Delhi High Court
Govardhan Vigraham vs Union Of India on 16 December, 2020
$~27
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Judgment: 16th December, 2020
+ W.P.(CRL) 1564/2020 and CRL.M.A. 13435/2020
GOVARDHAN VIGRAHAM ..... Petitioner
Through: Mr Pranjal Kishore, Advocate.
versus
UNION OF INDIA ..... Respondent
Through: Mr Dev Prakash Bhardwaj,
CGSC for UOI.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
[Hearing held through video conferencing]
VIBHU BAKHRU, J. (ORAL)
1. The petitioner has filed the present petition impugning an order
dated 12.03.2020, passed by the Competent Authority under Section
68-U of the Narcotic Drugs and Psychotropic Substances Act, 1985
(hereinafter ‗NDPS Act') to the limited extent that it directs surrender
of possession of the property bearing no. 503, Fifth Floor, Sinchan
Building, New Link Road Extension, Veera Desai Road, Mumbai
(hereinafter ‗the said property'). In addition, the petitioner also
impugns an order dated 11.03.2020, passed by the Competent
Authority under Section 68-I(1) and (3) of the NDPS Act to the extent
that it declares the said property as forfeited to the Central
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Government. The said order is not on record, however, the same is
referred in an order dated 12.03.2020. The said orders are hereinafter
referred to as ‗the impugned orders'.
2. The petitioner claims that he is a bonafide purchaser, for
valuable and adequate consideration, of the said property and the
impugned orders are, thus, without jurisdiction. In addition, the
petitioner also challenges the impugned orders on the ground that the
same were passed without any notice to the petitioner and without
affording him any opportunity to be heard.
3. The petitioner further claims that the impugned orders have
been passed in ignorance of an order dated 17.01.1994 (Order File No.
2/CA/LKO/NDPS/93/50) passed by the Competent Authority,
Lucknow, whereby the Competent Authority had found that the
petitioner's predecessor-in-interest, one Mr. Anand Kumar Bagla, was
a bonafide purchaser of the said property. Consequently, the said
property had been excluded from the application of Chapter V-A of
the NDPS Act, which relates to forfeiture of illegally acquired
property.
Factual Background
4. The said property has been sought to be forfeited on the ground
that it was allegedly acquired from proceeds of illicit traffic in drugs
by one Sh. Virendra Kumar Rai @ Virendra Rai son of Sh. Kamata
Prasad Rai, resident of Birdopur, Varanasi. An order of detention
dated 04.12.1990, under Section 3(1) of the Prevention of Illicit
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Traffic in Narcotic Drug and Psychotropic Substances Act, 1988 was
passed against Virendra Kumar Rai (V.K Rai)
5. It is stated that the said detention order has neither been revoked
by the Advisory Board nor has been set aside by the any court of
competent jurisdiction.
6. In view of the said order, an order of forfeiture under Section
68I(1) and (3) of NDPS Act was passed on 14.01.1993 and 15.01.1993
relating to the properties of the said ‗affected person' (Virendra
Kumar Rai and his relatives/associates). The aforementioned
properties also included the said property (Flat No. 503, A Wing,
Sinchan Building, Veera Desai Road, Andheri West, Mumbai).
7. The said property was purchased by Sh. Birendra Kumar Rai,
who was the father of the accused V.K. Rai, in the year 1985. He had
purchased the said flat from Shelters Builders. The said property was
thereafter, sold to Anand Kumar Bagla in the year 1990, who
continued to own the said property till 1994. In 1994, Sh. Anand
Kumar Bagla sold the said property to M/s Spintex Industries. The
petitioner claims to have purchased the said property from M/s
Spintex Industries in 1996.
8. The Customs Department sought to take possession of the said
property and at the material time, were informed that the said property
belonged to Smt. Krishna Bagla and Sh. Anand Kumar Bagla. They
were apprised that the property was purchased by them on 22.02.1990
in good faith and for adequate consideration. It was noted that they
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had acquired the property prior to issuance of any notice to Sh V.K.
Rai under Section 68-H(1) of the NDPS Act.
9. In view of the above, the Competent Authority and
Administrator, Lucknow sought a legal opinion on the question
whether there was sufficient evidence to prove that the property in
question had been purchased prior to issuance of notice under Section
68H(1) of the NDPS Act or prior to freezing of the said property, in
good faith and for adequate consideration. Opinion was also sought
whether the said property can be excluded from the notice under
Section 68H(1) of the NDPS Act, which was issued to Sh. V.K. Rai. It
is stated that in response to the said query, the Additional Standing
Counsel of the Government of India, High Court, Lucknow Bench
forwarded his opinion by a letter dated 05.11.1993. He opined that
Smt. Krishna Devi Bagla and Anand Kumar Bagla had purchased the
said property prior to the date of the notice; the purchase was for an
adequate consideration; and the same was excluded from the notice
under the NDPS Act.
10. Following the receipt of the said opinion, the Deputy Director,
Narcotics Control Bureau, Varanasi sent a letter dated 06.01.1994
intimating that the said property had been wrongly frozen. The counter
affidavit filed on behalf of the respondents indicates that he was of the
view that the order freezing the said property had been passed
inadvertently.
11. In view of the above, the Competent Authority and
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Administrator, Lucknow issued a letter dated 17.01.1994 (F No.
2/CA/LKO/NDPS/48-52) accepting that the said property was to be
excluded from the schedule of properties of the affected person and/or
his relatives/associates.
12. In the meantime, Sh. V.K. Rai as well as Smt. Krishna Devi
Bagla and Sh. Anand Kumar Bagla filed appeals before Appellate
Tribunal for Forfeited Properties, New Delhi impugning the forfeiture
order. The appeal preferred by Sh. V.K. Rai was allowed. The order
forfeiting the said property was set aside. The case was remanded to
the Competent Authority, Lucknow for deciding it afresh by
31.07.1993 after affording the appellant (Sh. V.K. Rai) an opportunity
to be heard.
13. It appears that no fresh order was passed within the stipulated
time. In the counter affidavit filed on behalf of the respondent, it is
stated that the ‗affected persons' and Sh. Anand Kumar Bagla were
given numerous opportunities and subsequently a fresh order of
forfeiture under Section 68-I(1) and (3) of the NDPS Act was passed
on 11.03.2020 . The consequential order seeking surrender of
possession dated 12.03.2020 was also passed under Section 68-U of
the NDPS Act. These orders are impugned in this petition.
14. Concededly, the said impugned orders were passed ex parte
insofar as the said property is concerned.
15. Mr Bhardwaj, learned counsel appearing for the respondent
submitted that it is apparent that there was a mistake and therefore, the
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matter should be remanded to the Competent Authority for deciding
afresh. He submitted that quashing the impugned order - which also
include other properties - would not be apposite merely because the
Competent Authority had erroneously included the said property in the
schedule of affected properties of the affected persons.
Reasons and Conclusions
16. There is no dispute that the petitioner is a bonafide purchaser
and had purchased the said property for a valuable consideration. It is
also averred in the present petition, which is not traversed by the
respondent, that the petitioner had availed of a loan from HDFC for
purchasing the said property and a No Objection Certificate stating
that the said property was not subject to any encumbrance or liability
had been issued by Sinchan Cooperative Housing Society for the
purpose of availing the said loan.
17. The petitioner has been holding the said property since 1996
and it is not disputed that no notice of any proceedings in respect of
the said property had been issued to the petitioner.
18. It is apparent from the above that there is no real controversy in
respect of the essential facts that are necessary to address the
challenge to the impugned orders. Admittedly, the said property had
been purchased by Sh. Anand Kumar Bagla prior to issuance of notice
under Section 68-H(1) of the NDPS Act. After securing a legal
opinion, the Director, NCB had, by a letter dated 06.01.1994, duly
informed that the said property had been incorrectly frozen and that
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the order had been passed inadvertently. The Competent Authority had
also accepted that the said property had been transferred to Smt.
Krishna Devi Bagla and Sh. Anand Kumar Bagla in good faith and
prior to passing the freezing orders under the NDPS Act. A letter to
the aforesaid fact was issued on 17.01.1994 for accepting that the said
property mentioned at Serial No.(XIII) of the schedule of properties,
be excluded from the proceedings. In the meanwhile, the appeal
preferred against the forfeiture order was also allowed and the
forfeiture order had been set aside.
19. In the given circumstances, the Competent Authority was
required to consider the same before passing any fresh order of
forfeiture. Although the said order of forfeiture was required to be
passed by 31.07.1993, the impugned orders were passed almost
twenty-seven years thereafter and that too without considering that it
had been duly accepted by the Competent Authority that the said
property is to excluded from the proceedings.
20. The counter affidavit filed on behalf of the respondent indicates
that although the exclusion of the said property from the schedule of
properties to be forfeited had been accepted, a formal order had not
been passed. However, there is no dispute whatsoever that the said
property was not liable for forfeiture.
21. Mr. Kishore, the learned counsel appearing for the petitioner
had referred to sub Section (1) of Section 68A and Clause (f) of Sub
Section (2) of Section 68A of the NDPS Act and had submitted that by
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virtue of the petitioner acquiring the property in good faith and for
adequate consideration, he could not be considered as a person as
referred to in Sub Section (1) of Section 68A of the NDPS Act and
therefore, the provisions of Chapter V-A of the NDPS Act were
wholly inapplicable to the petitioner. Section 68A(1) and Section
68A(2) (f) of the NDPS Act are set out below:-
―68A. Application.--(1) The provisions of this Chapter
shall apply only to the persons specified in sub-section
(2).
(2) The persons referred to in sub-section (1) are the
following, namely:
* * * *
(f) 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) or clause (c) [or clause (cc)]; 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.‖
22. In view of the above, the order passed by the Competent
Authority under Section 68I of the NDPS Act to the extent that it
forfeits the said property under Section 68-I of the NDPS Act, is
without jurisdiction.
23. Mr. Kishore had also contended that an appeal under Section
68-O of the NDPS Act would not be available to the petitioner since
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the petitioner was not a person to whom the provisions of Chapter V-
A of the NDPS Act are applicable.
24. The said contention is, plainly, unmerited. A plain reading of
the opening sentence of Section 68-O of the NDPS Act clearly
indicates that any person aggrieved by an order of Competent
Authority, inter alia, passed under Section 68-I can file an appeal.
However, considering that there is no controversy as to the essential
facts and it is conceded that it was accepted that the said property was
liable to be excluded from the schedule of the properties of the
affected person/his relatives or associates, this Court does not consider
it apposite to relegate the petitioner to exhausting his statutory
remedy. More so as the order passed by the Competent Authority to
the extent that it seeks to forfeit the said property and requires its
surrender, is without jurisdiction.
25. In view of the above, the impugned orders to the extent that the
purport to declare the said property as forfeited to the Central
Government and demands it's surrender, are set aside
26. The petition is allowed in the aforesaid terms. The pending
application is also disposed of.
VIBHU BAKHRU, J
DECEMBER 16, 2020
RK
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