rupees; or
(ii) who
has been convicted under the Foreign Exchange Regulation Act, 1947 (7 of 1947),
or the Foreign Exchange Regulation Act, 1973 (46 of 1973), of an offence, the
amount or value involved in which exceeds one lakh of rupees; or
(iii) who
having been convicted under the Sea Customs Act, 1878 (8 of 1878), or the
Customs Act, 1962 (52 of 1962), has been convicted subsequently under either of
those Acts; or
(iv) who
having been convicted under the Foreign Exchange Regulation Act, 1947 (7 of
1947), or the Foreign Exchange Regulation Act, 1973 (46 of 1973), has been
convicted subsequently under either of those Acts;
(b) every
person in respect of whom an order of detention has been made under the
Conservation of Foreign Exchange and Prevention of Smuggling Activities Act,
1974 (52 of 1974):
Provided that—
(i) such
order of detention, being an order to which the provisions of section 9 or
section 12A of the said Act do not apply, has not been revoked on the report of
the Advisory Board under section 8 of the said Act or before the receipt of the
report of the Advisory Board or before making a reference to the Advisory
Board; or
(ii) such
order of detention, being an order to which the provisions of section 9 of the
said Act apply, has not been revoked before the expiry of the time for, or on
the basis of, the review under sub-section (3) of section 9, or on the report
of the Advisory Board under section 8, read with sub-section (2) of section 9,
of the said Act; or
(iii) such
order of detention, being an order to which the provisions of section 12A of
the said Act apply, has not been revoked before the expiry of the time for, or
on the basis of, the first review under sub-section (3) of that section, or on
the basis of the report of the Advisory Board under section 8, read with
sub-section (6) of section 12A, of that Act; or
(iv) such
order of detention has not been set aside by a Court of competent jurisdiction;
(c) every
person who is a relative of person referred to in clause (a) or clause (b);
(d) every
associate of a person referred to in clause (a) or clause (b);
(e) any
holder (hereafter in this clause referred to as the present holder) of any property which was at any time previously
held by a person referred to in clause (a) or
clause (b) unless the present holder or, as the case may be, any one who held such property after such person and before
the present holder, is or was a transferee
in good faith for adequate consideration.
Explanation
1 : For the purposes of sub-clause (i) of clause (a), the value of any goods in
relation to which a person has been convicted of an offence shall be the
wholesale price of the goods in the ordinary course of trade in India as on the
date of the commission of the offence.
Explanation 2 : For the purposes of clause (c),
“relative”, in relation to a person, means—
(i) spouse
of the person;
(ii) brother
or sister of the person;
(iii) brother
or sister of the spouse of the person;
(iv) any
lineal ascendant or descendant of the person;
(v) any
lineal ascendant or descendant of the spouse of the person;
(vi) spouse of
a person referred to in clause (ii), clause (iii), clause (iv) or clause (v);
(vii) any
lineal descendant of a person referred to in clause (ii) or clause (iii).
Explanation 3 : For the purposes of clause (d),
“associate”, in relation to a person, means—
(i) any
individual who, had been or is residing in the residential premises (including
out-houses) of such person;
(ii) any
individual who had been or is managing the affairs or keeping the accounts of
such person;
(iii) any
association of persons, body of individuals, partnership firm, or private
company within the meaning of the Companies Act, 1956 (1 of 1956), of which
such person had been or is a member, partner or director;
(iv) any
individual who had been or is a member, partner or director of an association
of persons, body of individuals, partnership firm or private company referred
to in clause (iii) at any time when such person had been or is a member,
partner or director of such association, body, partnership firm or private
company;
(v) any
person who had been or is managing the affairs, or keeping the accounts, of any
association of persons, body of individuals, partnership firm or private
company referred to in clause (iii);
(vi) the
trustee of any trust, where,—
(a) the
trust has been created by such person; or
(b) the value
of the assets contributed by such person (including the value of the assets, if
any, contributed by him earlier) to the trust amounts, on the date on which the
contribution is made, to not less than twenty per cent of the value of the
assets of the trust on that date;
(vii) where
the competent authority, for reasons to be recorded in writing, considers that
any properties of such person are held on his behalf by any other person, such
other person.
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.
1[Act not to apply to certain persons.
On and from the commencement of the provisions of Chapter VA of the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985), the provisions of this Act shall not apply to persons in relation to whom any order, or proceeding, may be made or taken under that Chapter.]
(1) In this Act, unless the context otherwise
requires,—
(a) “Appellate
Tribunal” means the Appellate Tribunal for Forfeited Property constituted under
section 12;
(b) “competent
authority” means an officer of the Central Government authorised by it under
sub-section (1) of section 5 to perform the functions of a competent authority
under this Act;
(c) “illegally acquired property”, in
relation to any person to whom this Act applies, means—
(i) any
property acquired by such person, whether before or after the commencement of
this Act, wholly or partly out of or by means of any income, earnings or assets
derived or obtained from or attributable to any activity prohibited by or under
any law for the time being in force relating to any matter in respect of which
Parliament has power to make laws; or
(ii) any
property acquired by such person, whether before or after the commencement of
this Act, wholly or partly out of or by means of any income, earnings or assets
in respect of which any such law has been contravened; or
(iii) any
property acquired by such person, whether before or after the commencement of
this Act, wholly or partly out of or by means of any income, earnings or assets
the source of which cannot be proved and which cannot be shown to be
attributable to any act or thing done in respect of any matter in relation to
which Parliament has no power to make laws; or
(iv) any
property acquired by such person, whether before or after the commencement of
this Act, for a consideration, or by any means, wholly or partly traceable to
any property referred to in sub-clauses (i) to (iii) or the income or earnings
from such property;
and includes—
(A) any
property held by such person which would have been, in relation to any previous
holder thereof, illegally acquired property under this clause if such previous
holder had not ceased to hold it, unless such person or any other person who
held the property at any time after such previous holder or, where there are
two or more such previous holders, the last of such previous holders is or was
a transferee in good faith for adequate consideration;
(B) any
property acquired by such person, whether before or after the commencement of
this Act, for a consideration, or by any means, wholly or partly traceable to
any property falling under item (A), or the income or earnings therefrom ;
(d) “prescribed” means prescribed by rules
made under this Act ;
(e) “property” includes any interest in
property, movable or immovable ;
(f) “trust” includes any other legal
obligation.
(2) Any
reference in this Act to any law which is not in force in any area shall, in
relation to that area, be construed as a reference to the corresponding law, if
any, in force in that area.
(3) Any
reference in this Act to any officer or authority shall, in relation to any
area in which there is no officer or authority with the same designation, be
construed as a reference to such officer or authority as may be specified by
the Central Government by notification in the Official Gazette.
Prohibition of holding illegally acquired
property.
(1) As from
the commencement of this Act, it shall not be lawful for any person to
whom this Act applies to hold any illegally
acquired property either by himself or through any other person on his behalf.
(2) Where
any person holds any illegally acquired property in contravention of the
provisions of sub-section (1), such property shall be liable to be forfeited to
the Central Government in accordance with the provisions of this Act.
(1) The
Central Government may, by order published in the Official Gazette,
authorise as many officers of the
Central Government (not below the rank of a Joint Secretary to the Government),
as it thinks fit, to perform the functions of the competent authority under
this Act.
(2) The
competent authorities shall perform their functions in respect of such persons
or classes of persons as the Central Government may, by order, direct.
(1) If,
having regard to the value of the properties held by any person to whom this
Act applies, either by himself or through any other person on his behalf, his
known sources, of income, earnings or assets, and any other information or
material available to it as a result of action taken under section 18 or
otherwise, the competent authority has reason to believe (the reasons for such
belief to be recorded in writing) that all or any of such properties are
illegally acquired properties, it may serve a notice upon such person
(hereinafter referred to as the person affected) calling upon him within such
time as may be specified in the notice, which shall not be ordinarily less than
thirty days, to indicate the sources of his income, earnings or assets, out of
which or by means of which he has acquired such property, the evidence on which
he relies and other relevant information and particulars, and to show cause why
all or any of such properties, as the case may be, should not be declared to be
illegally acquired properties and forfeited to the Central Government under
this Act.
(2) Where a
notice under sub-section (1) to any person specifies any property as being held
on behalf of such person by any other person, a copy of the notice shall also
be served upon such other person.
Forfeiture of property in certain cases.
(1) The
competent authority may, after considering the explanation, if any, to the
show- cause notice issued under section
6, and the materials available before it and after giving to the person
affected (and in a case where the person affected holds any property specified
in the notice through any other person, to such other person also) a reasonable
opportunity of being heard, by order, record a finding whether all or any of
the properties in question are illegally acquired properties.
(2) Where
the competent authority is satisfied that some of the properties referred to in
the show-cause notice are illegally acquired properties but is not able to
identify specifically such properties, then, it shall be lawful for the
competent authority to specify the properties which, to the best of its
judgment, are illegally acquired properties and record a finding accordingly
under sub-section (1).
(3) Where
the competent authority records a finding under this section to the effect that
any property is illegally acquired property, it shall declare that such
property shall, subject to the provisions of this Act, stand forfeited to the
Central Government free from all encumbrances.
(4) Where
any shares in a company stand forfeited to the Central Government under this
Act, then, the company shall, notwithstanding anything contained in the
Companies Act, 1956 (1 of 1956), or the articles of association of the company,
forthwith register the Central Government as the transferee of such shares.
In any proceedings under this Act, the burden of proving that any property specified in the notice served under section 6 is not illegally acquired property shall be on the person affected.
(1) Where the competent authority makes
declaration that any property stands
forfeited to the
Central Government under section 7 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, it shall make an order giving an option to the person affected to pay,
in lieu of forfeiture, a fine equal to one
and one-fifth times the value of such part.
Explanation
: For the purposes of this sub-section, the value of any part of income,
earnings or assets, with which any property has been acquired, shall be,—
(a) in the
case of any part of income or earnings, the amount of such part of income or
earnings ;
(b) in the
case of any part of assets, the proportionate part of the full value of the
consideration for the acquisition of such assets.
(2) Before
making an order imposing a fine under sub-section (1), the person affected
shall be given a reasonable opportunity of being heard.
(3) Where
the person affected pays the fine due under sub-section (1), within such time
as may be allowed in that behalf, the competent authority may, by order, revoke
the declaration of forfeiture under section 7 and thereupon such property shall
stand released.
Procedure in relation to certain trust
properties.
Explanation
: For the purposes of this section “illegally acquired property”, in relation
to any property held in trust, includes—
(i) any
property which if it had continued to be held by the author of the trust or the
contributor of such property to the trust would have been illegally acquired
property in relation to such author or contributor ;
(ii) any
property acquired by the trust out of any contributions made by any person
which would have been illegally acquired property in relation to such person
had such person acquired such property out of such contributions.
Certain transfers to be null and void.
In the case of any person referred to in clause (vi) of Explanation 3 to sub-section (2) of section 2, if the competent authority, on the basis of the information and materials available to it, has reason to believe (the reasons for such belief to be recorded in writing) that any property held in trusts is illegally acquired property, it may serve a notice upon the author of the trust or, as the case may be, the contributor of the assets out of or by means of which such property was acquired by the trust and the trustees, calling upon them within such time as may be specified in the notice which shall not ordinarily be less than thirty days, to explain the source of the money or other assets out of or by means of which such property was acquired or, as the case may be, the source of the money or other assets which were contributed to the trust for acquiring such property and thereupon such notice shall be deemed to be a notice served under section 6 and all other provisions of this Act shall apply accordingly.
Where after
the issue of a notice under section 6 or under section 10, any property referred to in the said notice is
transferred by any mode whatsoever such transfer shall, for the purposes of the
proceedings under this Act, be ignored and if such property is subsequently
forfeited to the Central Government under section 7, then, the transfer of such
property shall be deemed to be null and void.
Constitution of Appellate Tribunal.
(1) The Central Government may, by
notification in the Official Gazette, constitute an Appellate Tribunal
to be called the Appellate Tribunal for Forfeited Property consisting of a
Chairman and such number of other members (being officers of the Central
Government not below the rank of a Joint Secretary to the Government) as the
Central Government thinks fit, to be appointed by that Government for hearing
appeals against the orders made under section 7, sub-section (1) of section 9
or section 10.
(2) The
Chairman of the Appellate Tribunal shall be a person who is or has been or is
qualified to be a judge of the Supreme Court or of a High Court.
(3) The
terms and conditions of service of the Chairman and other members shall be such
as may be prescribed.
(4) Any
person aggrieved by an order of the competent authority made under section 7,
sub-section (1) of section 9 or section 10, may, within forty-five days from
the date on which the order is served on him, prefer an appeal to the Appellate
Tribunal :
Provided that the Appellate Tribunal may entertain any appeal
after the said period of forty-five days, but not after sixty days, from the
date aforesaid if it is satisfied that the appellant was prevented by
sufficient cause from filing the appeal in time.
(5) On
receipt of an appeal under sub-section (4), the Appellate Tribunal may, after
giving an opportunity to the appellant to be heard, if he so desires, and after
making such further enquiry as it deems fit, confirm, modify or set aside the
order appealed against.
(6) The
powers and functions of the Appellate Tribunal may be exercised and discharged
by Benches consisting of three members and constituted by the Chairman of the
Appellate Tribunal.
(6A) Notwithstanding
anything contained in sub-section (6), where the Chairman considers it
necessary so to do for the expeditious disposal of appeals under this section,
he may constitute a Bench of two members and a Bench so constituted may
exercise and discharge the powers and functions of the Appellate Tribunal :
Provided that if the members of a Bench so constituted differ
on any point or points, they shall state the point or points on which they
differ and refer the same to a third members (to be specified by the Chairman )
for hearing on such point or points and such point or points shall be decided
according to the opinion of that member.
(7) The Appellate Tribunal may regulate its own procedure.
(8) On
application to the Appellate Tribunal and on payment of the prescribed fee, the
Tribunal may allow a party to any appeal or any person authorised in this
behalf by such party to inspect at any time during office hours, any relevant
records and registers of the Tribunal and obtain a certified copy of any part
thereof.
Notice
or order not to be invalid for error in description.
No notice issued or served, no declaration made, and no order passed, under this Act shall be deemed to be invalid by reason of any error in the description of the property or person mentioned therein if such property or person is identifiable from the description so mentioned.
No order passed or declaration made under this Act shall be appealable except as provided therein and no civil court shall have jurisdiction in respect of any matter which the Appellate Tribunal or any competent authority is empowered by or under the Act to determine, and no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.
Competent authority and Appellate Tribunal to have powers of civil court.
The competent authority and the Appellate Tribunal shall have all the powers of a civil court while trying a suit under the Code of Civil Procedure, 1908 (5 of 1908), in respect of the following matters, namely :—
(a) summoning
and enforcing the attendance of any person and examining him on oath ;
(b) requiring
the discovery and production of documents ;
(c) receiving
evidence on affidavits ;
(d) requisitioning
any public record or copy thereof from any court or office ;
(e) issuing
commissions for examination of witnesses or documents ;
(f) any
other matter which may be prescribed.
Information
to competent authority.
(1) Notwithstanding
anything contained in any other law, the competent authority shall have wer to require any officer or authority
of the Central Government or a State Government of a local authority to furnish
information in relation to such persons, points or matters as in the opinion of
the competent authority will be useful for, or relevant to, the purposes of
this Act.
(2) Any
officer of the Income-tax Department, the Customs Department or the Central
Excise Department or any officer of Enforcement appointed under the Foreign
Exchange Regulation Act, 1973 (46 of 1973), may furnish suo motu any
information available with him to the competent authority if in the opinion of
the officer such information will be useful to the competent authority for the
purposes of this Act.
Certain officers to assist competent authority and Appellate Tribunal.
For the purposes of any proceedings under this Act, the following officers are hereby empowered and required to assist the competent authority and the Appellate Tribunal, namely :—
(a) officers
of the Customs Department ;
(b) officers
of the Central Excise Department ;
(c) officers of the Income-tax Department ;
(d) officers
of Enforcement appointed under the Foreign Exchange Regulation Act, 1973 (46 of
1973) ;
(e) officers
of Police ;
(f) such
other officers of the Central or State Government as are specified by the
Central Government in this behalf by notification in the Official Gazette.
Power of competent authority to require certain officers to exercise certain powers.
(1) For the purposes of any proceedings under this Act or the initiation of any such pro- ceedings, the competent authority shall have power to cause to be conducted any inquiry, investigation or survey in respect of any person, place, property, assets, documents, books of account or any other relevant matters.
(2) For the
purposes referred to in sub-section (1), the competent authority may,
having regard to the nature of the
inquiry, investigation or survey, require an officer of the Income-tax
Department to conduct or cause to be conducted such inquiry, investigation or
survey.
(3) Any
officer of the Income-tax Department who is conducting or is causing to be
conducted any inquiry, investigation or survey required to be conducted under
sub-section (2), may, for the purpose of such inquiry, investigation or survey,
exercise any power (including the power to authorise the exercise of any power)
which may be exercised by him for any purpose under the Income-tax Act, 1961
(43 of 1961), and the provisions of the said Act shall, so far as may be, apply
accordingly.
(1) Where
any property has been declared to be forfeited to the Central Government under this Act, or where the person affected
has failed to pay the fine due under sub-section (1) of section 9 within the time allowed therefore under
sub-section (3) of that section, the competent
authority may order the person affected as well as any other person who may be in possession of the property to surrender
or deliver possession thereof to the competent authority or to any person duly
authorised by it in this behalf within thirty days of the service of the order.
(2) If any
person refuses or fails to comply with an order made under sub-section (1), the
competent authority may take possession of the property and may for that
purpose use such force as may be necessary.
(3) Notwithstanding
anything contained in sub-section (2), the competent authority may, for the
purpose of taking possession of any property referred to in sub-section (1),
requisition the service of any police officer to assist the competent authority
and it shall be the duty of such officer to comply with such requisition.
With a view to rectifying any mistakes apparent from the record, the competent authority or the Appellate Tribunal, as the case may be, may amend any order made by it within a period of one year from the date of the order :
Provided that if any such amendment is likely to affect any
person prejudicially, it shall not be made without giving to such person a
reasonable opportunity of being heard.
Findings under other laws not conclusive for proceedings under this Act.
No finding of any officer or authority under any other law shall be conclusive for the purposes of any proceedings under this Act.
Service of notices and orders.
Any
notice or order issued or made under this Act shall be served—
(a) by tendering
the notice or order or sending it by registered post to the person for whom it
is intended or to his agent ;
(b) if the
notice or order cannot be served in the manner provided in clause (a), by
affixing it on a conspicuous place in the property in relation to which the
notice or order is issued or made, or on some conspicuous part of the premises
in which the person for whom it is intended is known to have last resided or
carried on business or personally worked for gain.
Protection of action taken in good faith.
No suit, prosecution or other proceeding shall lie against the Central Government or any Officer of the Central or State Government for anything which is done, or intended to be done, in good faith, in pursuance of this Act or the rules made thereunder.
Act to have overriding effect.
The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.
Provisions of the Act not to apply to certain properties held in trust.
Nothing contained in this Act shall apply in relation to any property held by a trust or an institution created or established wholly for public, religious or charitable purposes if—
(i) such
property has been so held by such trust or institution from a date prior to the
commencement of this Act ; or
(ii) such
property is wholly traceable to any property held by such trust or institution
prior to the commencement of this Act.
(1) The
Central Government may, by notification in the Official Gazette, make rules to
carry out the provisions of this
Act.
(2) In
particular and without prejudice to the generality of the foregoing power, such
rules may provide for all or any of the following matters, namely :—
(a) the
terms and conditions of service of the Chairman and other members of the
Appellate Tribunal under sub-section (3) of section 12 ;
(aa) the fees
which shall be paid for the inspection of the records and registers of the
Appellate Tribunal or for obtaining a certified copy of any part thereof under
sub-section (8) of section 12 ;
(b) the
powers of a civil court that may be exercised by the competent authority and
the Appellate Tribunal under clause (f) of section 15 ;
(c) any
other matter which has to be, or may be, prescribed.
(3) Every
rule made under this Act shall be laid, as soon as may be after it is made,
before each House of Parliament, while it is in session, for a total period of
thirty days which may be comprised in one session or in two or more successive
sessions, and if, before the expiry of the session immediately following the
session or the successive sessions aforesaid, both Houses agree in making any
modification in the rule, or both Houses agree that the rule should not be
made, the rule shall thereafter have effect only in such modified form or be of
no effect, as the case may be ; so, however, that any such modification or
annulment shall be without prejudice to the validity of anything previously
done under that rule.
(1) The Smugglers
and Foreign Exchange Manipulators (Forfeiture of Property) Ordinance, 1975
(20 of 1975), is hereby repealed.
(2) Notwithstanding such repeal, anything done
or any action taken under the Ordinance so repealed shall be deemed to have
been done or taken under the corresponding provisions of this Act.