REGISTERED No. D- (D) -72
रजिस्ट्री सं ० डी- ( 3 ) -72
भारत का राजपत्र
The Gazette of India
श्रसावारण
EXTRAORDINARY
भाग II- खण्ड 1
PART II-Section 1
प्राधिकार से प्रकाशित
PUBLISHED BY AUTHORITY
सं० 76]
नई दिल्ली , बुधवार , नवम्बर 5 , 1975/ कार्तिक14, 1897
No. 75] NEW DELHI , WEDNESDAY , NOVEMBER 5, 1975 /KARTIKA 14, 1897
इस भाग में भिन्न पृष्ठ संख्या वी जाती है जिससे कि यह अलग संकलन के रूप में रखा जा सके ।
Separate paging is given to this Part in order that it may be filed as a separate compilation.
MINISTRY OF LAW , JUSTICE AND COMPANY AFFAIRS
(Legislative Department)
New Delhi , the 5th November, 1975 / Kartika 14, 1897 ( Saka )
THE SMUGGLERS AND FOREIGN EXCHANGE MANIPULA- TORS ( FORFEITURE OF PROPERTY) ORDINANCE , 1975
No. 20 OF 1975
An Ordinance to provide for the forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators and for matters connected therewith or incidental thereto .
Promulgated by the President in the Twenty-sixth Year of the Republic of India .
WHEREAS for the effective prevention of smuggling activities and foreign exchange manipulations which are having a deleterious effect on the national economy it is necessary to deprive persons engaged in such activities and manipulations of their ill- gotten gains;
AND WHEREAS such persons have been augmenting such gains by violations of wealth - tax , income- tax or other laws or by other means and have thereby been increasing their resources for operating in a clandes- tine manner;
AND WIIEREAS such persons have in many cases been holding the properties acquired by them through such gains in the names of their relatives , associates and confidants ;
AND WHEREAS Parliament is not in session and the President is satisfied that circumstances exist which render it necessary for him to take immediate action;
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NOW, THEREFORE , in exercise of the powers conferred by clause (1) of article 123 of the Constitution, the President is pleased to promul- gate the following Ordinance , namely: -
1. ( 1 ) This Ordinance may be called the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property ) Ordinance, 1975.
(2) It extends to the whole of India except the State of Jammu and Kashmir .
Short title, extent and com- mence- ment,
(3) It shall come into force at once .
Appli- cation.
2. ( 1 ) The provisions of this Ordinance shall apply only to the persons specified in sub - section ( 2) .
(2) The persons referred to in sub -section ( 1 ) are the following , namely:-
(a) every person-
52 of 1962 , ( i) who has been convicted under the Sea Customs Act , 1878 , or the Customs Act, 1962 , of an offence in relation to goods 8 of 1878 . of a value exceeding one lakh of rupees ; or
7 of 1947 .
46 of 1973 .
(ii ) who has been convicted under the Foreign Exchange Regulation Act , 1947, or the Foreign Exchange Regulation Act, 1973 , of an offence , the amount or value involved in which exceeds one lakh of rupees ; or
8 of 1878. 52of 1962 .
(iii) who having been convicted under the Sea Customs Act, 1878 , or the Customs Act , 1962, has been convicted subsequently under either of those Acts ; or
7 of 1947 .
(iv) who having been convicted under the Foreign Ex- change Regulation Act , 1947, or the Foreign Exchange Regula- tion Act , 1973 , has been convicted subsequently under either of 46 of 1973. those Acts;
52 of 1974 .
(b ) every person in respect of whom an order of detention has been made under the Conservation of Foreign Exchange and Preven- tion of Smuggling Activities Act, 1974 :
Provided that-
(i) such order of detention , being an order to which the provisions of section 9 or section 12A of the said Act do not apply , has not been revoked on the report of the Advisory Board under section 8 of the said Act or before the receipt of the report of the Advisory Board ; or
(ii) such order of detention , being an order to which the provisions of section 9 of the said Act apply, has not been revok- ed before the expiry of the time for , or on the basis of, the review under sub - section (3) of section 9 , or on the report of the Advisory Board under section 8 , read with sub - section ( 2) of section 9 , of the said Act ; or
(iii) such order of detention , being an order to which the provisions of section 12A of the said Act apply , has not been revoked before the expiry of the time for , or on the basis of, the first review under sub - section ( 3 ) of that section , or on the basis of the report of the Advisory Board under section 8, read with sub -section ( 6) of section 12A, of that Act ; or SEC. 1 ]
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( iv) such order of detention has not been set aside by a court of competent jurisdiction ;
(c) every person who is a relative of a person referred to in clause (a) or clause ( b ) ;
(d) every associate of a person referred to in clause ( a) Of clause ( b ) ;
(e) 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) unless the present holder or , as the case may be , any one who held such pro- perty after such person and before the present holder , is or was a transferee in good faith for adequate consideration.
Explanation 1. For the purposes of sub- clause ( i ) of clause (a) , the value of any goods in relation to which a person has been convicted of an offence shall be the wholesale price of the goods in the ordinary course of trade in India as on the date of the commission of the offence.
Explanation 2.- For the purposes of clause (c) , " relative " , in relation to a person , means-
(i) spouse of the person;
(ii) brother or sister of the person;
(iii ) brother or sister of the spouse of the person;
(iv ) any lineal ascendant or descendant of the person;
(2) any lineal ascendant or descendant of the spouse of the person;
(vi) spouse of a person referred to in clause ( ii ) , clause ( iii ) , clause ( iv ) or clause ( v ) ;
(vii) any lineal descendant of a person referred to in clause ( ii ) or clause ( iii ) .
Explanation 3. For the purposes of clause ( d) , " associate" , in rela- tion to a person , means-
(i) any individual who had been or is residing in the residential premises (including outhouses ) of such person;
(ii ) any individual who had been or is managing the affairs or keeping the accounts of such person;
1 of 1956,
( iii) any association of persons , partnership firm, or private company within the meaning of the Companies Act,1956, of which such person had been or is a member , partner or director;
(iv) any individual who had been or is a member, partner or director of an association of persons , partnership firm or private com- pany referred to in clause ( iii ) at any time when such person had been or is a member, partner or director of such association , partner- ship firm or private company;
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(v) any person who had been or is managing the affairs , or keeping the accounts , of any association of persons , partnership firm or private company referred to in clause ( iii ) ;
(vi) the trustee of any trust , other than a trust created before the commencement of this Ordinance wholly for public religious or charitable purposes , where, -
(a) the trust has been created by such person; or
(b) the value of the assets contributed by such person ( in- cluding the value of the assets , if any , contributed by him ear- lier) amounts , on the date on which the contribution is made , to not less than twenty per cent. of the value of the assets of the trust on that date;
(vii) any individual whom the competent authority, for reasons to be recorded in writing , considers to be holding any properties on behalf of such person .
3. In this Ordinance , unless the context otherwise requires ,-
Definitions .
(a) "Appellate Tribunal" means the Appellate Tribunal for Forfeited Property constituted under section 12 ;
(b) " competent authority " means an officer of the Central Government authorised by it under sub - section ( 1 ) of section 5 to perform the functions of a competent authority under this Ordinance;
(c) " illegally acquired property " , in relation to any person to whom this Ordinance applies , means-
(i) any property acquired by such person, whether before or after the commencement of this Ordinance , wholly or partly out of or by means of any income , earnings or assets derived or obtained from or attributable to any activity prohibited by or under any law for the time being in force relating to any matter in respect of which Parliament has power to make laws ; or
( ii ) any property acquired by such person, whether before or after the commencement of this Ordinance , wholly or partly out of or by means of any income, earnings or assets in respect of which any such law has been contravened ; or
( iii) any property acquired by such person, whether before or after the commencement of this Ordinance , wholly or partly out of or by means of any income, earnings or assets the source of which cannot be proved and which cannot be shown to be attributable to any act or thing done in respect of any matter in relation to which Parliament has no power to make laws ; or
( iv ) any property acquired by such person, whether before or after the commencement of this Ordinance, for a considera- tion, or by any means , wholly or partly traceable to any property referred to in clauses ( i) to ( iii ) or the income or earnings from such property;
and includes--
(A) any property held by such person which would have been, in relation to any previous holder thereof, illegally acquir- ed property under this clause if such previous holder had not SEC. 1 ]
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ceased to hold it, unless such person or any other person who held the property at any time after such previous holder or, as the case may be, the last of such previous holders is or was a transferee in good faith for adequate consideration;
(B) any property acquired by such person , whether before or after the commencement of this Ordinance , for a consideration , or by any means , wholly or partly traceable to any property fall- ing under item (A) , or the income or earnings therefrom;
(d ) " prescribed " means prescribed by rules made under this Ordinance;
(e) " property" includes any interest in property , movable or im- movable .
4. (1) As from the commencement of this Ordinance , it shall not be lawful for any person to whom this Ordinance applies to hold any illegal ly acquired property either by himself or through any other person on his behalf .
Prohibi- tion of holding illegally acquired property.
(2) Where any person holds any illegally acquired property in contra- vention of the provisions of sub - section ( 1 ) , such property shall be liable to be forfeited to the Central Government in accordance with the provi- sions of this Ordinance .
Competent authority.
5. ( 1 ) The Central Government may , by order published in the Offi- cial Gazette, authorise as many officers of the Central Government (not below the rank of a Joint Secretary to the Government ) , as it thinks fit , to perform the functions of the competent authority under this Ordinance .
(2) The competent authorities shall perform their functions in respect of such persons or classes of persons as the Central Government may, by order, direct .
6. If the competent authority , having regard to the value of the pro Notice perties held by any person to whom this Ordinance applies , either by of himself or through any other person on his behalf, his known sources of for- income, earnings or assets , and any other information or material avail. feiture. able to it as a result of action taken under section 18 or otherwise , has reason to believe ( the reasons for such belief to be recorded in writing) that all or any of such properties are illegally acquired properties , 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 show cause , indicating the sources of his income , 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 , why all or any of such properties , as the case may be, should not be declared to be illegally acquired properties and forfeited to the Central Govern- ment under this Ordinance .
7. (1 ) The competent authority may , after considering the explana- tion, if any, to the show- cause notice issued under section 6, and the of pro- materials available before it and after giving to the person affected a perty in reasonable opportunity of being heard, by order, record a finding whe- certain
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ther all or any of the properties in question are illegally acquired properties .
(2) Where the competent authority is satisfied that some of the pro- perties referred to in the show - cause notice are illegally acquired pro- perties but is not able to identify specifically such properties , then , it shall be lawful for the competent authority 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 sec- tion to the effect that any property is illegally acquired property , it shall declare that such property shall , subject to the provisions of this Ordinance , stand forfeited to the Central Government free from all en- cumbrances .
1 of 1956 .
( 4) Where any shares in a company stand forfeited to the Central Government under this Ordinance , then , the company shall , notwith- standing anything contained in the Companies Act , 1956 , or the articles of the company , forthwith register the Central Government as the transferee of such shares .
Burden of proof.
8. In any proceedings under this Ordinance , 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 .
Fine in lieu of for- feiture.
9. ( 1) Where the competent authority makes a declaration that any property stands forfeited to the Central Government under section 7 and it is a case where the source of only a part, being less than one-half, of the income, earnings or assets with which such property was acquired has not been proved to the satisfaction of the competent authority, it shall make an order giving an option to the person affected to pay, in lieu of forfeiture, a fine equal to one and one- fifth times the value of such part.
Explanation. For the purposes of this sub - section , the value of any part of income , earnings or assets , with which any property has been acquired , shall be,-
(a) in the case of any part of income or earnings , the amount of such part of income or earnings:
(b) in the case of any part of assets, the proportionate part of the full value of the consideration for the acquisition of such assets.
( 2) Before making an order imposing a fine under sub -section ( 1 ) , the person affected shall be given a reasonable opportunity to be heard.
(3) Where the person affected pays the fine due under sub - section ( 1) , within such time as may be allowed in that behalf, the competent autho- rity may, by order , revoke the declaration of forfeiture under section 7 and thereupon such property shall stand released to the person affected .
10. In the case of any person referred to in clause ( vi ) of Explanation 3to sub -section (2 ) of section 2, if the competent authority , on the basis of the information and materials available to it , has reason to believe (the reasons for such belief to be recorded in writing ) that any property held in trust is illegally acquired property , it may serve a notice upon the author of the trust or, as the case may be, the contributor of the Procedure in relation to certain properties , trust SEC. 1 ]
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assets out of or by means of which such property was acquired by the trust, and the trustees , calling upon them within such time as may be specified in the notice which shall not ordinarily be less than thirty days , to explain the source of the money or other assets out of which such property was acquired or , as the case may be , the source of the money or other assets which were contributed to the trust for acquiring such property and thereupon such notice shall be deemed to be a notice served under section 6 and all the other provisions of this Ordinance shall apply accordingly.
Explanation . For the purposes of this section " illegally acquired pro- perty" , in relation to any property held in trust , includes-
(i) any property which if it had continued to be held by the author of the trust or the contributor of such property to the trust would have been illegally acquired property ;
( ii ) any property acquired by the trust out of any contributions made by any person which would have been illegally acquired pro- perty had such person acquired such property out of such contribu- tions.
Certain transfers to be null and void.
11. 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 means whatsoever and 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.
Consti- tution of Appellate Tribunal .
12. ( 1 ) The Central Government may, by notification in the Official Gazette, constitute an Appellate Tribunal to be called the Appellate Tribunal for Forfeited Property consisting of a Chairman referred to in sub - section ( 2 ) and such number of other members ( being officers of the Central Government not below the rank of a Joint Secretary to the Government) as the Central Government thinks fit , to be appointed by that Government for hearing appeals against the orders made under section 7 , sub- section ( 1) of section 9 or section 10.
(2) The Chairman of the Appellate Tribunal shall be a person who is or has been or is qualified to be a Judge of the Supreme Court or of a High Court .
(3) The terms and conditions of service of the Chairman and other members shall be such as may be prescribed .
(4) Any person aggrieved by an order of the competent authority made under section 7, sub - section ( 1) of section 9 or section 10 , may, within forty - five days from the date on which the order is served on him, prefer an appeal to the Appellate Tribunal:
Provided that the Appellate Tribunal may entertain any appeal after the said period of forty-five days , but not after sixty days , from the date aforesaid if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time .
(5) On receipt of an appeal under sub - section (4 ) , the Appellate Tribu- nal may , after giving an opportunity to the appellant to be heard, if he so desires , and after making such further enquiry as it deems fit , confirm, modify or set aside the order appealed against .
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(6) The powers and functions of the Appellate Tribunal may be exer- cised and discharged by Benches consisting of three members and constituted by the Chairman of the Appellate Tribunal.
(7) The Appellate Tribunal may regulate its own procedure .
13. No notice issued or served , no declaration made, and no order passed , under this Ordinance shall be deemed to be invalid by reason of any error in the description of the property or person mentioned there- in if such property or person is identifiable from the description so mentioned .
Notice or order not to be invalid for error in descrip- tion,
Bar of durisdic. tion,
14. No order passed or declaration made under this Ordinance shall be appealable except as provided therein and no civil court shall have jurisdiction in respect of any matter which the Appellate Tribunal or any competent authority is empowered by or under this Ordinance to determine, and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Ordinance .
5 of 1908 .
15. The competent authority and the Appellate Tribunal shall have all the powers of a civil court while trying a suit under the Code of Civil Procedure , 1908, in respect of the following matters, namely:-
(a) summoning and enforcing the attendance of any person and examining him on oath;
(b ) requiring the discovery and production of documents ;
Competent authority Appellate and Tribunal to have powers of civil court.
(c) receiving evidence on affidavits ;
(d) requisitioning any public record or copy thereof from any court or office;
(e) issuing commissions for examination of witnesses or docu- ments;
(f) any other matter which may be prescribed .
Informa- tion to competent authority.
16. ( 1) Notwithstanding anything contained in any other law , the competent authority shall have power to require any officer or authority of the Central Government or a State Government or a local authority to furnish information in relation to such persons , points or matters as in the opinion of the competent authority will be useful for, or relevant to, the purposes of this Ordinance.
46 of 1973 .
(2) Any officer of the Income - tax Department , the Customs Depart- ment or the Central Excise Department or any officer of enforcement appointed under the Foreign Exchange Regulation Act , 1973 , may furnish suo motu any information available with him to the competent authority if in the opinion of the officer such information will be useful to the competent authority for the purposes of this Ordinance .
Sac. 1 ]
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17. For the purposes of any proceedings under this Ordinance , the following officers are hereby empowered and required to assist the com- petent authority and the Appellate Tribunal , namely:--
(a) officers of the Customs Department;
(b) officers of the Central Excise Department;
Certain officers to assist competent authority and Appellate Tribunal,
(c) officers of the Income- tax Department;
46 of 1973,
(d) officers of enforcement appointed under the Foreign Exchange Regulation Act , 1973 ;
(e) officers of police;
(f) such other officers of the Central or State Government as are specified by the Central Government in this behalf by notification in the Official Gazette.
18. ( 1) For the purposes of any proceedings under this Ordinance or the initiation of any such proceedings , the competent authority shall have power to cause to be conducted any inquiry, investigation or survey in respect of any person , place, property , assets , documents , books of account or any other relevant matters .
Power of competent authority to require certain officersto exercise certain ( 2) For the purposes referred to in sub - section ( 1 ) , the competent authority may, having regard to the nature of the inquiry , investigation or survey , require an officer of the Income- tax Department to conduct or powers. cause to be conducted such inquiry , investigation or survey .
43 of 1961 .
(3) Any officer of the Income - tax Department who is conducting or is causing to be conducted any inquiry, investigation or survey required to be conducted under sub - section ( 2 ) , may, for the purpose of such inquiry , investigation or survey, exercise any power ( including the power to authorise the exercise of any power ) which may be exercised by him for any purpose under the Income- tax Act , 1961 , and the provisions of that Act shall , so far as may be , apply accordingly .
sion. Power to take posses- 19. (1 ) Where any property has been declared to be forfeited to the Central Government under this Ordinance , or where the person affected has failed to pay the fine due under sub - section ( 1 ) of section 9 within the time allowed therefor under sub- section ( 3 ) of that section , the competent authority may order the person affected as well as any other person who may be in possession of the property to surrender or deliver possession thereof to the competent authority or to any person duly authorised by it in this behalf within thirty days of the service of the order.
(2) If any person refuses or fails to comply with an order made under sub - section ( 1 ) , the competent authority may take possession of the property and may for that purpose use such force as may be necessary.
(3) Notwithstanding anything contained in sub - section (2 ), the com- petent authority may for the purpose of taking possession of any property referred to in sub-section ( 1 ) , requisition the service of any police officer to assist the competent authority and it shall be the duty of such officer to comply with such requisition .
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Rectifica- tion of mistakes .
20. With a view to rectifying any mistakes apparent from record, the competent authority or the Appellate Tribunal, as the case may be , may amend any order made by it within a period of one year from the date of the order:
Provided that if any such amendment is likely to affect any person prejudicially, it shall not be made without giving to such person a reasonable opportunity of being heard.
21. No finding of any officer or authority under any other law shall be conclusive for the purposes of any proceedings under this Ordinance .
Findings under other laws not con- clusive for pro- ceedings under this Ordi- nance .
22. Any notice or order issued or made under this Ordinance shall be served-
Service of notices and orders.
(a) by tendering the notice or order or sending It by registered post to the person for whom it is intended or to his agent;
(b) if the notice or order cannot be served in the manner pro- vided in clause ( a) , by affixing it on a conspicuous place in the property in relation to which the notice or order is issued or made. or on some conspicuous part of the premises in which the person for whom it is intended is known to have last resided or carried on business or personally worked for gain.
23. No suit, prosecution or other proceeding shall lie against the Central Government or any officer of the Central or State Government for anything which is done , or intended to be done, in good faith , in pursuance of this Ordinance or the rules made thereunder.
Protec. tion of action taken in good faith.
24. The provisions of this Ordinance shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force .
Ordinance to have over- riding effect.
25. ( 1 ) The Central Government may, by notification in the Official Gazette, make rules to carry out the provisions of this Ordinance .
Power to make rules.
(2) In particular and without prejudice to the generality of the foregoing power , such rules may provide for all or any of the following matters , namely : -
(a) the terms and conditions of service of the Chairman and other members of the Appellate Tribunal under sub-section ( 3) of section 12;
(b) the powers of a civil court that may be exercised by the competent authority and the Appellate Tribunal under clause ( f) of section 15;
(c) any other matter which has to be , or may be, prescribed.
SEC. 1]
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(3) Every rule made under this Ordinance shall be laid , as soon as may be after it is made , before each House of Parliament , while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule , or both Houses agree that the rule should not be made , the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be ; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule .
FAKHRUDDIN ALI AHMED , President .
K. K. SUNDARAM, Secy. to the Govt . of India.
PRINTED BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS , MINTO ROAD , NEW DELHI AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS , DELHI , 1975