Sh. Gulshan Ahuja And Ors., Smt. ... vs Union Of India (Uoi) And Ors.
2004 Latest Caselaw 1468 Del

JUDGMENT

Sanjay Kishan Kaul, J.

1.The action taken by the competent authority under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (hereinafter referred to as SAFEMA) against the properties held by or on behalf of Hari Kishan Sarin has given rise to the present proceedings. The petitioners are impugning the decision of both the competent authority and the appellate authority forfeiting the property in question.

2. SAFEMA was enacted to provide for forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators, whether such property is held in their own name or in the name of their relatives, associates and confidants. Section 2(1) makes provisions of the Act applicable to persons specified in sub-section (2). Sub-section (2) defines ''every person'' and clause (b) stipulates that the same includes a 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 (hereinafter referred to as 'the COFEPOSA Act'). Clauses (c), (d) and (e) of sub-section (2) of Section 2 provide that the person referred to in sub-section (1) includes a relative of su h a person, associate of such a person and any holder of any property which was at any time previously held by such a person.

3. In terms of explanation 2 to the said Section, ''relative'' includes any lineal ascendant or descendant of the person which would thus include the mother of such a person.

4. Section 4 provides that it would not be lawful for any person to whom the Act applies to hold any illegally acquired property after the commencement of the Act whether such property is held by himself or through any person on his behalf and such proper ty is liable to be forfeited to the Central Government in accordance with the provisions of the Act. Section 5 provides for the appointment of the competent authority.

5. A notice is required to be issued under Section 6 where the competent authority has reason to believe that any of such properties is illegally acquired property and Section 7 provides for the forfeiture of the property. Section 8 stipulates that the b urden of proving that any property specified in the notice served under Section 6 is not illegally acquired property, would be on the person affected. The said Sections are as under:

6. Notice of forfeiture -- (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, any other informati on or material available to it as a result of action taken under section 18 or otherwise, the competent authority has reason to behlieve (the reasons for such belief to be recorded in writing) that all or any of such properties are illegally acquired pro erties, 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 incom , 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 de lared to be illegally acquired properties and forfeited to the Central Government under this Act.

(2) Whereas 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.

7. Forfeiture of property in certain cases - (1) The competent authority may, after considering the explanation, if any to the show cause otice 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 ille ally 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 authorit y 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 Govern ment 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 regist er the Central Government as the transferee of such shares.

8. Burden of proof - 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.''

6. In terms of Section 11 where the notice is issued under Section 6 in respect of any property and the property is transferred by any mode whatsoever, the transfer is to be ignored for purposes of proceedings under SAFEMA if such property is subsequently forfeited to the Central Government under Section 7. The said Section is as under:

''11. Certain transfers to be null and void - 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.''

7. Section 12 provides for the constitution of an Appellate Tribunal to hear the appeal against the order of the competent authority.

8. The property in question is House No. 3378-B, Christian Colony, Karol Bagh, New Delhi. The property was in two parts - Part A and Part B. Part A was acquired by late Shri H.K. Sarin and Part B by his mother Smt. Suhagwanti. The acquisition took plac e in November, 1957. The property was an evacuee property. Part A was acquired for a consideration of Rs.9223/- and Part B for Rs.9820/-. The break-up of the payment of Rs.9223/- was Rs.1844.60 in cash and the balance Rs.7378.40 adjustment against a c mpensation claim awarded under the Displaced Persons (Compensation and Rehabilitation) Act, 1954 and the break-up of Part B of Rs.9820/- was Rs.1965.80 in cash and Rs.7863.20 by adjustment of claim. Interestingly, this claim was not of Mr. Sarin or Smt. Suhagwanti but of one Shri Chaman Lal in both the cases.

9. It cannot be lost sight of that in those times such claims used to be purchased for consideration at discounted values because the persons to whom such claim was awarded, required the money urgently. Shri Chaman Lal is not known as any relative of Shr i Sarin or his mother and thus the claim would have been purchased for consideration. The net effect is that practically the full amount for both the properties was paid for in cash or through the claim purchased in cash.

10. The conveyance deed was, however, not executed in favor of Shri H.K. Sarin but was executed in favor of Smt. Suhagwanti on 15.2.1960 by the President of India. Smt. Suhagwanti passed away on 9.2.1971 but the property was not transferred in the name of any of the legal heirs.

11. An order of detention was passed under Section 3 of the COFEPOSA against Shri H.K. Sarin on 12.7.1975. Shri H.K. Sarin was suspected to be an associate of a foreign diplomat who was detected smuggling bangles studded with valuable stones for a value of about Rs.12 lakhs in Brusselles. A notice under Section 6(i) of the SAFEMA was issued on 29.4.1980 inter alia in respect of the total property in question. This property was thus alleged to have been illegally acquired by Mr. Sarin in his own name a d in the name of his mother. The proceedings thereafter apparently took a long period of time and were concluded only in the year 1998 when the competent authority passed the order under Section 7 of SAFEMA. In the meantime, interests were created in f vour of third parties and it is the petitioners who claim now to be owners of the property who have filed these writ petitions.

12. Writ Petition 5577/1999 was filed by the purchasers of the property from late Shri H.K. Sarin while Writ Petition 1274/2000 and 1606/2000 were filed by purchasers of property which was originally Part B and which was owned by Smt. Suhagwanti.

13. In so far as the portion A is concerned which was owned by Shri H.K. Sarin, the conveyance deed was executed in favor of Shri Shri H.K. Sarin only on 3.1.1996 and was duly registered with the Sub Registrar, New Delhi on 13.2.1996. The title thus cam e to be perfected much after a notice was issued under Section 6 of SAFEMA. The petitioners purchased the said property through three separate Regd. sale deeds of one/third share each. The three sale deeds were executed on 9.3.1998 which was duly regis ered with the Sub Registrar on the same day. The three sale deeds referred to the title of Shri H.K. Sarin having been derived in pursuance to the conveyance deed dated 3.1.1996 executed by the Land and Building Department on behalf of the President o India.

14. In so far as the portion B is concerned, the property was never mutated initially after the demise of Smt. Suhagwanti on 9.2.1971. The proceedings before the authority show that Shri H.K. Sarin claimed right to the property in pursuance to a will an d also stated that he was in possession of the property. Smt. Suhagwanti was actually survived by four sons and two daughters including Shri H.K. Sarin. The property was transferred only in the year 1996 in favor of Shri S.K. Sarin. This is stated t have been done on the basis of affidavits by the other legal heirs relinquishing their rights in the property. The affidavits were executed by the two daughters on 1.2.1977, the one son Shri B.K. Sarin on 9.7.1977, the other son Shri A.K. Sarin on 8.12 1995 and Shri H.K. Sarin also on 8.12.1995. The practice in relation to such property is stated to be that not only a mere mutation letter is issued but conveyance deed is executed. This conveyance deed was executed on 2.4.1996 in favor of Shri S.K. S rin by the Land and Building Department on behalf of President of India.

15. Shri S.K. Sarin passed away on 19.2.1998 where after his wife Smt. Rama Sarin became the owner. Smt. Rama Sarin executed three sale deeds in favor of the two petitioners in Civil Writ 1274/2000 and the sole petitioner in Civil Writ 1606/2000 on 16.3. 1998. The three sale deeds show the title of Shri S.K. Sarin having been derived from the conveyance deed dated 2.4.1996 registered on 26.7.1996 and the relinquishment deed executed in favor of Mrs. Ram Sarin by the other legal heirs duly registered on 5.3.1998.

16. The competent authority and the appellate tribunal found that there was no explanation for the source of funds by which the property had been acquired either by Shri H.K. Sarin or the mother and that in view of the replies filed by Shri H.K. Sarin in 1981 it was apparent that he was in possession of the whole property. In so far as the petitioners are concerned, the claim was rejected on the basis that they had acquired the property after the issuance of show cause notice under Section 6 and since n 1998, the order was passed under Section 7 of SAFEMA forfeiting the property, all transfers made in the meantime would be null and void in view of the provisions of Section 11 of SAFEMA. The appellate tribunal was also of the view that the petitioners ought to have made enquiries from the Registry and issued notices in newspapers before purchasing the property. In any case, even if the purchaser was taken for a ride, the Tribunal was not in a position to remedy the cases of fraudulent transfer.

17. Learned counsel for the petitioners in Civil Writ 5577/1999 sought to contend that there was no connectivity between the acquisition of the property and the smuggling activity of Shri H.K. Sarin since there was a long gap between the time period when the property was acquired and the proceedings initiated against Shri H.K. Sarin under COFEPOSA. The property was acquired in 1957 and the order of detention under Section 3 of the COFEPOSA was passed against Shri H.K. Sarin on 12.7.1975. Learned counse further contended that the petitioner was a bona fide purchaser who had no reason to doubt any defect in the title, more so when the government itself had perfected the title of Shri H.K. Sarin by execution of the conveyance deed in 1996. The delay in assing of the order between 1980 and 1998 is also stated to be a fact why the order of forfeiture should not be sustained. In the end, learned counsel submitted that there should be some methodology by which a purchaser can know whether there are any pr ceedings pending for attachment of such a property and intimation ought to have been sent to the Registry. Learned counsel for the respondent has clarified that there is no such practice prevalent though direction may be issued for the same for future.

18. In so far as the petitioners in the other two petitions are concerned, apart from pleading that notice for reason to believe gave no indication as to how the property of late Smt. Suhagwanti was in fact acquired from the funds of Shri H.K. Sarin, it i s contended that no notice was issued to even the legal heirs of late Smt. Suhagwanti being the other sons and daughters and only Shri H.K. Sarin was issued the notice under Section 6 of SAFEMA.

19. Learned counsel for the petitioners relied upon the Constitution Bench judgment of the Supreme Court in Attorney General for India v. Amratlal Prajivandas and Ors., . The Constitution Bench upheld the provisions of the COFEPOSA and SAFEMA but while doing so, made the following observations in para 43:

''43. ...In this view of the matter, there is no basis for the apprehension that the independently acquired properties of such relatives and associates will also be forfeited even if they are in no way connected with the convict/ detenu. So far as the ho lders (not being relatives and associates) mentioned in Section 2(2)(e) are concerned, they are dealt with on a separate footing. If such person proves that he is a transferee in good faith for consideration, his property - even though purchased from a onvict/ detenu - is not liable to be forfeited. It is equally necessary to reiterate that the burden of establishing that the properties mentioned in the show cause notice issued under Section 6, and which are held on that date by a relative or an asso iate of the convict/detenu are not the illegally acquired properties of the convict/detenu, lies upon such relative/ associate. He must establish that the said property has not been acquired with the monies or assets provided by the detenu/convict or th t they in fact did not or do not belong to such detenu/convict. We do not think that the Parliament ever intended to say that the properties of all the relatives and associates may be illegally acquired, will be forfeited just because they happen to be he relatives or associates of the convict/detenu. There ought to be the connecting link between those properties and the convict/detenu, the burden of disproving which, as mentioned above, is upon the relative/ associate. In this view of the matter, th apprehension and contention of the petitioners in this behalf must be held to be based upon a mistaken premise. The bringing in of the relatives and associates or of the persons mentioned in clause (e) of Section 2(2) is thus neither discriminatory nor competent apart from the protection of Article 31-B.''

20.The aforesaid passage was relied upon to contend that in so far as the property of Smt. Suhagwanti was concerned, there was nothing in the notice under Section 6 of SAFEMA which gave reasons to believe that this property was the property of Shri H.K. Sarin. The common submission was that the petitioners are the bona fide purchasers.

21. Learned counsel for the petitioners also referred to the judgment of the Division Bench judgment of this court in Shanti Devi v. Union of India and Ors., to contend that the burden of proof under Section 8 of SAFEMA would not be appli cable or attracted unless some link or nexus between the property held by the relative and the illegal activity of the convict/detenu is shown to exist. To the same effect is another Division Bench judgment of this court in Baij Nath Agarwalla v. Union of India and Ors., 2002 (3) JCC 1782.

22. Learned counsel for the petitioners referred to the judgment of the learned Single Judge of this court in Kamla Bai v. Union of India and Ors., which held that the notice required to be issued under Section 6(2) of SAFEMA to the relat ives of the detenu cannot be given a go-bye and the opportunity of being heard cannot be whittled away.

23. On the issue of delay in passing the order, learned counsel for the petitioner referred to the Constitution Bench judgment of the Supreme Court in The Moon Mills Ltd. v. M.R. Meher, President, Industrial Court, Bombay and Ors., AIR 1967 SC 1450 where th e provisions of the Bombay Industrial Relations Act were considered. On the issue of delay and laches, the observations of Sir Barnes Peacock in Lindsay Petroleum Co. v Prosper Armstrong Hurd, Abram Farewell, and John Kemp, (1874) 5 PC 221 at p.239, wer cited with approval which are as under: ''Now the doctrine of laches in Courts of Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these Case s, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that de ence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justi e or injustice in taking the one course or the other, so far as relates to the remedy.''

24. Learned counsel also referred to the judgment of the Appellate Tribunal in Smt. Hamida Beevi v Competent Authority, (1995) 214 ITR (AT) to contend that where no nexus was found between the husband's illegal activities or unlawful income and the acquis ition of the said property, the remoteness of time period of almost 20 years from the acquisition of the property and the husband being apprehended was held as a justification for not forfeiting the property.

25. On the issue of delay in passing the order, a reference was made to the judgment of V.I. Abdul Majeed v. Competent Authority, (1995) 214 ITR 101 (AT) to contend that the appellate authority has been accepting the principle of long delay being a reason to quash the proceedings for forfeiture. In the said case, the proceedings remained pending for 12 years.

26.Learned counsel for the respondent, however, referred to the judgment of the Supreme Court in Aamenabai Tayebaly and Ors. v. Competent Authority under SAFEMA and Ors., where the effect of Section 11 of SAFEMA was considered. The two term inal dates were stated to be the date of the notice under Section 6 or 10 of SAFEMA and the order passed under Section 7 of SAFEMA between which any transfer would invite the provisions of Sections 11 of SAFEMA. It was held that such transfer would been ll and void.

27. Learned counsel for the respondent also submitted that the judgment in Attorney General for India case (supra) was interpreted by a Bench of the Supreme Court in Kesar Devi v. Union of India and Ors., . It was held that the notice under Section 6 of SAFEMA need no show any link or nexus between the illegally acquired property of the detenu and the property sought to be forfeited for passing of the order of forfeiture under Section 7 and the only requirement is for the competent authori y to have reason to believe and the same being recorded in writing to the effect that the property was illegally acquired. The burden would be on the person to whom the notice was issued to prove that the property was not illegally acquired. It is furt er held that the competent authority has to show the link or nexus to substantiate the plea that the property was illegally acquired only if the person holding the property is remote but not when the relationship is close and direct such as with the spou e, child or parent. The following observations may be referred to:

10. ''...The language of the section does not show that there is any requirement of mentioning any link or nexus between the convict or detenu and the property ostensibly standing in the name of the person to whom the notice has been issued. Section 8 of the Act which deals with the burden of proof is very important. It lays down that in any proceedings under the Act, the burden of proving that any property specified in the notice served under Section 6 is not illegally acquired property, shall be on t e person affected. The combined effect of Section 6(1) and Section 8 is that the competent authority should have reason to believe (which reasons have to be recorded in writing) that properties ostensibly standing in the name of a person to whom the Act applies are illegally acquired properties, he can issue a notice to such a person. Thereafter, the burden of proving that such property is not illegally acquired property will be upon the person to whom notice has been issued. The statutory provisions o not show that the competent authority, in addition to recording reasons for his belief, has to further mention any nexus or link between the convict or detenu (as described in sub-section (2) of Section2) and the property which is sought to be forfeit d in the sense that money or consideration for the same was provided by such convict or detenu. If a further requirement regarding establishing any link or nexus is imposed upon the competent authority, the provisions of Section 8 regarding burden of pr of become otiose and the very purpose of enacting such a section would be defeated.

11.The requirement of establishing a ''link or nexus'' between the illegally acquired money of the convict or detenu as described in sub-section (2) of Section 2 of the Act and the properties sought to be forfeited is sought to be derived from certain obse rvations made by this Court in Attorney General for India v. Amratlal Prajivandas in para 44 of the Report. If para 44 is read as a whole, it will be clear that no such requirement of establishing any link or nexus on the part of the competent authority has been laid down therein. In the said paragraph, the Bench dealt with the contention of the counsel for the petitioners that extending the provisions of SAFEMA to the relatives, associates and other ''holders'' is again a case of overreaching or of over readth, as it may be called, a case of excessive regulation. The relevant part of para 44 (p.92 of the Report) is being reproduced below:

''The language of this section is indicative of the ambit of the Act, Clauses (c) and (d) in Section 2(2) and Explanations (2) and (3) occurring therein shall have to be construed and understood in the light of the overall scheme and purpose of the enactm ent. The idea is to forfeit the illegally acquired properties of the convict/detenu irrespective of the fact that such properties are held by or kept in the name of or screened in the name of any relative or associate as defined in the said two Explanat ons. The idea is not to forfeit the independent properties of such relatives or associates which they may have acquired illegally but only to reach the properties of the convict/detenu or properties traceable to him, wherever they are, ignoring all the t ansactions with respect to those properties. By way of illustration, take a case where a convict/detenu purchases a property in the name of his relative or associate - it does not matter whether he intends such a person to be a mere name-lender or whether he really intends that such person shall be the real owner and/or possessor thereof - or gifts away or otherwise transfers his properties in favor of any of his relatives or associates, or purports to sell them to any of his relatives or associa es - in all such cases, all the said transactions will be ignored and the properties forfeited unless the convict/detenu or his relative/associate, as the case may be, establishes that such property or properties are not 'illegally acquired properties' w thin the meaning of Section 3(c). ...It is equally necessary to reiterate that the burden of establishing that the properties mentioned in the show-cause notice issued under Section 6, and which are held on that date by a relative or an associate of the onvict/detenu, are not the illegally acquired properties of the convict/detenu, lies upon such relative/associate. He must establish that the said property has not been acquired with the monies or assets provided by the detenu/convict or that they in fa t did not or do not belong to such detenu/convict. We do not think that Parliament ever intended to say that the properties of all the relatives and associates, maybe illegally acquired, will be forfeited just because they happen to be the relatives or ssociates of the convict/detenu. There ought to be the connecting link between those properties and the convict/detenu, the burden of disproving which, as mentioned above, is upon the relative/associate.''

28. Since in the present case, the relation in question was the mother, it was submitted that all the submissions made by learned counsel for the petitioners on the issue of nexus really do not survive for consideration in view of the aforesaid observatio ns.

29. On the plea of reason to believe, learned counsel for the petitioners referred to the judgment of the Supreme Court in The Assistant Collector of Customs and Superintendent, Preventive Service Customs, Calcutta and Ors. v. Charan Das Malhotra, which dealt with the provisions in the Customs Act. It was held that the expression ''reason to believe'' and ''sufficient cause being shown'' are different and the first expression does not contemplate an enquiry and the only requirement was the sat sfaction of the concerned officer that there was reason to believe though such reason to believe should not be extraneous.

30.On the issue of the requirement to serve notice to the legal heirs under Section 6 of SAFEMA, learned counsel for the respondents submitted that Smt. Suhagwanti was the owner and there can be no dispute that normally the legal heirs would be required to be served with the notice since she had passed away prior to the issuance of the notice under Section 6 of SAFEMA. However, the legal heirs did not take any steps to bring them on record right till the time when the notice was issued in 1980. Learne counsel relied upon the Division Bench judgment of this court in Smt. Santosh Sharma v. Union of India and Ors., . The said judgment dealt with requirement for service of notice under the Land Acquisition Act, 1894 and it was held that he right to get notice could only arise if steps had been taken to get the name recorded in the revenue records.

31.In the present case, it was submitted that not only were no steps taken, Shri H.K. Sarin claimed the property to be his own on the basis of the bequeath made by a will dated 25.10.1970 of Smt. Suhagwanti though the will was not probated. The mutation was done only some time in 1996. It was thus submitted that the requirement for service of notice has to be considered in the peculiar facts of the present case.

32.The observations of the Supreme Court in State of Rajasthan and Ors.v. D.R. Laxmi and Ors., were relied upon for purposes of making the submission that even if an order or action is ultra vires the power and becomes void, it does not conf er any right and the action need not necessarily be to set at naught in all events. It was thus submitted that the so called technical flaw in not issuing a notice under Section 6 of SAFEMA cannot be a ground made available to the petitioner to quashing the impugned orders in view of the facts set out herein above.

33. Learned counsel for the respondent, however, did not dispute the fact that there was no interdict from any competent court during the period of 18 years when no order was passed under Section 7 of the Act of SAFEMA and the response has been filed by S hri H.K. Sarin as far back as 1981. This was, however, stated to be not a reason why the impugned orders should be quashed.

34. I have considered the submissions advanced by learned counsel for the parties.

35. The first issue to be considered relates to the plea of the nexus between the acquisition of the property and the proceedings initiated against Shri H.K. Sarin under COFEPOSA. There is no doubt about the proposition that the object is not that every property of the relation must be attached even if independently acquired. However, the burden is on the relative to show the source from which such property was acquired. The mere lapse of time between the date of acquisition of the property and the det ntion of Shri H.K. Sarin under COFEPOSA would not result in the proceedings being vitiated.

36. Learned counsel for the petitioners has relied upon the judgment of the Supreme Court in Attorney General for India case (supra) and judgments of the Division Bench of this court as well as the judgments of the Supreme Court in respect of certain othe r enactments to contend that the delay and laches should be fatal to such proceedings. In my considered view, this plea is not available to the petitioners in view of the judgment of the Supreme Court in Kesar Devi's case (supra). The import of the jud ment of Attorney General for India case (supra) has been explained in Kesar Devi's case (supra). The observations therein make it clear that there is no requirement of mentioning any link or nexus and if the competent authority has reason to believe, th notice can be issued. This is stated to be specially so in cases where directly a near relation like the mother is involved. Thus, the very edifice of the plea of the learned counsel for the petitioners on this aspect cannot be sustained.

37. On the factual aspect regarding the aforesaid plea, it has to be appreciated that Shri H.K. Sarin was dealing in gold and jewellery business right from the inception and even during the period of time when the property was acquired. Both the portio ns of the property acquired in the name of Shri H.K. Sarin and his mother Smt. Suhagwanti were paid for by cash or claims purchased of third parties in cash. There is no proper disclosure about the source of acquisition of the property from legally acq ired funds whether in the case of Shri H.K. Sarin or Smt. Suhagwanti.

38. There is no doubt that the provisions of SAFEMA or for that matter COFEPOSA are stringent in nature. The provisions make it clear that once a notice is issued under Section 6 of the Act, any transaction carried out thereafter would be null and void i n terms of the provisions of Section 11 of the Act if the order was passed subsequently under Section 7 of the Act forfeiting the property. This position is amply clear from the observations of the Supreme Court in Aamenabai Tayebaly and Ors case (supra) Thus, the mere fact that the petitioners have acquired the property subsequently through Regd. documents would not suffice to defeat the proceedings initiated under the provisions of SAFEMA.

39. It may, however, be noticed that there is apparently no methodology by which information is sent to the registering authority about any proceedings under Section 6 of SAFEMA and the result is that if a purchaser was to make any enquiries, he would not come to know of the pendency of any proceedings under SAFEMA or the fact that the validity of the transaction to be made by him would itself be called into question. I thus consider it appropriate to direct that at least in future the competent authori y must take due care to send intimation of any notice under Section 6 of SAFEMA to the registering authority and in case of leasehold properties to the perpetual Lessers. Needless to say if the proceedings do not culminate in an order under Section 7, o culmination of the proceedings, the intimation of dropping of the proceedings should be intimated. This would equally apply if an order was passed under Section 7 of SAFEMA.

40.In so far as the purchasers of Part B are concerned who have purchased from the mother of Shri H.K. Sarin, the additional plea raised is of the lack of notice under Section 6 of SAFEMA. The requirement under Section 6 is mandatory and this has been s o noticed by the learned Single Judge in Kamla Bai's case (supra). However, in the present case, the recorded owner Smt. Suhagwanti passed away almost nine years prior to the initiation of proceedings under SAFEMA. The name of the legal heirs were not b ought on record nor did the legal heirs take any steps. Shri H.K. Sarin took the plea that he was in occupation of the property and the property was his specially in view of a bequeath made by Smt. Suhagwanti in terms of the Will dated 25.10.1970. Ther is no doubt that the Will was not probated and the NOCs from other legal heirs were not obtained. There was, however, no reason for the competent court to doubt the plea of Shri H.K. Sarin when the other legal heirs themselves had taken no steps to ge their names recorded. In fact, it is only in 1996, 25 years after the passing away of Smt. Suhagwanti that Shri S.K. Sarin got the property mutated in his name on the basis of NOCs of other legal heirs. In view thereof, in the given facts of the case, I find no infirmity with the procedure followed by the respondents.

41.The plea of bona fide purchaser by itself would be of not much assistance to the petitioners in view of the observations of the Supreme Court in Aamenabai Tayebaly and Ors case (supra) and the reading of the provisions of Section 6, 7 and 11 of SAFEMA.

42.In the present case, however, an important aspect to be considered is the 18 years' delay in passing the order between the date of issuance of the notice under Section 6 and the passing of the order under Section 7 of SAFEMA. The Appellate Tribunal i n certain cases referred to by learned counsel for the petitioner has found such delays fatal. In my considered view, if the properties had continued to vest with the original owners, even this inordinate delay of 18 years could not have influenced the ecision to be arrived at in the matter. However, the material fact in the present case is that the properties have been purchased through Regd. documents by bona fide purchasers when the Department itself had delayed the proceedings for 18 years. This elay has occurred despite the fact that Shri H.K. Sarin had responded to the notice in 1981 and there was no interdict by any competent court in passing the order. Even if more than one property was involved, a delay of such magnitude cannot be expected

43.I am not in agreement with the findings arrived at by the Appellate Tribunal that the purchasers had to do anything more than what they had done. Any enquiry from the Registry would have served no purpose since no intimation is sent to the Registrar' s office. Thus, a bona fide purchaser was required to look into the previous title and see whether any doubts were cast on the property. There was no manner by which petitioners could have known of the notice under Section 6 of SAFEMA.

44. The most material aspect while considering the aforesaid plea is the factum of the execution of the conveyance deeds in 1996 by the President of India through the Land and Building Department in favor of Shri H.K. Sarin and Shri S.K. Sarin. The sale deeds in favor of the petitioners had been duly registered and proceeded on the premises of the title in favor of the vendors in pursuance to such conveyance deeds. If the proceedings were continuing under SAFEMA, there was no occasion for the Govern ent to have executed the conveyance deeds in favor of Shri H.K. Sarin and Shri S.K. Sarin. No doubt, this has also arisen on account of the absence of any procedure by the authorities to send intimation of such proceedings under Section 6 of SAFEMA to he perpetual Lesser.

45. If the plea of the learned counsel for the respondent was to be accepted, then all transactions after issuance of the notice under Section 6 of SAFEMA would be null and void. Learned counsel for the respondent contended that the perpetual Lesser ough t not to have executed the conveyance deed in favor of Shri H.K. Sarin and Shri S.K. Sarin. If that be, then even those transactions would be held to be null and void. The result would be that the petitioners would suffer as a consequence of the Gover ment of India having executed conveyance deeds in favor of Shri H.K. Sarin and Shri S.K. Sarin. As noticed above, these are conveyance deeds executed on behalf of the President of India by the Land and Building Department.

46. If the aforesaid plea were to be accepted, then petitioners must be compensated for the loss caused to them by the action of the Government of India and certainly this court in proceeding under Article 226 of the Constitution of India would be compete nt to do so where the consequence is writ large on its face. If the properties were to be forfeited, they would be put up for auction. The prices which the properties would fetch from the auction, would be the only adequate compensation to the petition rs who were deprived of their property in pursuance to the proceedings under the SAFEMA. The result would be that the property would be taken from one hand and the compensation given to the petitioners on the other hand. It would not amount to appropri tion to the Government of any realisations from the forfeited property. The Government cannot be given a premium for one limb of the Government not knowing what is happening in the other limb.

47. In my considered view, this aspect cannot be ignored despite the stringent provisions of SAFEMA. If the delay of 18 years is considered along with this aspect of the Government itself having executed the conveyance deed 16 years after the notice was issued under Section 6 of SAFEMA and the petitioners having purchased the property vide Regd. Deeds on the basis of such conveyance deeds, the properties which lie in the hand of the petitioners cannot be forfeited under the provisions of Section 7 of SA EMA.

48. In view of the aforesaid, a writ of mandamus is issued quashing the impugned orders of the appellate authority and the competent authority forfeiting the properties of the petitioners. The rule is made absolute leaving the parties to bear their own costs.