Dilsher Singh vs Union of India

Hemant Gupta, J.—The challenge in the present writ petition is to the order dated May 08, 2008, Annexure P4, whereby competent

authority under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (for short ""SAFEM (FOP) Act""), has

directed the State of Punjab to take over possession of forfeited properties of the offenders under the Conservation of Foreign Exchange and

Prevention of Smuggling Activities Act, 1974 (for short ""COFEPOSA Act"") and SAFEM (FOP) Act.

The petitioners or their predecessorsininterest have purchased land through separate sale deeds from Amolak Singh, Raghbir Singh sons of

Mehain Singh; Gurmej Kaur w/o Mehain Singh, Narinder Kaur d/o Mehain Singh and Inderbir Kaur d/o Kashmir Singh, all heirs of Mehain Singh.

Mehain Singh died in the year 1981. The sales were completed between June 04, 2001 to December 18, 2001. The petitioners have averred that

they have purchased the land in good faith and after ascertaining the ownership of their vendors and their power to transfer the same to the

petitioners. As per revenue record, the land was free from encumbrances. Even mutations were duly entered and sanctioned on behalf of the

vendors and the office of Sub Registrar does not reflect any charge/lien/encumbrances over the said property. Thus, the petitioners have acted in a

diligent manner and carried out the enquiry like an ordinary prudent man before purchasing the said land vide registered sale deeds.

It is pointed out that the petitioners were enjoying the possession of the land from the date of purchase but it was later on found that the land is

under confiscation under the aforesaid Acts. Such information came to their knowledge in May, 2008 when they received a communication dated

May 08, 2008 issued by respondents No.2 and 3. The petitioners have attached Annexure P6, which is a list of cases as on 01.05.2008 in which

order of forfeiture has been passed and the Government of Punjab is to take possession of the properties mentioned therein. As per such

Annexure, 1/4th share in the property bearing Municipal No. 1376/116 situated inside Ram Bagh Gate, Amritsar; 1/4th share in residential house

situated in village Mulluwal, Tehsil Tarn Taran, District Amritsar; residential house in village Bhakna, Tehsil Tarn Taran, District Amritsar; and 1/4

share of agricultural land bearing Khasra/Khatauni No. 96, 153, 175, 192, 1201 (190 Kanals 10 Marlas) in village Nathupura, District Amritsar,

was forfeited vide order dated 29.03.1996 as legal heir of Mehain Singh. 1/2 share of agricultural land measuring 187 Kanals 5 Marlas and 179

Kanals 9 Marlas in village Larhi Brahma, Tehsil Pathankot, falling to the share of Amolak Singh self was also forfeited vide order dated

29.03.1996.

It is alleged by the respondents that Mehain Singh was detained under COFEPOSA Act vide order dated 19.12.1974 and proceedings under

SAFEM (FOP) Act regarding forfeiture of the property were initiated on 04.11.1977 and order of forfeiture was passed on 29.03.1996 after the

constitutional validity of SAFEM (FOP) Act was upheld by the Supreme Court. The appeal before the learned Appellate Tribunal ( Forfeiture of

Property ) was dismissed on 20.11.1996. An order was issued under section 19(1) of SAFEM (FOP) Act to hand over the properties to the

District Magistrate. It has been pointed out that Amolak Singh and Gurmej Kaur challenged the order passed under SAFEM (FOP) Act before

the Delhi High Court in CWP Nos. 316 and 323 of 1997 respectively. Initially, Delhi High Court stayed dispossession from the property vide

order dated 27.01.1997 but the writ petition was dismissed on 28.04.2003. Even review application was dismissed on 24.09.2003. It has been

pointed out that the property in issue has been sold by the legal heirs of late Mehain Singh during the pendency of legal proceedings and hence the

transfer is null and void. Thus, the sale in favour of the petitioners or their predecessorsininterest after the order of forfeiture is null and void and

does not confer any title in favour of the petitioners.

Learned counsel for the petitioners has vehemently argued that the petitioners are bona fide purchasers for value and consideration and the

property is required to be forfeited only if the property in the name of a person who has been convicted under the specified provisions of law, their

relatives, associates and confidants. The sale in favour of the petitioners, which is a transfer in good faith and for adequate consideration, is

protected under section 2(e) of SAFEM (FOP) Act. The relevant provisions of the said law read as under :

The Smugglers And Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976.

An Act to provide for the forfeiture of illegally acquired properties of smugglers and foreign exchange manipulators and for matters connected

therewith or incidental thereto.

xx xxx xxx xxxx xxxx

AND WHEREAS 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;

xxx xxx xxxx x xxx xxxx

Application : (1) The provisions of this Act shall apply only to the persons specified in subsection (2).

(2) The persons referred to in subsection (1) are the following, namely :

(a) to (d) xxxx xxxxx xxxx xxxx

(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 property after such person and

before the present holder, is or was a transferee in good faith for adequate consideration.

xxxx xxxx xxxx xxxx xxxxx

Certain transfers to be null and void 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 mode whatsoever such transfer shall, for the purposes of the proceedings under this Act, be ignored and if 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"".

The sole argument of learned counsel for the petitioners is based upon the fact that since in the revenue record, the order of forfeiture was not

reflected, the petitioners are to be treated as bona fide purchasers as there was no other means for the petitioners to verify the title of their vendors.

It is contended that in terms of Section 31 of the Punjab Land Revenue Act, 1887 ( for short ""the Act"") any change in the transfer of ownership

is required to be recorded in the revenue record and that in terms of Section 44 of the Act, there is presumption of correctness attached to the

revenue record. Therefore, the petitioners being bona fide purchasers cannot be dispossessed in terms of the order of forfeiture passed under

SAFEM (FOP) Act against the vendors of the petitioners.

We do not find any merit in the argument raised by learned counsel for the petitioners. Section 2(e) of SAFEM (FOP) Act would come to the

rescue of the holder of the property before the order of forfeiture is passed. Once the order of forfeiture was passed under the SAFEM (FOP)

Act, the sale by the vendors of the petitioners was without any title to such property. The vendors of the petitioners could not convey a better title

than what they themselves had. On the date of sale, the vendors of the petitioners had no title as their title stood forfeited in the year 1996 itself.

The petitioners have purchased the property in the year 2001 and, therefore, keeping in view the principle of nemo dat quad non habet i.e., no one

can convey a better title than what he had, the petitioners cannot be said to have acquired a valid title since the vendors of the petitioners did not

have any title in the property. As a matter of fact, the petitioners have purchased the property during the challenge to the order of forfeiture by way

of writ petition before the Delhi High Court. The sale in favour of the petitioners is subject to the doctrine of lis pendence as well. Once the writ

petition in respect of the property purchased stands dismissed, the petitioners cannot be said to have acquired any valid title or interest in the

property forfeited vide order dated 29.03.1996. This is the import of section 11 of the SAFEM (FOP) Act.

The argument that in the absence of entries in the revenue record, the petitioners should be treated as bona fide purchasers for value and

consideration is again misconceived. The provisions of Section 31 of the Act are directory in nature. The entries in the revenue record are required

to be maintained for fiscal purposes so as to collect the land revenue. The revenue record is not the document of title. Therefore, even in the

absence of entries in the revenue record, the petitioners cannot claim themselves to be bona fide purchasers. Since the property already stood

forfeited and the petitioners having purchased the property during the pendency of the writ petition which remained unsuccessful, no valid title

accrues to the petitioners on the plea of bona fide purchasers. The only remedy of the petitioners, if so advised, is to claim sale consideration from

their vendors in accordance with law.

In view of the above, we do not find any merit in the present writ petition. The same is hereby dismissed.