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

 

   
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SAFEM (FOP) Act 1976
 
THE SMUGGLERS & FOREIGN EXCHANGE MANIPULATORS (FORFEITURE OF PROPERTIES ) ACT 1976.
 

This Act aims to forfeit properties of smugglers and foreign exchange manipulators.The relevant provisions under SAFEM (FOP) A 1976, pertaining to forfeiture of properties  have been detailed below.

The Prohibition under The Act

Section 4 of the Act prohibits any person covered under the Act to hold any illegally acquired property either directly or through any other person .If any illegally acquired property is held by such person this shall be liable for forfeiture to the central government.

The Persons To Whom The Prohibitions Apply

Action for forfeiture of property under SAFEMA is to be taken against following category of persons (Section 2 of the Act):

  1. A person who has been convicted under the Sea customs Act 1878 or Customs Act 1962 of an offence where value of goods exceeds one lakh rupees.
  2. A person who has been convicted twice under Customs Act 1962 or Sea Customs Act 1878 irrespective of the value of goods.
  3. A person against whom an order for detention under COFEPOSA 1974 has been made subject to conditions specified in the Act.
  4. A person who has been convicted under   the FERA 1947/1974 of an offence where amount involved is more than one lakh rupees
  5. A person who has been convicted twice under FERA 1947/1974 without any monetary limit.
  6. The following relatives of the person in (i) to (v) above:
  1. Spouse of the person
  2. Brother or sister of the person
  3. Brother or sister of the spouse of the person
  4. Any lineal ascendant or descendent of the person
  5. Any lineal ascendant or descendent of the spouse of the person
  6. Spouse of the persons referred in (b) to (e) above.
  7. Lineal descendent of persons in (b) and (c) above.

  8. The following associates of the person in (i) to (v) above
  9. Individual/s who had been or residing in the residential premises of the person
  10. Individual/s who had been managing the affairs or keeping the account of the person.
  11. Any business entity** of which the person was or is a member, partner or director.
  12. Those persons who had been member, partner or director of the business entity during the time when the person was member, partner or director.
  13. Manager or accountant of the business entity referred in (c) above.
  14. Trustee/s of trust created by the person or where the person has contributed more than twenty percent in the assets of trust.
  15. The person/s who in the opinion of the competent authority for reasons recorded is holding benami property for the person.
** Business Entity means association of persons, body of individuals, partnership firms, or private company under The Company
  Act 1956

The Forfeiture Proceedings And Authority

 The Competent Authority

Section 5 of the Act provides for appointment of Competent Authority for proceedings under the Act. Upon receipt of information regarding property holding of any person covered under the Act the competent authority issues a notice to the concerned person for explaining the source of income required for acquisition of the property. The competent authority after considering the submissions made by the person finally forfeits the property or imposes fine in lieu of forfeiture.

The Show Cause Notice

Section 6 provides for issue of show cause notice by the competent authority to the concerned person.

The Forfeiture of Property

Section 7 provides for forfeiture of properties after considering the reply to the show cause notice and granting hearing.

The Burden of Proof

Section 8 puts the burden of proof on the person

The Fine in Lieu of Forfeiture

Section 9   provides for imposition of fine in lieu of forfeiture in case where less than fifty percent of the acquisition cost remains unexplained. The fine in such cases is one hundred and twenty percent of the unexplained value.

The Transfer of Property

Section 11 provides that transfer of any property in respect of which a show cause notice has been issued shall be ignored for proceedings under the Act and if the property is forfeited at a later date such transfer shall be treated as null and void.