Ghanshyam Dass Vaswani vs Union Of India & Anr.
2010 Latest Caselaw 947 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI


                          W.P. (C) 669 of 1997

                                     Reserved on: January 25, 2010
                                     Decision on: February 18, 2010



        GHANSHYAM DASS VASWANI           ...... PETITIONER
                   Through: Mr. Riaz Mohammed, Advocate


                          versus


        UNION OF INDIA AND ANR               ..... Respondents
                      Through: Mr. Ravinder Aggarwal, Advocate

        CORAM: JUSTICE S. MURALIDHAR


        1. Whether reporters of local paper may be allowed
           to see the judgment?                                        No

        2. To be referred to the report or not?                        Yes

        3. Whether the judgment should be referred in the digest? Yes


                            JUDGMENT

1. This writ petition filed on 13th February 1997 seeks quashing of an

order dated 25th July 1995 passed by the Competent Authority under

Section 7 (1) of the Smugglers and Foreign Exchange Manipulators

(Forfeiture of Property) Act 1986 („SAFEMA‟) whereby the

properties of the Petitioner, i.e. share in investment and business

assets of Vasco Enterprise, 7 Jain Market, Kashmere Gate, Delhi and

a loan of Rs.30,000/- to Smt. Godawari Devi together with up-to-date

interest thereon and any other accretion thereon, were forfeited. The

Petitioner also challenges an order dated 6th November 1996 passed

by the Appellate Authority dismissing the appeal filed by the

Petitioner under Section 12 SAFEMA against the order of the

Competent Authority.

2. The Petitioner is the elder brother of Mr. Govind Vaswani who was

detained twice by orders dated 31st July 1975 and 24th June 1980

passed by the Administrator of Delhi under Section 3 (1) of the

Conservation of Foreign Exchange & Prevention of Smuggling

Activities Act, 1974 („COFEPOSA‟). The first order of detention

dated 31st July 1975 was quashed by this Court by an order dated 24th

May 1993 in Writ Petition (Criminal) No. 835 of 1978. That order, a

copy of which has been enclosed with the writ petition, notes that Mr.

Govind Vaswani continued to be in detention till 21st March 1977 and

was released immediately on the lifting of the Emergency by the

Government of India. After Mr. Govind Vaswani was released he was

served a notice under Section 6 of the SAFEMA. He then filed the

aforementioned writ petition challenging his detention order. The

Division Bench of this Court quashed the detention order on the

ground the representation of the Petitioner‟s father was not disposed

of by the President of India to whom it was addressed. Instead it was

disposed of by the Lt.Governor of Delhi. Consequently this Court

also quashed the notices dated 13th December 1977 and 28th March

1978 respectively issued to Mr. Govind Vaswani under Sections 6 and

7 SAFEMA. The above order dated 24th May 1993 of the Division

Bench of this Court in Writ Petition (Criminal) No. 835 of 1978 was

not challenged and attained finality.

3. The second order of detention dated 24th June 1980 against Mr.

Govind Vaswani under Section 3 (1) COFEPOSA was quashed by the

Supreme Court by an order dated 7th October 1980.

4. The Petitioner herein filed Writ Petition (Civil) No. 1768 of 1981

challenging the constitutional validity of both SAFEMA and

COFEPOSA. The constitutional validity of SAFEMA was upheld by

the Supreme Court in Attorney General for India v. Amratlal

Prajivandas AIR 1994 SC 2179. Following the said judgment this

Court on 30th January 1995 held that the challenge by the petitioner to

the notice under Section 6 (1) of the SAFEMA did not survive. Writ

Petition (Civil) No. 1768 of 1981was accordingly dismissed.

5. After the dismissal of the aforementioned writ petition, the

Competent Authority SAFEMA took up the Petitioner‟s case for

hearing and passed the impugned order dated 25 th July 1995. On

behalf of the Petitioner Mr. Ghanshyam Vaswani [who was the

affected person („AP‟)], it was urged that with the quashing of the

orders passed under SAFEMA against his brother Mr. Govind

Vaswani, the proceedings against the AP also did not survive. The

Competent Authority observed that the Petitioner had not offered any

explanation regarding the sources of his investment in the properties

under reference. As regards the quashing of the proceedings against

the petitioner‟s younger brother Mr.Govind Vaswani, the Competent

Authority referred to the observations of the Supreme Court in

Amratlal Prajivandas wherein it was held that where the detenu did

not choose to question the detention (either by himself or through his

next friend) before the Court during the period when such order of

detention was in force or was unsuccessful in his petition- then he or

his relatives and associates cannot attack or question its validity when

it is made the basis for applying SAFEMA to him or to his relatives

or associates. It was noted by the Competent Authority that the AP

neither discharged the burden under Section 8 SAFEMA to prove the

legal sources of the acquisition of his properties nor chose to appear in

person to explain the sources of the said two properties.

6. The Appellate Tribunal for Forfeited Property („Appellate

Tribunal‟), which comprised of two technical members, dismissed the

Petitioner‟s appeal on 6th November 1996. The Appellate Tribunal

also relied upon the observations made by the Supreme Court in

Amratlal Prajivandas and held that since Govind Vaswani had not

challenged the detention orders even while suffering the detention it

could not be said that the proceedings under SAFEMA did not

survive. Since the Petitioner did not give any explanation regarding

the sources of investment in the properties under reference, his

challenge to the forfeiture had to fail.

7. It is contended by the Petitioner that once the two detention orders

against Govind Vaswani under COFEPOSA were quashed by this

Court and the Supreme Court respectively, the very basis for invoking

SAFEMA against the Petitioner was non-existent. Secondly, it is

submitted that the bench of the Appellate Tribunal which heard the

Petitioner‟s appeal comprised only two technical members and

therefore lacked the requisite quorum. The Appellate Tribunal was not

complete without its Chairman in terms of Section 12 SAFEMA

notwithstanding sub-section (6A) thereof. It is further submitted that

the Appellate Tribunal was required to first determine if the

provisions of SAFEMA were at all applicable. It was not even prima

facie shown that there was any nexus between the properties

belonging to the Petitioner and his brother. The said properties were in

fact the independent properties of the Petitioner.

8. In the reply filed on behalf of the Respondents it is stated that since

the Petitioner was the brother of Mr. Govind Vaswani, he was an

affected person (A.P.) within the meaning of Section 2 (2) (o)

SAFEMA. It is submitted that the burden of proving that the

properties specified in the notice served under Section 5 were not

illegally acquired was on the AP. As the said onus was not discharged

by the Petitioner, a presumption was rightly drawn against the

Petitioner. Consequently the Competent Authority rightly directed

forfeiture of the Petitioner‟s properties which included his share in the

investment and business assets of M/s. Vasoo Enterprises as well as a

loan of Rs.30,000/- given by the Petitioner to his mother Smt.

Godavari Devi with up-to-date interest. It is reiterated that since

Govind Vaswani‟s detention was challenged only after he was

released, the observations made in Amratlal Prajivandass would

apply and it was not open to the Petitioner to question the validity of

the detention.

9. As regards the quorum of the Appellate Tribunal it is stated that no

objection was raised by the petitioner at the hearing before the

Appellate Tribunal. It is submitted that under Section 14 SAFEMA

the order of the Appellate Tribunal is final and is not appealable.

Section 14 which states that no order passed or declaration made

under the said Act shall be appealable or subject to the jurisdiction in

the civil court. It is stated that the then Chairman had by an order

dated 26th April 1996 constituted a Bench of two technical members

to discharge the powers and functions of the Appellate Tribunal from

2nd May 1996 till the new Chairman took over. Therefore, the

Appellate Tribunal which heard the Petitioner‟s appeal was properly

constituted.

10. The submissions of Mr. Riaz Mohammed, learned counsel for the

Petitioner and Mr. Ravinder Aggarwal, learned counsel for the

Respondents have been considered.

11. Learned counsel for the parties have reiterated their submissions

noted hereinbefore. With the Respondents having satisfactorily

explained the constitution of the Bench of the Appellate Tribunal by

the Chairman under Section 12 (6A) SAFEMA, the only question that

arises for consideration is whether the impugned order of the

Competent Authority is valid in law.

12. The entire argument of the learned counsel for the Respondents

turns on the observations of the Supreme Court in Amratlal

Prajivandass. The said observations para 55 (3)(b) (AIR p.2210) read

as under:

"An order of detention to which Section 12-A is applicable as well as an order of detention to which Section 12-A was not applicable can serve as the foundation, as the basis, for applying SAFEMA to such detenus and to his relatives and associates provided such order of detention does not attract any of the sub-clauses in the proviso to Section 2 (2) (b). If such detenu did not choose to question the said detention (either by himself or through his next friend) before the court during the period when such order of detention was in force or is unsuccessful in his attack thereon - he, or his relatives and associates cannot attack or question its validity when it is made the basis for applying SAFEMA to him or to his relatives or associates."

13. A careful reading of the above paragraph would show that the

Supreme Court had clarified that it is the order of the detention of the

detenue under COFEPOSA which forms the basis of the proceedings

against the relatives of detenu under SAFEMA. The Supreme Court

has nevertheless added that SAFEMA would apply "provided such

order of detention does not attract any of the sub-clauses in the

proviso to Section 2 (2) (b) of SAFEMA." In other words the

Supreme Court has emphasized that SAFEMA would not be attracted

in the event the detention order was set aside by a court of competent

jurisdiction. This is clear from clause (iv) to the Section 2 (2) (b).

14. The Supreme Court in Amratlal Prajivandass then explained that

if the detenu did not choose the question of detention order before the

Court during the period when such order of detention was in force

then he or his relatives or associates could not later assail its validity

when it was made the basis for applying SAFEMA to him or his

relatives or associates.

15. What the above passage purports to do so is to prevent the relative

of a detenu challenging the order of detention of detenu, which has

remained unchallenged at a time when it is made the basis for

applying SAFEMA to such relative. In the instant case it can be

argued that the Petitioner cannot challenge the validity of the

detention of Mr. Govind Vaswani. However since Govind Vaswani

has already successfully challenged his detention (and that order has

become final) there is no need for the Petitioner, who was never

detained, to challenge such detention. Even by the time the

proceedings against the Petitioner revived i.e. by the decision dated

30th January 1995, his brother‟s detention already stood quashed by

the High Court by its decision dated 24th May 1993.

16. Had the Respondents, after the judgment dated 12th May 1994 in

Amratlal Prajivandass, sought a review of the order dated 24th May

1993 of the High Court in Govind Vaswani's case on the ground that

he did not challenge his detention during the period it continued, and

the said judgment of the High Court had been recalled on that basis,

then it can possibly be argued that the proceedings under SAFEMA

against the Petitioner can continue since in that event even the

proceedings against Mr. Govind Vaswani under SAFEMA would

have continued. However, the position here is different. The

Respondents have not challenged the orders of the High Court and the

Supreme Court quashing Mr. Govind Vaswani‟s detention under

COFEPOSA and consequently, the orders under SAFEMA.

17. The resultant position is that there is no order of detention vis-à-

vis the petitioner‟s brother under the COFEPOSA. It therefore cannot

form the basis for applying SAFEMA to him. This Court cannot be

asked to turn blind eye to the order dated 24th May 1993 passed by the

Division Bench of this Court as well as the order dated 7th October

1980 passed by the Supreme Court which quashed Mr. Govind

Vaswani‟s detention orders. The Division Bench of this Court had by

the said order dated 24th May 1993 also quashed the order against Mr.

Govind Vaswani passed under SAFEMA. In the circumstances there

exists no legal basis for continuation of the proceedings under

SAFEMA against the Petitioner.

18. For the aforementioned reasons, the impugned order dated 25th

July 1995 of the Competent Authority and the order dated 6th

November 1996 of the Appellate Tribunal are hereby set aside.

19. The writ petition is accordingly allowed with the above directions

with no order as to costs.

S. MURALIDHAR, J FEBRUARY 18, 2010 rk