http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 10  

PETITIONER: AMENABAI TAYEBALY & ORS.

       Vs.

RESPONDENT: COMPETENT AUTHORITYUNDER SAFEMA & ORS.

DATE OF JUDGMENT:       19/11/1997

BENCH: S.B. MAJMUDAR, M. JAGANNADHA RAO

ACT:

HEADNOTE:

JUDGMENT:                THE 19TH DAY OF NOVEMBER, 1997 Present              Hon’ble Mr. Justice S.B. Majmudar              Hon’ble Mr. Justice M. Jagannadha Rao R.F. Nariman,  Sr. Adv.,  Mrs. M. Karanjawala, Adv. with him for the appellants K.N. Shukla,  Sr.Adv.,  T.C.Sharma,  S.Rajappa,  S.N.Terdol, A.P. Mayee  and A.M.  Khanwilkar, Advs.  with  him  for  the Respondents                 J U D G M E N T/ O R D E R S      The following Judgment of the Court was delivered: S.B. Majmudar J.      This  appeal   by  special  leave  seeks  to  challenge judgment and  order rendered  by a  Division  Bench  of  the Bombay High  Court in Writ Petition No.2841 of 1982.  By the impugned  judgment  the  order  of  respondent  -  competent authority forfeiting  the property  in  question  under  the Smugglers and  Foreign Exchange  Manipulators (Forfeiture of Property) Act,  1976 (hereinafter  referred to  as ’SAFEMA’) came to be confirmed.      In Order  to appreciate the grievance of the appellants it is necessary to note a few introductory facts.      Introductory Facts.      One Talab  Haji Hussein  Sumbhania was detained Foreign Exchange and  Prevention of  Smuggling Activities  Act, 1974 (hereinafter referred to as ’COFEPOSA’) by the Government of Gujarat by  order dated  02nd April  1976.   Before the said order of  detention, the  second wife  of  said  Talab  Haji Hussein, Tahira  Sultana, purchased  a flat being Flat No.25 in  Dharam   Jyoti  Premises  Cooperative  Housing  Society, Bandra, Bombay  in February  1979 for a consideration of Rs. 88,562/-.   On 15th  February 1977  the competent  authority issued a  notice under  Section 6(1)  of SAFEMA  to the said Tahira Sultana  calling upon  her to show cause why the said flat purchased  upon her  to show  cause why  the said  flat purchased in  her name  should not be forfeited as illegally acquired property  of the  COFEPOSA detenu, her husband, the aforesaid Talab  Haji Hussein.   After  hearing said  Tahira Sultana the competent authority passed an order Section 7 of the SAFEMA  on 12th  October  1977  holding  that  the  said

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 10  

property was  illegally acquired property and, therefore, it stood forfeited  to the  Central Government  free  from  all encumbrances as  laid down  under Section  7(3)  of  SAFEMA. Said  Tahira  Sultana  challenged  the  aforesaid  order  of forfeiture by  filing a  Misc.   Petition No.1680 of 1977 on the Original  Side of  the Bombay  High court.   In the writ petition she  challenged both  the order of detention of her husband as  well as  the order  of forfeiture  of  the  said property standing  in her  name.  The said writ petition was moved in  December 1977.   The  High Court of her husband as well as  the  order  of  forfeiture  of  the  said  property standing in  her name.   The said writ petition was moved in December 1977.   The  High Court of Bombay admitted the said writ petition  of Tahira  Sultana on  03rd  March  1978  and stayed the  order of  forfeiture of  the said property on an undertaking by her that she would not dispose of or alienate or encumber  or part  with the  right, title and interest in the said  flat  pending  the  final  disposal  of  the  writ petition.      Simultaneously she  moved the  Appellate Tribunal under the SAFEMA  challenging  the  order  of  forfeiture  of  her property.   The Appellate Authority dismissed her appeal and confirmed the  order of  forfeiture by  its order dated 25th July 1978.   By  amendment to  her writ  petition  she  also challenged the  latter order.   In  the  meantime  the  writ petition filed  by her before the Bombay High Court remained pending.   On 20th  November 1980 COFEPOSA detenu Talab Haji Hussein expired.      Now comes the crucial date when the present appellants’ predecessor came in picture.  By a Sale Deed dated 30th July 1981 Tahira  Sultana  sold  the  said  flat  to  Tayab  Ali, predecessor-in-interest of  the  present  appellants  for  a consideration of Rs. 3,60,000/-.  We will refer to Tayab Ali as the  purchaser of  this flat. It is obvious that the said sale was  in breach  of the  undertaking given by the vendor Tahira Sultana  to the  Bombay High Court and it was pending the disposal  of the  writ petition  challenging  the  order forfeiting the very same property as passed by the competent authority years  back on  12th October 1977 and as confirmed by the Appellate Tribunal on 25th July 1978.  It is the case of the purchaser that he had purchased the said flat in good faith for  valuable consideration  since he was not aware of the order  of the  competent authority  or his vendor Tahira Sultana’s undertaking  to  the  High  Court.    Said  Tahira Sultana out  of the consideration money received by her from the purchaser  in the aforesaid transaction amounting to Rs. 3,60,000/- is said to have purchased a flat a Shivasthan Co- operative Society,  Bandra, Bombay, for Rs. 1,86,000/-.  The case of  the appellants  is that  towards the  said purchase consideration Rs.1,60,000/- were utilised by the said Tahira Sultana from  the sale  proceeds which she received from the purchaser of  Dharam Jyoti  flat,  namely,  the  appellants’ predecessor-in-interest.     The  on   05th  November  1982, according to  the appellants,  the purchaser  for the  first time got  information from the Society in whose building the flat was situated, about the order of forfeiture of the said flat and  the undertaking  given by  the purchaser’s  vendor Tahira Sultana  before the Bombay High Court.  That resulted in a  Writ Petition  No. 2841 of 1982 filed by the purchaser Tayab Ali  on 13th  December 1982  in the Bombay High Court. the said writ petition was admitted on 16th December 1982 by the High  Court  and  interim  relief  was  granted  to  the purchaser.   When it was brought to the notice of the Bombay High  Court  that  purchaser’s  vendor  Tahira  Sultana  had committed breach  of the  undertaking given  by her  in  her

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 10  

pending writ  petition against  the forfeiture  order of the flat in  Dharam Jyoti  Building, the  High  Court  initiated contempt  of  court  proceedings  against  the  said  Tahira Sultana and  by an  order dated  21st February 1983 held her guilty  of   contempt  and   imposed  punishment  of  simple imprisonment for  four weeks  and a  fine of  Rs. 2,000/- on said Tahira  Sultana.   She  underwent  the  said  sentence. Tahira Sultana  on her  part filed  Writ Petition  No.100 of 1984 on  the Criminal Side of Bombay High Court in 184 again challenging the  detention order  and order of forfeiture of property,  while   the  appellants’  predecessor-in-interest Tayab Ali,  the purchaser of the flat in question, moved the High Court  of Gujarat  on 12th  August 1985 challenging the detention order  of the  COFEPOSA detenu  Talab Haji Hussein which gave  rise to  the proceedings under SAFEMA as sell as consequential  order   under  SAFEMA   since  the  order  of detention was  issued by the State of Gujarat.  The Division Bench of  the High  Court of  Gujarat by  its judgment dated 17th July 1986 held that the order of forfeiture of property was passed  by the  competent authority  without hearing the purchaser of  the property  and hence  the proceedings  were required to be decided afresh after giving an opportunity of hearing  to  the  said  purchaser.    Pending  the  remanded proceedings the purchaser Tayab Ali expired on 24th December 1986 leaving  present appellants  as  his  heirs  and  legal representatives.  Pursuant to the order of the High Court of Gujarat the  competent authority functioning under SAFEMA by order dated  17th March  1987 after  hearing the purchaser’s heirs, namely, the present appellants re-confirmed the order of forfeiture  of the  flat purchased  by their predecessor, under  SAFEMA.     Independent   of  these  proceedings  the competent authority  also passed  an order on 18th June 1987 under Section  7(2) of SAFEMA, after hearing Tahira Sultana, forfeiting the second flat purchased by her being Flat No.1, Ground Floor,  shivasthan Co-operative Housing Society Ltd., Bandra, Bombay.   It  was held by the competent authority in the  said   proceedings  that   Flat  No.1,   Ground  Floor, Shivasthan  Co-operative  Housing  Society  Ltd.,  had  been acquired by  said Tahira  Sultana partly  out  of  the  sale proceeds of  Flat No.25,  Dharam Jyoti  Building, Pali Hill, Bandra, Bombay,  which was held to be illegally acquired and was forfeited  to the  central Government by an order passed on 12th  October 1977.   As  a consequence  of this order of 18th June  1987 it  was directed  by the competent authority under  section   19(1)  of   SAFEMA  that  said  Flat  No.1, Shivasthan Society, was illegally acquired by Tahira Sultana and directed  her  to  deliver  possession  thereof  to  the central Government authorities.  Tahira Sultana filed appeal against the said order in connection with forfeiture of Flat No.1,  Shivasthan   Society,  which  was  dismissed  by  the Appellate Tribunal  on 02nd  November 1987.   Tahira Sultana unsuccessfully challenged  the said order in proceedings for setting aside  the  ex  parte  order  before  the  Appellate Tribunal.    The  said  application  was  dismissed  by  the Tribunal.   She filed  Writ Petition No. 1527 of 1995 before the Bombay  High Court  challenging the  order of  Appellate Tribunal  passed   on  18th   April  1995   dismissing   her application for  setting aside  the ex  parte order  of  the Appellate Tribunal.   Her writ petition was dismissed by the Bombay High Court on 21st August 1995.  The authorities took possession of  Flat No.1,  Shivasthan Society,  from  Tahira Sultana on  13th September  1995.   She filed  Special Leave Petition before  this Court  challenging the  order  of  the Bombay  High  Court  pertaining  to  Flat  No.1,  Shivasthan Society, Bombay.  It was  dismissed by  this Court  on  24th

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 10  

November 1995.   Therefore  the  forfeiture  of  Flat  No.1, Shivasthan Society,  became final  upto  this  Court.    The appellants, who were brought on record as heirs of purchaser in the  latter’s Writ  Petition  No,  2841  of  1982,  which challenged the  forfeiture of  the said  Flat No.25,  Dharam Jyoti Building,  and the  direction to  them  to  hand  over possession ultimately  came to  be dismissed  by a  Division Bench of  the High  Court of  Bombay by  an order dated 29th June 1995  and that  is how  the appellants  are  before  us Tahira  Sultana’s  Misc.    Petition  No.1680  of  1977  was withdrawn by her before the Bombay High Court with a view to challenging the  appellate order  confirming  the  order  of forfeiture.   She accordingly filed subsequent Writ Petition No.1527 of  1995 which was rejected by the Bombay High Court on 21st  August 1995.   The  said  decision  was  challenged before this  Court in S.L.P. (C) No. 25358 of 1995 which was dismissed by this Court on 24th November 1995.      It is in the background of the aforesaid facts that the main contentions canvassed in support of this appeal have to be examined.      Learned senior  counsel, Shri  R.F.  Nariman,  for  the appellants firstly  contended that  SAFEMA  itself  did  not apply to  the purchase  made by  the purchaser as he was not one of  the persons  mentioned in  Section  2(2)  of  SAFEMA especially Section  2(2)(e) thereof  and, therefore,  entire proceedings  against  him  were  null  and  void.    It  was alternatively contended  that in  any view of the matter the original purchaser  Tayab Ali  was a bona fide purchaser for value without  notice and he was, therefore, not responsible for the  acts of commission on the part of his vendor Tahira Sultana.   That even  if she  might have committed breach of the undertaking  given to the High Court of Bombay for which she was  adequately punished the purchaser cannot be visited with any adverse consequences thereof  It was next contended that Section  11 of  SAFEMA would  not apply to the facts of the present  case as the appellants’ predecessor-in-interest had not  purchased the flat in Dharam Jyoti Building between two terminal  dates, namely,  15th February 1977 when notice under Section  6(1) of  SAFEMA was  issued to Tahira Sultana and 12th  October 1977  when  the  order  of  the  competent authority under  section 7  of SAFEMA  was passed.   On  the other had  he had  purchased the property on 30th July 1981. Therefore on  the express  language of  section  11  of  the SAFEMA the said transaction could not be said to be null and void.   It was  next contended  that even  proceeding on the basis  that   Dharam  Jyoti  Building  flat  was  originally purchased by  Tahira Sultana  for  a  consideration  of  Rs. 88,562/- by  utilising the  tainted money  of  her  husband, Talab Haji Hussein, who was a COFEPOSA detenu, once she sold the said  property to the purchaser by taking Rs. 3,60,000/- spent Rs.1,60,000/-  for purchasing Shivasthan Society flat, the tainted  money which  were converted into flat in Dharam Jyoti were  again re-converted  into cash  and were utilised for purchasing  another immovable  property.  Therefore, the tainted money  could be  traced out  to the said property in Shivasthan Society  and could  be said  to  have  ultimately resulted in  purchase of  Shivasthan  Society  property  and which now  is likely  to fetch  Rs. 65 lac, as seen from the auction notice  dated 24th July 1996.  Hence the purchaser’s transaction may  not be  treated to be a void transaction as it  wold   amount  to  double  forfeiture  of  the  original smuggler’s property.   It  was lastly  contended that in any case looking  to  the  equities  of  the  case  and  as  the purchaser was a bona fide purchaser for value without notice he may  not be  visited with  the evil  consequences of  the

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 10  

transaction wherein  only the  vendor Tahira  Sultana was at fault and  consequently on  an analogy  of Section  9 of the SAFEMA this  Court may  impose appropriate  fine in  lieu of forfeiture.      Learned senior  counsel for  the respondents, Shri K.N. Shukla, on  the   hand, supported  the decision  of the High Court.      In view  of the aforesaid contentions of learned senior counsel  Shri   Nariman,  the  following  points  arise  for determination ; 1.   Whether the  provisions of  SAFEMA apply  to  the  sale      transaction entered  into between  the widow  of  Talab      Haji   Hussein,    COFEPOSA   detenu   and   purchaser,      predecessor-in-interest of the appellants. 2.   Whether the  purchaser was  a bona  fide purchaser  for      value without notice. 3.   Whether the  forfeiture of  purchaser’s Flat  in Dharam      Jyoti Building  by the  authorities can  be treated  as      double forfeiture  on the  basis of  the  same  tainted      money  of   the  COFEPOSA   convict  only  because  the      subsequent property purchased by the purchaser’s vendor      in  Shivasthan   Co-operative  Society  has  also  been      forfeited to the Government under SAFEMA. 4.   Whether the  transaction in  favour  of  the  purchaser      could be  cleared on  principles analogous to Section 9      of the SAFEMA by imposing fine in lieu of forfeiture on      the peculiar facts of this case.      We shall  deal  with  these  points  for  consideration seriatim.      Point Nos.1 and 2      It is  true that the SAFEMA has been enacted to provide for the  forfeiture  of  illegally  acquired  properties  of smugglers and  foreign exchange manipulators and for matters connected therewith  or incidental thereto,  It is also true that Section  2 sub-section (1) of the SAFEMA lays down that ’the provisions  of this act shall apply only to the persons specified in  sub-section (2)’.  When we turn to sub-section (2) of  Section 2  we find list of persons mentioned therein at clauses  (a) to  (e).   In section 2 sub-section 2(a) and (b() are mentioned persons who are themselves detenues under the Act.   Clause  (c) refers  to  every  person  who  is  a relative of  a person  referred to  in clause  (a) or clause (b); Clause  (d) refers  to  every  associate  of  a  person referred to  in clause  (a) or  clause (b); while clause (e) refers to  any 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.   It  is  obvious  that  purchaser’s vendor (2)(c)  as she  was the  wife of  the COFEPOSA detenu Talab  Haji   Hussein.    Property  standing  in  her  name, therefore, could  be processed  under the  provisions of the SAFEMA.   It is  true that a purchase from a relative of the COFEPOSA detenu  would not  be covered  by  Section  2  sub- section (e).   Accordingly the purchaser Tayab Ali cannot be covered by Section 2(2)(e) of SAFEMA.  However difficulty in his case arises independently of the provisions of Section 2 sub-section  (2)(e)  as  well  will  presently  show.    The property in  question at the relevant time stood in the name of purchaser’s  vendor Tahira  Sultana.    As  she  was  the relative of  the COFEPOSA detenu, her husband, the competent authority issued  a notice  to her  under  Section  6(1)  of SAFEMA in  connection with  Dharam Jyoti  Building flat, the dispute property  herein.   After hearing her, the competent

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 10  

authority  passed   an  order  under  Section  7  of  SAFEMA forfeiting the  said property  on 12th  October 1977.  Of is this order  which was  challenged by  her in the Bombay High Court.  She had undertaken not to alienate the said property and still  in flagrant  breach thereof she sold the property in 1981  to purchaser  Tayab Ali.   Apart from the fact that the said  transaction had  exposed purchaser’s vendor Tahira Sultana to  contempt proceedings  and she  was punished, the question survives  whether the  purchaser  Tayab  Ali  could derive any  benefit out of the said tainted transaction.  It is, of course, true that pending the writ petition there was already a  stay order  of the  High Court of Bombay by which the order  of forfeiture  of the  said property had remained stayed.   But  it  was  not  an  absolute  order.    It  was conditional on  the purchaser’s  vendor Tahira  Sultana, the writ petitioner,  not transferring  or alienating  the  said property pending  the proceedings.   The  said injunction of the High  Court  reflected  by  the  undertaking  of  Tahira Sultana made  the said property inalienable pending the writ petition proceedings  moved by purchaser’s vendor before the High Court.   Under  these circumstances even though Section 52 of  the Transfer  of Property Act, strictly speaking, may not apply  as the  lis  was  not  registered  in  Bombay  as informed to  us, the  prohibition against alienation of this property,  by   way  of   undertaking  of   purchaser’s  own predecessor-in-title before the High Court had its full sway and operation.   Therefore,  if ultimately the writ petition was dismissed  the transfer  effected by the writ petitioner in breach  of the  prohibition and the undertaking would not give any benefit to the purchaser.  It would be too much for him to  contend that  he was a bona fide purchaser for value without notice.  The High Court in the impugned judgment has noted that the said plea does not appear to be probable.  It is true,  as pointed  out by  learned  senior  counsel  Shri Nariman for  the appellants, that for coming to this finding the High  Court has wrongly assumed that the purchaser Tayab Ali had  immediately filed  a writ petition after purchasing the property  as he had filed his writ petition only on 13th December 1982  when he  had  received  information  on  05th November  1982   that  the  flat  in  question  was  already forfeited by  Government.   That may  be  so,  However,  the ultimate finding of the High Court in this connection cannot be faulted  on the  touchstone of  probabilities.  Reason is obvious.   The COFEPOSA  detenu Talab  Haji  Hussein  was  a smuggler.   When  the  purchaser  purchased  the  said  flat standing in  the name  of the  wife of the said smuggler, in usual course  of conduct  the said  purchaser must have been put on  enquiry as  to how  COFEPOSA  detenu’s  wife  Tahira Sultana became  the owner  of this  property  and  what  had happened to  this property  in the  proceedings under SAFEMA and whether  title of  the said  flat was  clear or not.  No such enquiry  seems to have been made and it is not the case of the  purchaser that  any such  enquiry was made by him at the relevant  time when he entered into the said transaction pending the writ petition in the Bombay High Court.  Thus on broad probabilities  of  the  case  it  must  be  held  that purchaser willingly  and with open eyes played with fire and purchased litigation  and it is too tall a claim on his part to submit  that he  was a  bona  fide  purchaser  for  value without notice.   Such  stand does into bear scrutiny on the touchstone of  probabilities.   But even that apart once the writ petition filed by Tahira Sultana challenging forfeiture order of  12th October 1977 got dismissed by the Bombay High Court and once that order became final the original order of forfeiture of this property dated 12th October 1977 operated

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 10  

in full  swing and the result was that as per Section 7 sub- section (3)  of SAFEMA  the said property stood forfeited to the  Central   Government  free   from   all   encumbrances. Therefore, it  must be  held that  by 12th  October 1977 the property in  dispute had  ceased to  belong  to  purchaser’s vendor  Tahira   Sultana  and  had  vested  in  the  Central Government.   Consequently when  she purported  to sell this property on  30th July  1981 to  the purchaser Tayab Ali she can be  said to  have sold  the property  which had  already ceased to  belong to  her and  she could  not pass any valid title in  favour of  Tayab Ali  in connection  with the said property which no longer belonged to her since 1977.  It is, of course,  true that  when she  sold the  said property the order of  forfeiture had  been stayed by the High Court but, as seen  earlier, it  was a  limited  stay  subject  to  the condition  of  inalienability  of  the  property  by  Tahira Sultana  and   breach  of  such  undertaking,  which  was  a substitute for  an injunction,  would make  that transaction voidable and its efficacy had to be seen in the light of the final result  of the writ petition and once the final result was against Tahira Sultana, whatever she did in the meantime became an  exercise in  futility.  In this connection we may usefully refer to section 11 of SAFEMA which reads as under:      "11. Certain  transfers to  be null      and voild.-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 avoid."      It is no doubt true that on the express language of the said  Section   transfer  of   any  property   pending   the proceedings under  Section 6 or 10 of the said act and prior to the  order of  forfeiture shall be treated to be null and void.   The purchaser  transaction is  after  the  order  of forfeiture of  the said  property,  Still the consequence of the said  transaction being  null  and  void  could  not  be avoided by  the purchaser  on the plea that this transaction was subsequent  to the  original order  of forfeiture,   The original order  of forfeiture  was stayed  at  time  of  the purchase.   It  got  confirmed  by  the  Bombay  High  Court ultimately when  the Misc.   Petition No. 1680 of 1977 moved by Tahira  Sultana was  disposed of  and the subsequent Writ Petition No.  1527 of  1995 was  dismissed by the High Court and the  S.L.P was  filed by  her in  this  Court  was  also dismissed.   We many  also note  that as the Misc.  Petition No.1680  of  1977  was  withdrawn  on  19th  June  1995  and ultimately the  forfeiture order came to be confirmed in the subsequent Writ  Petition No.1527  of 1995  on  21st  August 1995, the  transaction of  transfer in  favour of  Tayab Ali would be  said to  have been effected after the notice under section 6, issued to Tahira Sultana, and before the order of forfeiture ultimately got confirmed by the High Court and by this Court  and which had back affect of confirming the same from 1977.  It must, therefore, be held that the transaction of purchase  by the  appellants’ predecessor  Tayab Ali  was also hit by Section 11 of SAFEMA.  Consequently in 1981 when the purchaser  purchased this  property from  Tahira Sultana

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 10  

she had  no interest in the said flat which she could convey to the appellants’ predecessor.  In substance it amounted to selling of Central Government’s property by a total stranger in favour  of the  purchaser.   No title,  therefore, in the said  property   passed  to   the  appellants’  predecessor. Appellants’ predecessor,  therefore, had  no  legal  defence against the  claim of  the authorities  in calling  upon the appellants as  heirs of the original purchaser to vacate and hand over  the possession  of the  property to  the  Central Government as  full owner  thereof.   Both  the  points  for determination,   therefore,   are   answered   against   the appellants and in favour of the respondents.      Point No.3      So far as this point is concerned we fail to appreciate how it  is a  case of  double  forfeiture  of  the  property purchased from  the very  same tainted money.  It is easy to visualise that  tainted money  earned  by  smuggler  who  is convicted under  COFEPOSA may result in purchasing number of properties.   It  cannot,  therefore,  be  said  that  these properties when confiscated after following due procedure of SAFEMA would  amount to  multiple forfeiture.  So far as the facts of the present case are concerned it has to be kept in view that  for  Rs.  88,562/-  the  original  vendor  Tahira Sultana purchased  the disputed  flat in February 1975.  She sold this  very flat  to the  purchaser for  Rs. 3,60,000/-. Therefore, money  earned out  of the  said consideration Rs. 88,562/- remained  tainted money.   Utilising a part of this money she  purchased Shivasthan  Society  flat  for  Rs.  1, 86,000/- out  of which  it is  said that Rs. 1,60,000/- were utilised from  the sale  proceeds of  Dharam Jyoti  Building flat.   To this  original tainted  money of  Rs.  988,562/-, therefore,  she   must  have   added  some  more  money  for purchasing Shivasthan  Society flat.  Even assuming that for the purchase  of the  said flat  she utilised Rs. 1,60,000/- out of  Rs. 3,60,000/- obtained by her from the purchaser as consideration for the sale of the Dharam Jyoti Building flat to him  it cannot  be said  that the  original forfeiture of Dharam Jyoti  Building flat  on 12th October 1977 was in any way  affected   by  the  subsequent  forfeiture  of  another immovable  property  purchased  by  the  widow  of  original COFEPOSA smuggler  when she  purchased the second flat.  The said  transaction  was  quite  independent  of  the  earlier transaction which  had already resulted in forfeiture of the disputed property.   It  is not  as  if  that  Dharam  Jyoti Building flat  is being  forfeited twice,   Consequently the forfeiture of  the Dharam Jyoti flat on 12th October 1977 by the competent  authority must  be treated  to  be  quite  an independent transaction  as compared  to the latter order of forfeiture of Shivasthan Flat on 18th June 1987.  The latter order of forfeiture of entirely different immovable property cannot  retrospectively  invalidate  the  earlier  order  of forfeiture of  12th October  1977 pertaining to Dharam Jyoti Building flat.   At  the time when the earlier order of 12th October 1977  was passed  the said disputed property clearly reflected the  utilisation of tainted money of Rs. 88,562/-. If subsequent  dealing with the said property is found to be unauthorised and  inoperative in  law and if such subsequent transaction qua  the said  property remains a still-born one no life  can be  infused in  it on account of the subsequent forfeiture of  some other  property of  the original  vendor when a  subsequent forfeiture  has stood  on its own and has become final.  The third point for determination, therefore, also is  held against  the appellants  and in  favour of the respondents.      Point No.4

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 10  

    So far  as this  contention is  concerned Section  9 of SAFEMa on  its express  language cannot apply.  It lays down as under:      "9. Fine  in lieu  of forfeiture. -      (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      of 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 of  earnings, the amounts of      such part of income 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."      This is not a case in which the purchase of Flat No.25, Dharam Jyoti  Building, Bandra, Bombay, by Tahira Sultana in February 1975  could be  said to  be a result of only a part utilisation of  the tainted  money and  any part of the said sale consideration of Rs.88,562/- could be said to have come out of  a source  which was not tainted.  Such is not a case of anyone,  Shri Nariman,  learned senior  counsel  for  the appellants, also  therefore, rightly  contended that he only draws an  analogy from Section 9 and submits in the peculiar facts of  this case that the appellants may not be disturbed after so many years especially when from the other forfeited property the  central Government  is likely  to get  Rs., 65 lacs as  seen from  the auction  notice and that appropriate fine may be imposed on the appellants in lieu of forfeiture. It is  difficult to  agree.   The  appellants’  predecessor, purchaser Tayab  Ali played  with fire.   He  purchased  the property  despite   there  being   an  injunction   and   an undertaking by  his vendor  Tahira Sultana  in  the  pending proceedings  in   the  writ   petition.    His  transaction, therefore, was liable to be voided in the light of the final result of  the writ  petition which  confirmed the  order of forfeiture of  this very  property purchased  by him.   Even that apart,  as a  result  of  the  dismissal  of  the  writ petition of  Tayab Ali’s vendor by the Bombay High Court the purchased property  stood forfeited  to the Government prior to the  date of  purchase by  the purchaser  as the order of forfeiture, as  seen above, operated from 1977 once the stay granted by  the Bombay  High Court stood lifted on the final dismissal of  the writ  petition of  writ petitioner  Tahira Sultana, Therefore, the transaction of purchase by Tayab Ali was an  exercise in futility.  Such a still-born transaction cannot be resurrected by passing an order of fine in lieu of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 10  

forfeiture.   The  forfeiture  of  this  very  property  had already taken place on 12th October 1977 and which order got ultimately confirmed  by the  Bombay High Court.  Therefore, it is too late in the day for the appellants to contend that the clock should be put back and the 12th October 1977 order may be  converted into fine in lieu of forfeiture especially when Tahira  Sultana against  whom that  order has operated, has finally  lost in  her challenge to the said order.   The fourth point  for determination,  therefore, has  also to be rejected and stands decided against the appellants.      As a  result of  the aforesaid  findings of ours on all these points  the inevitable result is that the appeal fails and is dismissed.  Interim order of stay granted pending the appeal will  stand vacated.   On the facts and circumstances of the case there will be no order as to costs.