Criminal Writ Petition No.881 of 2000

30th September, 2008

Petitioner Counsel: Mr. NITEEN PRADHAN , Ms. S. D. KHOT
Respondent Counsel: Mr. J. E. SATPUTE,Mr. D. S. MHAISPURKAR

Cases Cited:
Aslam Mohamed Merchant Vs. Competent Authority, 2008 ALL MR (Cri) 2306 (S.C.)=2008(5) AIR Bom. R 306 [Para 29]
Attorney General of India Vs. Amrutlal Prajivandas, AIR 1994 SC 2179 [Para 30]

JUDGMENT

A. A. KUMBHAKONI, J.:- The petitioner is a lady who, at the time of filing of this writ petition in the year 2000, was 35 years old. The petitioner married one Nitin Khimji Bhanushali (hereinafter referred to as "the husband of the petitioner" for the sake of brevity) in the year 1981 and three children are born out of this wedlock.

2. The present petition pertains to following immovable properties viz. :-

I. Flat No.801, Building No.6, J.K. Wing, Neelam Co-op. Housing Society, Gavanpada in the name of Mrs. Neeta Nitin Bhanusali, admeasuring 1685 sq. ft. In area;

II. Flat No.703, 'A' Wing, Bldg. No.3, Neelam CHS Gavanpada, Mulund (E), Mumbai admeasuring 888.79 sq. ft. In the name of Neeta N. Bhanushali;

III. Flat No.601, Bldg No.8, 'D' Wing, Neelam Nagar Co-op. Society, Gavanpada, Mulund (E), Mumbai admeasuring 550 sq.ft. In the possession of Smt. Neeta N. Bhanusali;

IV. Shop No.7, known as Pooja Dairy in Bldg. No.7, Neelam Nagar, Gavanpada, admeasuring about 400 sq. ft. In the name of Neeta N. Bhanusali;

V. Shop No.2, known as Shivanand Dairy in Shrinivas Bldg; M. G. Road, Ghatkopar (E), admeasuring about 400 sq. ft..

These three residential flats and two shops are hereinafter referred to as "the properties in issue" for the sake of brevity. Even according to the Respondents in terms of the relevant documents of title/tenancy the Petitioner is the owner/holder of the properties in issue.

3. The present petition arises out of an action taken by the respondents for forfeiture of the properties in issue u/s.68-I of the Narcotic Drugs and Psychotropic Substances Act, 1985 (hereinafter referred to as "the said Act" for the sake of brevity). An appeal filed by the petitioner ultimately before the Appellate Tribunal for Forfeited Properties (hereinafter referred to as "the said Tribunal" for the sake of brevity) challenging the impugned action of forfeiture came to be dismissed on 1st March, 2000 and thereby the order of the Competent Authority issued for confiscation of the properties in issue has been confirmed. Hence, this petition.

4. The relevant chronology of dates for better understanding of the matter is set out hereunder :-

11.1.1994 : On receipt of secret information a trap was arranged and one Dr. Imtiyaz and his associates were arrested at a place which was used as a Laboratory for manufacturing of Heroin.

During the course of interrogation, Dr. Imtiyaz disclosed that the husband of the Petitioner was his partner in the business of exporting Mandrex Tablets to South Africa;

13.1.1994 : At the instance of Dr. Imtiyaz, 482 kgs. Of Mandrex Tablets were seized;

19.3.1994 : The husband of the Petitioner was arrested. During the course of interrogation the husband of the Petitioner disclosed that one Ram Singh from Ahmedabad had supplied 'Methaqualone' to him and that he was working for Iqbal Mirchi, the main dealer in Narcotic Drugs, who was also a member of international gang. The husband of the petitioner further disclosed that Iqbal Mirchi is based in foreign countries and conducts the business through his counter parts in South Africa and in other countries;

2.9.1994 : A detention order issued by the detaining authority of the Government of Maharashtra against aforesaid Mr. Iqbal Mohamed Memon @ Iqbal Mirchi vide order No.SLP.3.(A)/TND/0194/60 under the provisions of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1985 (PITNDPS Act). The said order of detention has remained unexecuted as the person against whom it is issued viz. Iqbal Mirchi, is absconding;

28.1.1997 : The husband of the petitioner escaped from custody;

5.2.1997 : The statement of petitioner came to be recorded by the Police wherein she is alleged to have stated that her husband had acquired certain properties in her name from the income earned by him in the illegal business of Narcotic Drugs undertaken by him in association with Iqbal Mirchi;

26.2.1997 : An order came to be issued by the Inspector of Police, Narcotic Cell, CID, Mumbai under sections 68-E and 68-F(1) of the said Act. By this order the properties in issue were frozen as on 26th February, 1997;

21.3.1997 : The Deputy Commissioner of Police, Narcotic Cell, CID, Mumbai sought for confirmation of the aforesaid action of freezing of the properties in issue from the Competent Authority under the said Act;

20.3.1997 : The Competent Authority under the said Act not only confirmed the order of freezing the properties in issue in exercise of its power u/s.68-F(2) of the said Act but also by the same document issued a show cause notice u/s.68-H of the said Act calling upon the said Iqbal Mirchi and the husband of the petitioner as to why the properties in issue which were subject matter of the freezing order dated 26th February, 1997 should not be held as illegally acquired properties and consequently be forfeited to the Central Government as provided by Section 68-I of the said Act.

11.12.1997 : This High Court disposed off Criminal Writ Petition No.909 of 1997 filed by the petitioner challenging the freezing order dated 26th February, 1997 and confirmed the order dated 29th March, 1997 by directing the petitioner to appear before the said Tribunal;

12.2.1998 : The Tribunal dismissed the appeal of the petitioner and directed her to co-operate with the competent authority in the case involving the issue of forfeiture;

16.11.1998 : Another Writ Petition No.479 of 1998 filed by the petitioner for the same matter was dismissed as untenable.

14.10.1999 : The Competent Authority u/s.68-D of the said Act declared the properties in issue to be illegally acquired properties and ordered the same to be forfeited to the Central Government u/s.68-I of the said Act;

---------- The husband of the petitioner filed FPA No.ND11/Bom/99 with the said Tribunal impugning the aforesaid order passed by the Competent Authority dated 14th October, 1999 u/s.68-I of the said Act;

---------- The petitioner filed FPA No.ND12/Bom/99 with the said Tribunal impugning the aforesaid order passed by the Competent Authority dated 14th October, 1999 u/s.68-I of the said Act;

1.3.2000 : The said Tribunal dismissed both the appeals and thereby confirmed the order of the Competent Authority forfeiting the properties in issue;

5. The aforesaid incident of 11th January, 1994 resulted into registration of an offence under C.R. No.7 of 1994. Though the offence was registered under one Crime Register, being C.R. No.7 of 1994, it gave rise to three separate cases being tried by a Court under the said Act. These cases were as under :

Special Case No.	Name of parties against whom filed
72 of 1994	Husband of petitioner (accused no.7)
121 of 1994	Husband of petitioner and five others
150 of 1994	Husband of petitioner and Iqbal Mirchi

Though the husband of the petitioner was accused no.7 in the aforesaid Case No.72 of 1994, his case was separated and was separately thereafter numbered, as aforesaid being Special Case No.150 of 1994, as at the time of the trial of the Case No.72 of 1994 the husband of the petitioner was not traceable.

The evidence in Case No.72 of 1994 was recorded and the accused therein were acquitted. It appears that thereafter the husband of the petitioner was arrested and hence the aforesaid Special case no.150 of 1994 also started. Thereafter, by consent of the Advocate of the husband of the petitioner, the evidence in that case was considered as evidence in the aforesaid Special Case No.150 of 1994. In addition thereto some evidence was recorded separately in Special Case No.150 of 1994 and it appears that the husband of the petitioner was convicted. However, ultimately, in Criminal Appeal No.284 of 2000, this Court by its judgment and order dated 13th August 2004 was pleased to set aside the conviction of the husband of petitioner, by allowing his appeal. The husband of the petitioner was acquitted of all the charges and was ordered to be set at liberty forthwith, if not required in any other case.

6. We have given the aforesaid chronology as also the subsequent developments of acquittal of the husband of the petitioner from offence registered against him in C.R. No.7 of 1994 principally because it is this C.R. which is used as the sole bridge for connecting the husband of the petitioner with Iqbal Mirchi and the Respondents are using this bridge to reach the Petitioner for as the basis of the impugned action taken in respect of the properties in issue.

7. The relevant portion of the very first order freezing the property in issue dated 26th February, 1997 reads thus :

"... ... WHEREAS Mr.Iqbal Mohamed Memon @ Iqbal Mirchi is an accused in Narcotics Cell C.R. No.7/94, under section 8(c) r/w.22, 29 N.D.P.S. Act, and

WHEREAS a detention order has been passed by the Detaining Authority Govt. of Maharashtra against the said Mr.Iqbal Mohamed Memon @ Iqbal Mirchi vide order No.SPL.3(A)/PND/0194/60, dated 02.,09.1994, and

WHEREAS, Mr. Nitin Khimji Bhanushali, aged 35 years resident of Flat No.801, Bldg. No.6, Neelam Nagar Co-op. Housing Society, Gavanpada, Mulund (East), Mumbai-400 081 and Flat No.60, Bldg. No.8, 'D' Wing, Neelam Nagar Co-op. Housing Society, Gavanpada, B. V. Phadke Marg, Mulund (East), Mumbai-400 081, is an co-accused and associate of Mr. Iqbal Mohamed Memon @ Iqbal Mirchi in C.R. No.7/94 and ... ..." (emphasis supplied)

It is further pertinent to note that this order of freezing the properties in issue has not been served on the petitioner and the learned counsel appearing for the respondents was not able to contradict this assertion of the petitioner.

8. As the aforesaid chronology of events indicates, the Deputy Commissioner of Police, Narcotic Cell, CID, Mumbai sought for confirmation of the aforesaid freezing order, from the Competent Authority under the said Act, vide his communication dated 21st March, 1997. The relevant portion thereof reads thus :

“... ...Sir,

This is a proposal for confirmation of freezing order issued in connection with properties illegally acquired by the accused Nitin Khimji Bhanushali and his relatives i.e. wife Mrs. Neeta N. Bhanushali, Occ.: Household, Res : Flat No.801, Building No.6, Neelam Nagar Co-op. Housing Society, Gavanpada, Mulund (E), Mumbai 81. Mr. Nitin Bhanushali was arrested in this Cell C.R. No.7/94, u/sec.8(c) r/w.22, 29, N.D.P.S. Act, 1985. In this case one Iqbal Mohamed Memon @ Iqbal Mirchi is also an accused and he is wanted in this case. He is also accused in C.R. No.38/93 of this Cell. A Detention Order has been passed by the Detaining Authority, Government of Maharashtra against Iqbal Mohd. Memon vide No.SLP.3(A)/PND/0194/60, dated 2.9.1994. He is the associate of Nitin Khimji Bhanushali in C.R. No.7/94 . ... ...”

(emphasis supplied)

Thus, it appears that the confirmation of the freezing order was sought for not only against the husband of the petitioner but also against the petitioner, she being relative (wife) of the accused in C.R. No.7 of 1994 wherein the aforesaid Iqbal Mirchi was also a co-accused. It is further pertinent to note that the aforesaid request for confirmation was made also because there was a detention order issued against said Iqbal Mirchi as an accused in .R. No.38 of 1993 with which, admittedly, the husband of the petitioner had no concern at all. Only because the aforesaid detention order could not be executed and Iqbal Mirchi remained "wanted accused" as such in C.R. No.38 of 1993, the action was proposed not only against the husband of the petitioner but also against the petitioner.

9. It appears that for the first time the name of the petitioner featured in this communication which ultimately culminated into passing of the impugned order. However, it is worthwhile to note that admittedly even a copy of this communication has not been served on the petitioner. The learned counsel appearing for the respondents was not able to controvert this assertion of the petitioner. More shocking is the last paragraph of this communication which reads thus :

"This freezing order has been served on the concerned persons except Mr. Nitin Khimji Bhanishali." (emphasis supplied)

Thus, it is abundantly clear that the freezing order in respect of the property in question not only was not served on the petitioner but also was not served even on the husband of the petitioner. Thus, till this stage, it is apparent that the action was being taken against the petitioner with respect to the properties in issue held by her, not just without giving any opportunity of being heard to her but also without even serving the orders so issued on the petitioner or even on her husband.

10. The other portion, which is also relevant for our consideration in regard to the properties in issue, as to how the petitioner is concerned with the same, can be found in the following portion of the aforesaid communication dated 21st March, 1997 :

"... ... ......................... ........

1. Flat No.801, J. K. Terrace Flat, Bldg. No.6, Neelam Nagar Co-op. Hsg. Society, Gavanpada, Mumbai. This flat is admeasuring 1685 sq.ft. and was purchased by Nitin Bhanushali from Acme Builder on the name of his wife in the year 1993 for Rs.2,14,163/-. His wife is a housewife and she has no source of income. The agreement copy in respect of the said flat is obtained. The statement of Shri. C. K. Mohandas P. Govind Nair, the secretary of the said society has been recorded in which he stated that as per society record, the flat is in the name of Mrs. Neeta Nitin Bhanushali.

2. Flat No.703, 'A' Wing, Building No.7, Neelam Nagar Co-op. Hsg. Society, Gavanpada, Mulund (E), Mumbai. This flat is admeasuring 588.79 sq.ft. The said flat is stand in the name of Mrs. Neeta N. Bhanushali and same was acquired in the year 1991. The said flat is lying vacant.

The statement of Shri. R. Subramanian K. S. Rajgopal has been recorded in which he stated that the said flat is stands in the name of Mrs. Neeta N. Bhanushali.

3. Shop No.7, Ground floor known as Pooja Dairy in Bldg. No.7, Neelam Nagar Co-op. Hsg. Society, Gavanpada, Mulund (E), Mumbai 81. This shop is admeasuring about 400 sq.ft. And stands in the name of Mrs. Neeta N. Bhanushali. The said shop is acquired by Nitin Bhanushali in the year 1992 on his wife's name. The said shop is closed since 1994. As per the society record the shop is in the name of Mrs. Neeta Nitin Bhanushali.

4. Flat No.601, 'D' Wing Building No.8, Neelam Nagar Co-op. Hsg. Society, Gavanpada, Mulund (E), Mumbai 81 admeasuring 550 sq.ft. As per the society record and agreement copy, the said flat stands in the name of one A. P. Jadhav. The statement of Shri. Govindram K. Ghanshyam has been recorded in which he stated that as per the society record the said flat belongs to A. P. Jadhav. Mr. Nitin Bhanushali and his family members were staying in the flat. Before 3/4 months Mrs. Neeta Nitin Bhanushali vacated the said flat and went to stay in Building No.6, Flat No.801, J. K. Terrace Flat."

On enquiries it is revealed that the maintainance and other charges pertaining to the flat was received from Nitin Khimji Bhanushali. The agreement copy of the said flat is not available with the society.

5. Shop no.2, ground floor, known as Shivanand Dairy in Shivniwas Bldg.; Rajawadi, M.G. Road, Ghatkopar (E), Mumbai. The said shop is in the name of Mrs. Neeta Nitin Bhanushali. One Mr. Gulabrai Jhamromal Kurani is owner of the Shivniwas Bldg. His statement has been recorded. He stated that he has transferred the said shop premises in the name of Mrs. Neeta Nitin Bhanushali in the year 1993. Mr. Nitin Bhanushali approached him with earlier tenant Mr. Somabhai for transferring the said shop in the name of Mrs. Neeta Bhanushali. He has produced the rent receipt copy in the name of Mrs. Neeta Bhanushali for the month of July, 1993. ... ... ..." (emphasis by us)

Thereafter, the order of confirmation of action of freezing the properties in issue vide order dated 30th March, 1997 came to be passed by the Competent Authority under the said Act. The last portion of this very same order reads thus :-

“... ... Therefore, I, A. K. Mehta in exercise of powers conferred in me under section 68-F(2) of the said Act, hereby confirm the said freezing order dated 26.02.1997 made by the aforesaid Inspector of Police, Narcotics Cell, C.B., C.I.D. Mumbai.
I further call upon Shri. Iqbal Mirchi and you to show cause notice under sec.68-H of NDPS Act, 1985 within 30 days of receipt of this notice, as to why the properties mentioned in the schedule to the freezing order dtd.26.02.1997 should not be held as illegally acquired properties and consequentially forfeited to the Central Govt. free from all encumbrances as provided in section 68-I of the NDPS Act.		Competent Authority SAFEMA/NDPS, Mumbai.” Copy to : 1. The Dy.Commissioner of Police, Narcotics Cell, C.B; C.I.D; Mumbai for information.
(A.K.Mehta)
“2. Ms. Neeta Nitin Bhanushali Ms. Pooja Nitin Bhanushali		They are directed not to deal with or transfer the properties mentioned in the freezing order till further orders from this office. This may lease be treated as a show cause notice to you both as some properties appear to be in your names. You can also defend yourselves in case you have own source of acquiring those properties.”

11. Thus, it appears that the aforesaid order dated 20th March, 1997 is a composite document, a part of which is confirmation order whereby the freezing order dated 26th February, 1997 passed in regard to the properties in question has been confirmed, and by the remaining part thereof, show cause notice has been issued u/s.68-H of the said Act, calling upon the persons in respect of whom that order has been issued, to show cause as to why the properties in issue be not forfeited u/s.68-I of the said Act. It is pertinent to note that there are only two persons named in this order against whom the order and obviously, therefore, the show cause notice, appears to have been issued. One of them is the husband of the petitioner and the other one is Iqbal Mirchi. Thus, it is absolutely clear that the order is not issued against the petitioner. However, we hasen to add that a copy of this order is marked to the petitioner and her daughter Ms. Pooja Nitin Bhanushali, as is clear from the endorsements made below the aforesaid order.

12. In this show cause notice-cum-order, a copy of which has been addressed to the petitioner, the ground for issuing such a show cause notice to the petitioner is stated as under :

"... ... ... I, A.K.Mehta being the Competent Authority under Section 68-D of the said Act, on the basis of the relevant information available to me which includes your own statements in which you have admitted that you were associated with Iqbal Mirchi in Narcotics trafficking and also the statement of your wife Mrs. Neeta Nitin Bhanushali wherein she has admitted that the properties mentioned in the annexure to the freezing order (made by Shri. Rade, Inspector of Police, C.B; C.I.D.; on 26.02.1997) were acquired by you in her name from income earned in the illegal business of Narcotics drugs in association of Shri. Iqbal Memon and after carefully examining and considering the relevant information available to me. I have reason to believe that the properties described in the scheduled to the freezing order dated 26.02.1997 which are held by you either in your name or in the name of your wife, are illegally acquired properties traceable to the illegal activities of Iqbal Mirchi, within the meaning of provisions of Sec.68-B(g) and Section 68-C of the NDPSA. ... ... ..."

A perusal of this portion, which is the only portion in the show cause notice set out as the basis for issuing such a show cause notice, shows that the same has been issued on the basis of some "relevant information" available to the competent authority which includes the statements of the persons whose names are set out therein i.e. the husband of the petitioner and Iqbal Mirchi. It also refers to the statement of the petitioner wherein she has allegedly admitted that the properties mentioned therein were acquired by the husband of the petitioner in her name from the income earned in the illegal business of narcotic drugs in association with Iqbal Mirchi. On this basis the show cause notice says that the competent authority has reason to believe that the properties in issue, which are held by the petitioner, are illegally acquired properties traceable to the illegal activities of Iqbal Mirchi. Thus, the show cause notice appears to have been issued on the basis of :-

I. "relevant information" available to the competent authority;

II. statement of the husband of the petitioner that he was associate of Iqbal Mirchi in Narcotic trafficking;

III. the statement of the petitioner that the properties in issue were acquired by her husband in her name from the income earned in the illegal business of Narcotic trafficking in association of Iqbal Mirchi.

13. The competent authority has given only aforesaid three grounds as "reason to believe" that the properties in issue were held in the name of petitioner are illegally acquired properties as contemplated by provisions of Sections 68-B(g) and 68-C of the said Act.

14. At this juncture itself it is pertinent to note that in this show cause notice the competent authority has not disclosed what is "the relevant information available" to the competent authority which is shown as the first ground in support of the "reason to believe" for the competent authority to issue show cause notice. The learned counsel appearing on behalf of the respondents drew our attention to two affidavits filed on behalf of the respondents in support of the impugned action. In none of these two grounds there is even a whisper about such "relevant information available" to the competent authority. On record, we are unable to find any such "relevant information" which was then available to the competent authority on the basis of which the competent authority could have reason to believe that the properties in issue are illegally acquired, as contemplated by the aforesaid provisions of the said Act.

In such circumstances, we are, therefore, constrained to hold that there was no relevant information available with the competent authority at the time of issuance of this show cause notice on the basis of which the competent authority could have had reason to believe that the properties in issue are illegally acquired as contemplated by the aforesaid provisions of the said Act.

15. The second ground given in the show cause notice is that the husband of the petitioner made a statement admitting his association with Iqbal Mirchi in Narcotic trafficking. Firstly, copy of such a statement is not produced on record of this petition nor is it annexed to the affidavit-in-replies filed on behalf of the respondents. We are, therefore, unable to appreciate even this second ground given in the show cause notice.

Assuming that such a statement was made by the husband of the petitioner and that such a statement was before the competent authority while issuing the aforesaid show cause notice, at the highest, the statement was made to the effect that the husband of the petitioner was associated with Iqbal Mirchi in Narcotic trafficking. This statement, as is referred to in the aforesaid show cause notice, does not at all state anything as to the acquisition of properties in issue. Merely because the husband of the petitioner is supposed to have admitted his association with Iqbal Mirchi in the Narcotic trafficking, one cannot have reason to believe that the properties in issue which are standing in the name of petitioner, are the properties acquired illegally as contemplated by the aforesaid provisions of the said Act.

We, therefore, hold that even the second ground set out in the show cause notice being "reason to believe" for the competent authority to come to the conclusion that the properties in issue are illegally acquired under the aforesaid provisions of the said Act, is without any substance.

16. The third ground given in the show cause notice is the statement made by the petitioner wherein she is supposed to have admitted that the properties in issue are acquired by the husband of the petitioner in her name from the income earned in the illegal business of Narcotic Trafficking by him in association with Iqbal Mirchi.

Firstly, a copy of said statement has not been placed on record by the learned counsel appearing on behalf of the respondents nor is it annexed to the affidavit-in-reply. We, therefore, had specifically asked the learned counsel appearing on behalf of respondents to make us available a copy of said statement of the petitioner. However, even after a couple of adjournments granted to the respondents for that purpose, the learned counsel appearing on behalf of the respondents was not able to produce a copy of said statement on record. He mentioned that at present, the respondents were unable to trace it out from their old record. Be that as it may.

We have our own doubts about the admissibility in law, of such statement of the petitioner, if at all it is there. It is not clear from the record as to who recorded the statement, in which proceedings was it recorded, under which provision of what law the same was recorded and how is it that the lower authorities have relied on it and the basis in law to have reason to believe what has been so believed. Suffice it to say that the respondents have miserably failed to convince us firstly about its existance, secondly as to how can it be read in evidence and thirdly how can it be relied upon in law to form a basis to have "reason to believe" as contemplated by the provisions of said Act.

Thus, we hold that the third ground given in the show cause notice by the Competent Authority as a "reason to believe" for issuing the show cause notice u/s.68-H of the said Act also is without any substance at all.

17. In view of the aforesaid observations made and findings recorded by us, it is clear that the competent authority had issued the show cause notice u/s.68-H of the said Act without there being any "reason to believe" as contemplated by provisions of Sections 68-B(g) and 68-C of the said Act.

18. On the basis of the aforesaid show cause notice the competent authority further conducted the proceedings and has passed an order on 14th/15th October, 1999 u/s.68-D of the said Act and had declared the properties in issue to be the illegally acquired properties. A further order is also passed for forfeiture to the Central Government of the properties in issue u/s.68-I of the said Act. This composite order calls upon the petitioner u/s.68-U of the said Act to surrender the possession of the properties in issue.

19. A perusal of the aforesaid order of forfeiture that has been issued by the competent authority demonstrates that this order has been passed only and only on the ground that the petitioner has failed to show any source of legal income and/or earnings that would have enabled her to acquire the properties in issue. The entire order is eloquently silent as to on what basis the competent authority firstly had 'reason to believe' that the properties in issue were illegally acquired as contemplated by the provisions of said Act. The relevant portion of the order reads thus :

"... ... 16. It is apparent from the records that in the absence of any legal income, the huge properties acquired by AP-1 either in his own name or in the name of his wife Smt. Neeta N. Bhanushali were sourced from the earnings of the illegal drug trade carried out in association with AP-2. As the burden of establishing that the freezed properties were not acquired from earnings of the said illegal activities was on Smt.Neeta N. Bhanushali and she was given several opportunities by the Competent Authority to do so. Apart from submitting a copy of a Balance Sheet and a computation of Income statement for a particular year, there was no effort from either the AP-1 or his wife to prove that the properties were acquired from legal sources.

17. Merely submitting the said documents with no acknowledged copy of the Income-Tax return or an assessment order or any supporting document showing the source of income can hardly be said to be discharging the burden. More so, inspite of being directed both by the ATFP, New Delhi and the Hon'ble High Court, Mumbai to seek remedy before the Competent Authority, the reluctance on her part to do so has left the undersigned with no choice but to decide the case on the basis of the evidence/documents available on record.

18. As the AP-1 was absconding till December, 1998, his wife who was also a noticee was seeking dismissal by claiming to have acquired the properties from her independent income. After having had all her proposals and petitions rejected, Smt. Neeta N. Bhanushali requested to the Competent Authority to send the proceedings and show cause notices to AP-1 in Jail. This request was also complied with but the AP-1 did not make any attempt to represent his case before the Competent Authority by making an application to the Jail Superintendent to appear before the Competent Authority or by appointing a representative.

19. It could be argued that Smt. Neeta N. Bhanushali is a relative of an associate of a detenu, hence proceedings against her properties are not contemplated under the NDPS Act. This argument can only be applied to the independent properties of the relative and not to the properties illegally acquired by the State and held in the name of his/her relative like in this case. As there is no material on record to suggest that properties in question purported to be in the name of Smt. Neeta N. Bhanushali were independently acquired by her from her legal sources, the same were rightly freezed by the Mumbai Police so that forfeiture proceedings could be initiated.

20. From the foregoing, it is evident that neither the AP-1 nor his wife Smt. Neeta N. Bhanushali had any evidence to prove the legality of the properties under notice for the simple reason that the properties have been acquired from the earnings of illegal drug trafficking. Smt. Neeta N. Bhanushali has only tried to delay the due process of law by moving the ATFP and the High Court. Her latest ploy of iling SLP in the Apex Court is also directed to further delay the proceedings.

21. Since the Aps and the noticee have failed to prove that the properties in question have been acquired out of their legal sources of income, I, Maheshwar Prasad, Competent Authority authorised under section 68-D of the Act declare the said properties to be illegally acquired properties and order their forfeiture to the Central Government free from all encumbrances under Section 681 of the Act."

20. Thus, it is clear that the competent authority has passed the aforesaid order of forfeiture of the properties in issue as the petitioner failed to produce any material on record to show that she independently from her legal sources has acquired the properties in issue. At the cost of repetition we note that this finding has been recorded in absence of any observation and/or finding as to firstly the basis for having "reason to believe" that the properties in issue have been illegally acquired, as contemplated by the provisions of the said Act. In other words the burden is cast upon the petitioner without firstly showing any 'reason to believe' as such, and the order is issued by holding that the Petitioner has failed to discharge such burden. We will deal with sustainability of this approach a little later at length.

21. When the petitioner carried the matter in appeal before the said Tribunal, the Tribunal was pleased to dismiss her appeal by its judgment dated 1st March, 2000. A perusal of this judgment reveals that the said Tribunal has also toed the aforesaid line of approach adopted by the competent authority inasmuch as, the grounds and/or the basis for forfeiture of the properties in issue is concerned. A careful perusal of the entire judgment of the said Tribunal also reveals no grounds at all to have any "reason to believe" that the properties in issue were acquired illegally as contemplated by the provisions of said Act. The said Tribunal also proceeds on the basis that the burden is on the petitioner to show that the petitioner has acquired the properties in issue, from an independent legal source and that the petitioner has miserably failed to discharge the burden so cast on her. It appears that the said Tribunal is of the view that only and only on this ground, as a matter of course, the order of forfeiture of the said properties in issue must follow. This will be clear from the following relevant extracted portion of the order of Tribunal :-

"6. Before the Competent Authority, Nitin Khimji Bhanushali did not file any reply to the show cause notice and made no appearance and did not adduce any evidence. Neeta Nitin Bhanushali after obtaining several adjournments before the Competent Authority, requested by her letter dated 28.8.1999 that the Competent Authority may send all copies and notices of order to her husband who was confined in jail, with which request, the Competent Authority complied. No material or evidence, except a copy of the balance sheet and a computation of income statement were placed before the competent authority by either of the appellants. The competent authority had no option but to pass the impugned order based on the record and the materials before him."

"10. It was nextly contended by the learned counsel that the burden of proving that the properties are illegally acquired properties lay on the competent authority and that it was not necessary for the appellants to prove that the properties were not illegally acquired properties. This contention is also based on the premise that Neeta is not a person to whom Chapter VA is applicable and is rejected in view of our holding that she is a person within the meaning of section 68-A(2)(d) and Sec.68-B(b)VII.

11. In order to appreciate the contention of the learned counsel, that the burden of proof does not lie on the appellants, it is necessary to examine Sec.68-J which is as follows :-

'Burden of proof - In any proceedings under this Chapter, the burden of proving that any property specified in the notice served under Sec.68-H is not illegally acquired property shall be on the person affected.'

From the above provision relating to burden of proof, the contention is that Neeta is not a "person affected", in as much as the said expression is used in Sec.68-H and can refer only to person to whom the notice under Sec.68-H(1) is issued. The notice under Sec.68-H(1) was issued to Nitin and a copy of the said notice was served on his wife as required by Sec.68-H (2), as she held the property on behalf of Nitin and hence Neeta is also a person affected. ... ...

.................. The burden of proving that the properties specified in the notice served under Sec.68-H are not illegally acquired properties was on the appellants. The appellants did not do anything to discharge the burden cast on them."

"15. It was next submitted that though the appellant did not adduce any evidence on her behalf, it was imperative on the part of the competent authority to base his findings on the evidence available with him in holding that the properties are illegally acquired and that the mere fact that no evidence is adduced by the appellant cannot be a ground to proceed ex-parte. This contention over-looks proviso to sec.68-I which enables the competent authority to proceed to record a finding under sub-section 1 to sec.68-I, if the person affected does not appear or represent his case within 30 days specified in the show-cause notice, on the basis of the evidence available before the competent authority. There is therefore no illegality in the order of the competent authority in proceeding to record a finding, when the appellant failed to appear and adduce evidence as required by law."

"16. The contention that the order of the competent authority is not an order in the eye of law as there is no discussion of evidence is without substance. The competent authority based his findings on the available record and in the absence of any evidence to show that the properties were acquired with legal income, he was justified in finding that the properties were acquired in the name of Neeta by her husband, with the income from illegal drug trade carried out in association with the detenu."

22. The aforesaid extracted portion of the impugned judgment of the Tribunal will demonstrate that the Tribunal proceeded on the ground that the burden was squarely on the petitioner which, according to the Tribunal, she failed to discharge and that therefore, the order of forfeiture was sustainable. We will test the legality of this approach hereunder. But before we do that we must refer to one more aspect of the impugned judgment of the Tribunal.

23. The Tribunal has also referred to the contention of the respondents herein that the petitioner had given a statement before the Police on 15th February, 1997 whereby she is supposed to have admitted that her husband had acquired the concerned properties in her name from the income earned by him in the illegal business of Narcotic Trafficking undertaken by him in association with Iqbal Mirchi. By referring to this statement in para 18 of the impugned judgment, the Tribunal has observed that sections 25 and 26 of the Cr.P.C. will have no application to this statement as this alleged statement of the petitioner cannot by any stretch of imagination be treated as confession since the petitioner was not an accused in any offence and since she was never in police custody.

The Tribunal further in relation to the aforesaid alleged statement of the petitioner states as under :

"19. It was next contended that under Sec.162, Cr.P.C., 1973 the statement cannot be made use in evidence. Sec.162 only prohibits the use of statement made to a police officer in the course of an investigation, at an inquiry or trial in respect of any offence under investigation at the time when such statement was made. The Competent Authority was not concerned with the trial of Nitin and the detenu. Hence, there was no embargo in making use of the statement recorded by the Mumbai Police in connection with an offence. The proceeding before the Competent Authority were under Chapter VA of NDPS Act. However, the Competent Authority had other material on record which corroborated the statement of Neeta and there was no illegality in relying on her statement. The decisions relied on by the learned Counsel in 1999(7) SCC 69 and 1999(4) SCC 621 are of no help to him."

24. We are at pains to note that even this judgment of the Tribunal does not disclose at all any "other material on record" which the competent authority allegedly had with it to corroborate the alleged statement of the petitioner. As observed hereinabove, the show cause notice issued by the competent authority does not also refer to any such material on its record. The affidavits in reply filed in the present petition also do not refer to any such material and its nature, much less particulars.

In such scenario, we are constrained to hold that there was no "other material on record" before the competent authority nor before the Tribunal, which would corroborate the alleged statement of the petitioner.

25. As held by us hereinabove, the alleged statement of the petitioner by itself cannot be considered as an evidence at all in the present case to prima facie start with an assumption that the properties in issue were acquired illegally, as contemplated by the provisions of the said Act. At the cost of repetition we may say that it is not known as to in which proceedings, who, under what law, under what capacity of the petitioner (whether as a suspect or as a witness or as an accused) the alleged statement of the petitioner was recorded. We are, therefore, totally at loss to know as to how, in law, the alleged statement of the petitioner could have been relied upon either by the competent authority or by the Tribunal to start with the assumption that the properties in issue were illegally acquired as provided by the provisions of the said Act.

26. We have stated hereinabove that we will deal with the issue of burden of proof at a later stage in this judgment. We are considering it now hereunder.

A perusal of Chapter-VA of the said Act demonstrates that this chapter lays down a self sufficient scheme as to forfeiture of property acquired from illicit trafficking. The analysis of the scheme will show that u/s.68-H of the said Act, a notice can be issued as to forfeiture of a property if the competent authority has firstly "reason to believe" and secondly after "recording in writing" such 'reasons to belief' that such properties are illegally acquired as contemplated by the provisions of this chapter. The statutory requirement firstly to have a reason to such a belief and secondly recording of such reason to belief, means that the competent authority while issuing a notice as contemplated by section 68-H of the said Act, must give 'reasons to believe' that as the property which is subject matter of the notice has been illegally acquired as contemplated by the said Act, in the notice issued under that section.

27. It is true that section 68-J of the said Act casts burden on the affected person (like petitioner) of proving that the property which is subject matter of a notice issued u/s.68-H is not illegally acquired property. However, in our view, such a burden will be cast upon the person affected, like the petitioner herein, only and only if notice u/s.68-H of the said Act is issued by the competent authority, firstly if the competent authority has reason to believe that the property which is subject matter of the notice has been illegally acquired as contemplated by the said Act and secondly, if such reasons are recorded in writing. In other words, if, the competent authority :

1. has no reason to belief

or

2. had reason to believe but such reasons are not recorded in writing

or

3. had no reason to believe and has not recorded in writing such reasons.

and still issues notice u/s.68-H, the burden contemplated by aforesaid section 68-J of the said Act, cannot be cast on the persons affected by such a notice, like the petitioner, to prove that the properties that are the subject matter of such a notice are not illegally acquired.

28. In the light of the view that we have taken hereinabove on the interpretation of section 68-H r/w section 68-J and in the light of the findings recorded by us hereinabove, it is clear that in the present case, the show cause notice was issued u/s.68-H without there being any "reason to believe" for the competent authority that the properties in issue were illegally acquired as contemplated by the provisions of said Chapter V-A, of the said Act. Therefore we hold that both, the Competent Authority and the Tribunal have erred in view of the facts of this case in holding that the properties in issue have been illegally acquired by the petitioner, as contemplated by the provisions of the said Act. In our view, in absence of any material worth named before the competent authority which could have been considered as the basis for issuance of notice u/s.68-H of the said Act, the burden, as contemplated by section 68-J of the said Act, could not have been cast on the petitioner and the impugned actions could not have been taken against the petitioner for having failed to discharge such burden which was wrongly cast on the petitioner.

29. We are supported in law by the judgment of the Supreme Court delivered in the case of Aslam Mohamed Merchant Vs. Competent Authority and others reported in 2008(5) AIR Bom. R 306. The relevant paragraphs of this judgment read as under :-

The Paragraph 16 of the Supreme Court Judgment sets out the issue that was considered, and the discussion as to its consideration that is relevant for our purpose is in the following terms:

"ISSUE.

16. The core question which, therefore, arises for consideration is what are the statutory requirements for initiating a valid proceeding."

"24. ............Analysis of the aforementioned provisions clearly establish that a link must be found between the property sought to be forfeited and the income or assets or properties which were illegally acquired by the person concerned."

"28. It is, however, beyond any doubt or dispute that a proper application of mind on the part of the competent authority is imperative before a show cause notice is issued.

Section 68-H of the Act provides for two statutory requirements on the part of the authority viz. : (i) he has to form an opinion in regard to his 'reason to believe'; and (ii) he must record reasons therefor.

Both the statutory elements, namely, 'reason to believe' and 'recording of reasons' must be premised on the materials produced before him. Such materials must have been gathered during the investigation carried out in terms of Section 68-E or otherwise. Indisputably therefore, he must have some materials before him. If no such material had been placed before him, he cannot initiate a proceeding. He cannot issue a show cause notice on his own ipse dixit. A roving enquiry is not contemplated under the said Act as properties sought to be forfeited must have a direct nexus with the properties illegally acquired."

"32. We, with utmost respect to the learned Judges express our inability to agree to the said observations. The necessity of establishing link or nexus in our opinion is writ large on the face of the statutory provision as would appear from the definition of 'illegally acquired property' as also that of 'property'. The purport and object for which the Act was enacted point out to the same effect."

"34. In the final order, the rule of evidence as envisaged under Section 68-I read with Section 68-J of the Act must be applied. A person affected would be called upon to discharge his burden provided a link or nexus is traced between the holder of the property proceeded against and an illegal activity of the detenu. Such a formation of belief is essential."

"42. Had the show cause notice been valid, Mr. B. B. Singh, might have been right, but if the proceedings themselves were not initiated validly, the competent authority did not derive any jurisdiction to enter into the merit of the matter.

Legality and/or validity of the notice had been questioned at several stages of the proceedings. Despite their asking, no reason was disclosed by the authority to the appellants. They had asked for additional reasons, if any, which were not reflected in the show cause notices. None was disclosed."

30. It is pertinent to note that the aforesaid view has been taken by the Supreme Court even after considering the judgment delivered by the Supreme Court in the case of Attorney General of India Vs. Amrutlal Prajivandas and others reported in AIR 1994 SC 2179, which is the very judgment that is relied by the said Tribunal in its impugned judgment and order. The same judgment is also relied before us by the learned counsel appearing for the respondents. However, in view of the aforesaid latest Supreme Court judgment which considers that judgment also, we need not dwell upon the same herein.

31. The learned counsel for the petitioner contended that no action could have been initiated against the petitioner, even if the case of the respondents is considered in its totality, as the same would mean that the action is taken against the petitioner because she is the wife of an alleged associate of one Iqbal Mirchi against whom the detention order still stands and has remained unexecuted, which is issued under the said Act. In the submission of learned counsel for the petitioner it is almost like a case where the respondents are taking action against an associate of an associate of Iqbal Mirchi, the main accused, which, in his submission, was not permissible in law. We are unable to accept this contention of the learned counsel for the petitioner for the simple reason that if, and of course, only if the competent authority had 'reason to believe' which are 'recorded in writing' that the properties in issue are acquired illegally as contemplated by the said Act, such an action could have been taken against the petitioner in view of Section 68-A(ii)(d) as well as section 68 B(b)(vii) of the said Act. In our view therefore the petitioner can not succeed on this ground.

32. The learned counsel for the respondents tried to support the impugned action on the basis of the affidavits filed by the respondents which do not further the case of the respondents beyond what has been considered by us hereinabove.

33. We have noted hereinabove at the threshold of the judgment itself that the husband of the petitioner has already been acquitted of all the charges framed against him which was the only basis for the respondents to proceed against the petitioner on the ground that the husband of the petitioner is an associate of Iqbal Mirchi and that he is also a co-accused along with Iqbal Mirchi in C.R. No.7 of 1994. In our view, therefore, really there is no basis to proceed against the petitioner being the wife of an associate of Iqbal Mirchi. Apart from anything else, in this regard, if the provision of the section 68-Z of the said Act is considered in its proper perspective, it becomes clear that these subsequent developments have, truly speaking, rendered the impugned action totally unsustainable.

34. During the course of arguments the learned counsel appearing on behalf of the 5th respondent submitted that on 7th December, 1999 the 5th respondent has obtained actual physical possession of the properties in issue. The sixth respondent herein had initially filed a Criminal Application No.7039 of 2005 for impleading him as a party respondent. This application was allowed and the sixth respondent was added as a party respondent to the present petition. It is the contention of sixth respondent that not the petitioner but the sixth respondent is the tenant of one of the properties in issue namely Shop No.2 (the details of which are set out in paragraph 2 of this judgment).

35. As a consequence of our aforesaid conclusions and findings, particularly that the impugned action of forfeiture of the properties in issue is unsustainable, it is necessary in the interest of justice also to pass a consequential order and direct the respondents to restore the actual physical possession of the properties in issue to the respective persons from whom the respondent no.5 has obtained such actual physical possession. We make it abundantly clear that we are not dealing by this judgment and order with the controversy inter-se between the private parties as to the entitlement and/or rights regarding the properties in issue. Consequently, it will be open for the contesting parties to adopt appropriate procedure to ventilate their grievances, if any in that regard, as may be permissible in law.

36. In view of the aforesaid findings and observations made by us, we allow this writ petition and make Rule absolute in terms of prayer clause (b) thereof with no order as to costs. We also further direct the 5th respondent, within eight weeks from today, to restore the actual physical possession of all the properties in issue (details of which are set out in paragraph 2 of this judgment) to the respective persons from whom the 5th respondent had obtained actual physical possession thereof.

Petition allowed.