Competent Authority & Administrator,
NDPS Act 1985 & SAFEM (FOP) Act 1976, New Delhi
 
 

 

   
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Frequently Asked Question
 
Question1:
What is asset forfeiture under NDPS Act, 1985 ?
Answer: Asset forfeiture is the act of seizing/freezing and forfeiting illegally acquired properties of drug traffickers and their relatives/associates under specific provisions of NDPS Act
[Chapter VA of the NDPS Act 1985]
Question 2: What properties can be termed illegally acquired property ?
Answer: Under NDPS Act 1985 any property which has been either partly or fully acquired from earning made through an activity which is an offence under the Act is illegally acquired property. Also a property, which has been acquired partly or fully from any amount, which can be linked with the illegal property, as described in last sentence is also illegal property. For example If a drug trafficker X has a car, a house and some agricultural land which have been acquired by him, partly or fully through his earning made from drug trafficking, the car, house and agricultural land are illegally acquired property. X might also have made some earning from the house and land after their acquisition from illegal income. This earning is also illegal and if any property has been acquired from this earning that would also be illegally acquired property. Similarly if X sells his house and buys another house from the sale proceeds the new house would continue to remain illegally acquired property for being derivative of an illegally acquired property.
  However, if the property was acquired six years prior to the arrest of the accused or issue of authorization of arrest or warrant against him/her, the property is not hit by forfeiture related provisions under chapter VA of the Act.he Act.
  [Sub Section ‘g’ of Section 68 B of the NDPS Act 1985]
 
 
Question 3: What are tainted properties?
Answer:   The term tainted property is sometimes used in place of illegally acquired property. The basic concept for alleging a property, as illegally acquired property is that it has been derived partly or fully from an income, which has taint of having been earned from drug related offences. The term, tainted property is also therefore used interchangeably with illegally acquired property.
  [Sub Section ‘g’ of Section 68 B of the NDPS Act 1985] 
   
Question 4: If a person, not connected in anyway with drug trafficking, buys a property, which is an illegally acquired property of a drug offender, will this property be also treated as illegally acquired property?
Answer: The property will not be treated as illegally acquired property only if it has been bought in good faith with adequate consideration. Only if these two criterions are satisfied, the taint of illegal acquisition of property gets washed away, otherwise the taint remains and it is liable to forfeiture.
  [ Sub Section ‘g’ of Section 68 B of the NDPS Act 1985] 
 
Question 5:  Whether the assets of every person involved in drug related offences have to be forfeited ?
Answer:   The NDPS Act provides for forfeiture of tainted assets of such offenders
 
 I)   Who have been convicted with imprisonment for  ten years or more.
II)   Who have been detained under PIT NDPS Act 1988/JK PIT NDPS Act 1988 or an order of
  detention under any of these two Acts has been issued.
III)  Against whom an arrest warrant has been issued/has been arrested for commission of an offence
    punishable with an imprisonment for more ten years or more by a court in India or outside.
IV) Against whom a conviction order has been passed by any competent court outside India.
V)  Relatives and associates of persons in I, II and IV above.
VI)  Any holder of illegally acquired property if the property has not been bought for adequate consideration in good faith
  [Sub Section ‘2’ of Section 68 A of the NDPS Act 1985]
 
Question 6 :  So, conviction/possibility of conviction  with imprisonment for ten or more than ten years appears to be the principal criteria for a person to be hit by asset forfeiture provisions of the  NDPS Act 1985. What are the offences under the Act which attract imprisonment for  ten years or more ?    
Answer: The punishment under the Act depends upon the quantity of drugs/ narcotic substances involved. It is only in cases where quantity of drugs is classifiable as small, the punishment is imprisonment for less than ten years. For almost all cases where quantity involved is more than small quantity, the punishment is imprisonment for  ten years or more. Thus the persons who have been involved in offences where quantity of drugs is more than small are the persons whose tainted assets are to be forfeited.
  [Chapter IV  of the NDPS Act 1985 read with MOF, DOR Notification S.O. 527 (E) dated 16.7.1996] 
Question 7: What relatives and associates of a drug offender, covered as person under chapter VA of the NDPS Act, are hit by asset forfeiture provisions under the chapter?
Answer: The list of relatives and associates is a very large list covering almost all possible relatives/ associates of the person who may either be actively involved in the activities of the drug offender or may be getting monetary benefits from him. It starts from the spouse of the person their children, their parents, their in laws, their brothers sisters and their relatives. The schematic diagram showing the complete family tree , mentioned in chapter IV of this manual may be seen. Similarly associates would include business partners, mangers, accountants, co residents etc. Details may be seen in chapter IV
  [Sub Section ‘b’ & ‘i’ of Section 68 B of the NDPS Act 1985] 
 
Question 8: The relatives and associates may have their own source of income and may have  acquired properties through such income. Whether all properties of relatives and associates are hit by the forfeiture related provisions?
Answer:   No, the chapter VA is concerned with the forfeiture of illegally acquired properties only. Only such properties of relatives and associates, which have been acquired from illegal income derived from drug offences under the NDPS Act or are held by them on behalf of a drug offender  are hit by forfeiture related provisions.
  [Section 68 C of the NDPS Act 1985]     
Question 9: Does this mean that ancestral property or property acquired from legal sources of relatives and associates of the drug offender are out of purview of the forfeiture provisions ?
Answer: Yes, if the ancestral properties were acquired through legal source of the ancestors or the property acquired by relative/associate are from legal sources, they are out of purview of the forfeiture provisions.
  [ Section 68 C of the NDPS Act 1985] 
 
Question 10: What are the assets which are to be forfeited?
Answer: The term asset or property as defined under the Act covers almost everything, which can be acquired with money. It includes land, house, vehicles, companies, bank accounts, fixed deposits etc. Details can be seen in Quick Reference section of this chapter
  [Sub Section ‘h’ of Section 68 B of the NDPS Act 1985] 
 
Question 11: How is the asset forfeiture proceeding initiated?
Answer The asset forfeiture proceeding is started with the action of identification and tracing of illegally acquired assets of the persons who are hit by forfeiture provisions under the Act
  [Section 68 E of the NDPS Act 1985] 
 
Question 12: What is the trigger point for initiation of asset forfeiture proceedings?
Answer: The Asset forfeiture proceedings shall be started once the proper officer receives an information, and he is satisfied, that a person to whom provisions of chapter VA of the Act applies holds any illegally acquired property. The officer may record reasons for initiating action in writing and shall proceed to identify and trace the illegally acquired properties.
  [Sub Section 1 of Section 68 E]
Question 13: What steps shall be taken to identify and trace the illegally acquired property?
Answer:   The officer may carry out an enquiry, may make an investigation, or survey any place, property, books of accounts etc
  [Sub Section 2 of Section 68 E]
 
Question 14: Does the officer have powers to carry out searches in connection with identification and tracing of illegally acquired properties?
Answer :   Yes vide sections under Chapter V of the NDPS Act proper officer has been granted powers to search a premises, a conveyance or a person for collecting evidences showing holdings of illegally acquired properties, after following due procedure.
  [Section 41,42& 43 of Chapter V the NDPS Act 1985] 
 
Question 15: Can directions/guidance be sought from Competent Authority with regard to identification and tracing of the properties ?
Answer: Yes, the Competent Authority is empowered to issue directions/guidelines in this regard and concerned officer may seek such directions/guidelines.
  [Sub Section ‘3’ of Section 68 E of the NDPS Act 1985] 
 
Question 16: What shall be done once the illegally acquired properties have been identified and traced?
Answer:   The officer, if he has reasons to believe that the identified illegally acquired properties may be concealed /transferred or may be dealt in any manner which will affect their forfeiture proceeding under Chapter VA, he shall seize the property and shall pass a seizure order. If due to any reason seizure is not practicable he shall pass a freezing order prohibiting transfer of the property.
  [Section 68 F of the NDPS Act 1985] 
 
Question 17: What is the difference between seizing order and freezing order?
Answer: Both seizing and freezing orders are orders under Section 68 F of the Act passed by the concerned officer for preventing concealment, transfer, or any other dealing with illegally acquired properties which may frustrate forfeiture proceedings against them under chapter VA of the Act. The officer for this purpose has to seize the properties, however if for some reason it is not practicable to seize the properties he may pass a freezing order preventing transfer or any other such activity related with such properties without prior permission of the officer or the Competent Authority. 
  [Section 68 F of the NDPS Act 1985 ]
Question 18:   Is there any standard format for seizing/freezing order?
Answer: The Act does not provide for a standard format of seizing/freezing order. However it is important that any seizing/freezing order must contain following details:
 
I) The full name and address of the concerned person
II)  The arrest/conviction particulars.
III)  The full name, address and nature of relationship/association, if the property is held by relative/associates of the arrestee/convict.
IV)  The full details of the property. Please see Quick Reference section for property details to be
  recorded in the order.
V)  The reasons, which the officer has to believe that the properties are illegally acquired property.  
 
Question 19: Is there any specified time limit within which an order of seizing/freezing under Section 68 F of the Act has to be passed?
Answer:  The Act does not specify a time period within which a seizing/freezing order must be passed. Once the enforcement officer receives an information to his satisfaction that a person to whom provisions under chapter VA of the Act applies holds illegally acquired properties, it is mandatory for him under section 68 E of the Act to take all the steps necessary for tracing and identifying illegally acquired properties. However there is no fixed time period for completion of the tracing and identification proceedings unless fixed by the Competent Authority under subsection 3 of section 68 E. Generally no time period is fixed by the Competent Authority considering the complexities involved in the tracing and identification of such properties. However it is desirable that the identification and tracing job is completed within a reasonable period of time and subsequent order under section 68 F is issued as soon as possible.
  [Section 68 E of the  NDPS Act 1985 ]
Question 20:  Is it necessary that a seizing/freezing order under Section 68 F should be issued only after all the illegally acquired properties have been traced and identified?
Answer: No, the Act does not fix any number of seizing/freezing orders, which can be issued. More than one seizing/freezing order can be issued if further properties are identified. For example the enforcement officer may have identified as one house, one vehicle and some bank accounts of an accused as illegally acquired properties and might have issued a seizing/freezing order. Subsequently it is found that the person owns one more house and has three more vehicles, which also are illegally acquired. There is no bar under the Act for issue of another seizing/freezing order for these newly found illegally acquired properties. Any number of seizing/freezing orders under section 68 F of the Act can be issued, at any time for implementation of prohibition under Section 68 C of the Act.
  [Section 68 E & Section 68 F of  the NDPS Act 1985]
 
Question 21: What shall be done after passing a seizing/freezing order?
Answer: The seizing/freezing order shall be sent to the jurisdictional competent authority, within 48 hours of it being made for confirmation. Without confirmation from the Competent Authority the order has no effect.
  [Section 68 F of the NDPS Act 1985]
 
Question 22: How is the jurisdiction of the Competent Authority decided?
Answer:   The jurisdiction of the competent authority is decided on the basis of residential address of the accused/convicted person. If the person has more than one address then the Competent Authority in whose jurisdiction the sponsoring agency is located, has the jurisdiction. For full detail please see “ Jurisdiction” in chapter I.
  [M.O.F.,D.O.R. Notification no. 5 dated 16.3.2001]
Question 23: What is significance of confirmation of freezing order by the Competent Authority? 
Answer:   Under the Act all seizing /freezing order has to be confirmed by the Competent Authority within one month of it being made. Before confirmation the concerned person is given an opportunity to establish that his properties are legally acquired properties. This action is required in the interest of natural justice. Once the Competent Authority confirms an order under Section 68 F, the properties under the order are received and managed by an Administrator appointed by the Government till its final forfeiture or release. Transfer of any property against which order passed under section 68 F has been confirmed, has to be ignored for forfeiture proceedings and if the properties are subsequently forfeited , the transfer has to be treated as null and void.
  [Section 68 F (2),Section 68 G & Section 68 M of the NDPS Act 1985] 
 
Question 24: What is the next action after the seizing/freezing order is confirmed?
Answer:   The first effect after the confirmation of any seizing/freezing order is that it is received by Administrator for administration and management.If the seizing/freezing order is in connection with a person who is a convict or a detainee the Competent Authority issues a Show cause notice. In case of an arrestee show cause notice is issued only after his conviction.
  [Section 68 H of the NDPS Act 1985] 
 
Question 25 : When are the properties forfeited ?
Answer :   The Competent Authority after granting hearings and following due process of law , forfeits the property if the person fails to prove that the properties are legally acquired property.
  [Section 68 I of the NDPS Act 1985] 
Question 26: On whom lies the burden of proof?
Answer:   The burden of proving the fact that the properties have been acquired legally flies on the concerned person.
  [Section 68 J of the NDPS Act 1985] 
 
Question 27: There may be considerable gap between the seizing/freezing of the properties and their forfeiture/disposal. How are the properties to be managed during the intervening period? 
Answer:   For management of seized/frozen properties a Administrator has been appointed under the Act. At present all Competent Authorities have been appointed as Administrator also. The Seized/frozen properties have to be received by the Administrator who manages the properties as per provisions of “ The Illegally Acquired Property (Receipt, Management and Disposal) Rules 1989.
  [Section 68 G  of the NDPS Act 1985]
 
Question 28: Does this mean that the possession of the properties has to be taken over after confirmation of seizing/freezing order?
Answer: Once the Seizing/freezing order is confirmed and there is no adverse order from any court / tribunal the possession of the properties have to be taken over and managed in the manner as mentioned above.
 
Question 29: If there is some income from the seized/frozen properties, who receives it?
Answer: All income from seized/frozen properties like rent, fee, interest on deposit etc have to be deposited in Government of India Account.
  [The Illegally Acquired Property (Receipt, Management and Disposal) Rules 1989.]
 
Question 30: Can the seized/frozen properties be released by the Competent Authority?
Answer: Yes, if the accused is acquitted or the detention order is set aside the seized/frozen properties are to be released.
  [ Section 68 Z of the NDPS Act 1985]
Question 31: Can assistance from other departments may be taken in the task of identification/tracing/forfeiture of illegally acquired properties?
Answer: Yes, the Competent Authority has been granted powers to direct to officers of Customs department, Narcotics Control Bureau, Income Tax department etc to provide necessary assistance. Enforcement Agencies may ask the Competent Authority for issue of necessary directions to these departments for providing necessary assistance if required.
  [Section 68 S & Section 68 T of the NDPS Act 1985]
 
Question 32: Is there any punishment for buyer of the property against which forfeiture proceedings under chapter VA are going on? 
Answer: Yes, if the buyer has knowingly acquired such property he shall be punishable with an imprisonment for a period up to five years and a fine up to Rs. fifty thousand.
  [Section 68 Y of the NDPS Act 1985 ]
 
Question 33: How does one ensure that seized/frozen properties are not clandestinely sold by the accused?
Answer: Proper publicity to the fact that the property is under forfeiture proceedings must be given.