Zahid Parwez v. Union of India & Ors

order becomes illegal." It was also observed: (SCC p. 512, para 10) "10. In the present case, in the notice dated 15-3-1988 issued to the appellant under Section 6(1) of the Act (copy of which is annexed as Annexure P-1 to this appeal), it has not been alleged therein that there is any such link or nexus between the property sought to be forfeited and the alleged illegally acquired money of the appellant.

¶47In the final order, the rule of evidence as envisaged under Section 68-I read with Section 68J 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 LPA No.996/2011 Page 20 of

the holder of the property proceeded against and an illegal activity of the detenu. Such a formation of belief is essential."

¶22We are of the opinion that what is provided in para 47 reflects the principle of law laid down by the Apex Court. Reading this, it can be concluded that before issuing show cause notice some information or material has to be placed before the Competent Authority gathered during the investigation carried out in terms of Section 68E or otherwise. On the basis of this material the Competent Authority has to record his satisfaction to the effect that he has reason to believe that the property sought to be forfeited has link with the income or assets or properties which were illegally acquired by the persons concerned. The Competent Authority is required to record his reasons on the basis of that belief which reason should be either in the show cause notice itself or are recorded in the file. Once this exercise is done and reflected either in the notice or from record then the statutory requirement of show cause notice as per Section 68H of the NDPS Act shall be treated as satisfied. In that event the burden of proof would be on the notice to prove that any property specified in the notice served under Section 68H is not illegally acquired property. Section 68H is enacted keeping in mind the fact that the details and particulars as to how a particular property has been acquired by a person are within his special knowledge and it is for him to explain the source thereof.

¶23We find that in the instant case the learned Single Judge has, on the basis of Section 68J of the NDPS Act, jumped to the second aspect holding that the appellant could not discharge the burden as to how LPA No.996/2011 Page 21 of

he acquired the property. First aspect, namely, validity of Section 68H of the Act, i.e., whether it fulfilled the statutory requirement as explained in P.P. Abdulla and Another (supra) and Aslam Mohammad Merchant v. Competent Authority and Others (supra) has not been gone into and in fact, two issues are mutually exclusive and are required to be examined independent of each other.

¶24Be as it may, Mr. Chandhiok may be correct in his submission that this argument about the validity of the show cause notice was raised for the first time in the writ petition. The validity was not questioned before the adjudicating authority or the appellate authority and defence was given only on the sound aspects, i.e., on merits trying to explain the source of funds wherefrom the properties were purchased. Probably, that is the reason that the learned Single Judge has dealt with this aspect only. To examine the validity of show cause notice, we called for the records. We may point out that the "reasons to believe" supplied to the appellant have not been placed on the record of this case. We were, therefore, in a disadvantageous position as in the absence thereof it could not be found as to whether necessary requirement for issuance of the show cause notice are fulfilled or not. For this reason, we directed production of the original records, including "reasons to believe". We have examined those records.

¶25Record shows that the Inspector, Narcotics Control Bureau, Eastern Zonal Unit, Calcutta had frozen the properties in question by orders dated 15.7.1993 under Section 68F(1) of the NDPS Act and this order was confirmed by the Competent Authority, Calcutta on 28.7.1993 under Section 68F(2) of the Act. Thereafter, show LPA No.996/2011 Page 22 of

cause notice was issued to the appellant on 20.4.1994, inter alia, stating that on the basis of the relevant information and/or relevant materials available to the Competent Authority, he had reason to believe that properties in question held by the appellant were illegally acquired properties within the meaning of Section 68B(g) of the NDPS Act. The "reasons to believe", which were recorded and supplied to the appellant start with the narration regarding detention order passed against the brother of the appellant under PITNDPS Act, 1988 and being a brother the appellant was a person covered under Section 68A(2)(d) of the NDPS Act. Thereafter, description of the three properties is given and it is mentioned that since the source of fund of the said properties could not be verified, the properties are taken as wholly and illegally acquired properties under Section 68B(g) of the NDPS Act and therefore, it is stated that for this reason notice be issued to the appellant to indicate source of his income, earnings or assets out of which or by means of which he had acquired such properties.

¶26From the narration in "reasons to believe" it becomes clear that the properties in question ostensibly in the name of the appellant were sought to be connected with his brother by specifically mentioning about his detention. Though it is not stated in so many words that the properties in question were acquired from the illegal income of the detenu, such a link can clearly be inferred and is discernible from the entire reading of the "reasons to believe". Record shows that the material gathered during investigation carried out in terms of Section 68E of the NDPS Act was produced before the Competent Authority. Investigation revealed that the source of fund of these properties could not be verified even when the LPA No.996/2011 Page 23 of

appellant was an income-tax assessee. On that basis, link was inferred with the detenu and the properties were taken wholly and illegally acquired properties under Section 68B(g) of the NDPS Act. On the basis of this material, we are of the opinion that statutory conditions laid down under the Act stand satisfied and the burden is shifted upon the appellant to show the source of the said properties and prove that they were not illegally acquired.

¶27In so far as discharge of burden by the appellant as contemplated under Section 68J is concerned, from the reading of the orders of all the authorities below, including the learned Single Judge it is clear that he has miserably failed to do so and in fact, no attempt was made even before us to show the source of income from which the properties were purchased as there is no explanation worth the name coming on record from where the funds for purchase of these properties were arranged.

¶28For the aforesaid reasons, we hold that the orders of the authorities below do not call for any interference. We accordingly dismiss the appeal with costs.

ACTING CHIEF JUSTICE

(RAJIV SAHAI ENDLAW) JUDGE

July 13, 2012 HP

* IN THE HIGH COURT OF DELHI AT NEW DELHI + LPA No.996/2011, CM No.570/2012, 21654/2011 Reserved on: 15th March, 2012 % Pronounced on: 13th July, 2012 SHRI ZAHID PARWEZ …..APPELLANTS through : Mr.Saurav Kirpal with Mr. B.B. Bhatia, Mr.Navjot Kumar, Mr. Rajendra Sahu and Ms. Jyoti Taneja VERSUS UNION OF INDIA & ORS. …..RESPONDENTS through: Mr. A.S. Chandhiok, ASG with Mr.Ruchir Mishra, Mr. Ritesh Kumar, Mr. Piyush Sanghi and Mr. Yash Wardhan Tiwari for the UOI. CORAM :- HON'BLE THE ACTING CHIEF JUSTICE HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW A.K. SIKRI (Acting Chief Justice) 1. The appellant was issued a show cause notice dated 20.4.1994 under Section 68H(1) of the Narcotic Drug and Psychotropic Substances Act, 1985 (hereinafter referred to as the "NDPS Act") stating that he was covered under Section 68A(2)(d) of the NDPS Act and had acquired certain properties specified in the said notice illegally within the meaning of the said provision of Section 68B(g) of the NDPS Act. After receiving the reply, the Competent Authority passed the orders dated 16.10.1997 holding that the properties were acquired illegally, which were forfeited by the Central Government free from all encumbrances. The appeal filed by the appellant before the Competent Authority for the forfeited properties was dismissed. Challenging that order, the appellant preferred a Writ Petition under Article 226 of the Constitution, which was also dismissed vide impugned judgment dated 21.10.2011. It is against this order, the present Letters Patent Appeal is filed by the appellant under Clause 10 of the Letters Patent Charter. 2. The relevant facts leading to the passing of the aforesaid orders may be recapitulated at this stage. The appellant herein is brother of one Mohd. Azad @ Avid Parwiz son of Abdul Rouf (hereinafter referred to as the "Detenu"). In the case of the detenu, orders dated 26.7.1989 were passed by the Government of India under Section 3(1) of the Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988 (PITNDPS Act) with a view to prevent him from engaging in manufacture, possession, sale, purchase, transportation, warehousing, import and export inter- state of narcotic drugs. Pursuant thereto, the detenu was detained on 10.7.1991. The period of detention is three months. However, on 12.8.1991 the Government issued a declaration under Section 10(1) of the PITNDPS Act to justify the detention beyond the initial period of three months. The detenu challenged the said detention order dated 26.7.1989 before the Calcutta High Court. The writ petition filed by him was dismissed upholding the detention. The detenu had approached the Supreme Court by way of Special Leave which was also dismissed. The detenu also challenged the declaration made under Section 10(1) of the PITNDPS Act by filing a writ petition in this Court. This writ petition was allowed holding that though initial period of detention was justified, continuous detention beyond three months was vitiated. 3. Under Chapter V-A of the NDPS Act there can be forfeiture of property derived from or is used in illicit traffic. Section 68A enlists the persons who would be covered by the said chapter. A person in respect of whom an order of detention has been made, inter alia, under the PITNDPS Act is obviously covered by the provisions of this Chapter. In addition, as per Section 68A(2)(d), any person who is relative of a person so detained, also gets covered. The appellant being a brother of the detenu would fall within the coverage net. He was issued show cause notice under Section 68H(1) of the NDPS Act on 20.4.1994. It would be relevant here to reproduce Sections 68H(1), 68-I(1) and 68J, which read as under:- "68H. Notice for forfeiture of property.-(1) If, having regard to the value of the properties held by any person to whom this Chapter applies, either by himself or through any other person on his behalf, his known source of income, earnings or assets, and any other i