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

 

   
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Financial Investigation
 
The Trigger Tracing and Identifying Seizing and Freezing Examination of Source
 

The Trigger

The arrest of a person for an offence under NDPS Act , punishable with imprisonment for ten years or more requires immediate initiation of a financial investigation for tracing,identifying and seizing illegally acquired properties. Other trigger points are receipt of conviction order of a person where imprisonment is for ten years or more, passage of detention order under PITNDPS Act or J&K PIT NDPS Act , Conviction of a person for similar offence by a competent court of criminal jurisdiction outside India, arrest/ issue of arrest warrant/authorization of arrest for commission of a similar offence under corresponding law out side India.

The financial investigation is triggered by any of the event as mentioned in above paragraph and the first thing an investigating officer has to do is to trace and identify illegally acquired properties held by the drug offenders and his relatives/associates.  

Tracing & Identifying

The terms tracing and identifying have beeen defined under chapter VA of the NDPS Act 1985. Tracing, broadly means finding out the nature, title and ownership of the properties, identifying menas establishing the proof that the properties have been acquired from drug trafficking. The investigating officer thus has to find the ownership/title etc of the properties and then has to establish that the properties were acquired from drug income.

While initiating investigation for tracing and identifying the illegally acquired properties the concept of tainted property must be kept in mind. Any property, which has been acquired either partly or fully through illegal income of drug trafficking or smuggling itself becomes tainted and hence is liable to forfeiture. The Property irrespective of the activities of its owner is a illegally acquired property if any part of its acquisition cost has been financed through  drug income.

The tracing and identification of properties liable to forfeiture may be carried out in following stages

Stage 1. Identify the relatives and associates( as defined under NDPS Act 1985 and explained under the Whose Property Link) of the person who has been arrested/convicted  for  an offence punishable with imprisonment for ten years or more.  It is advisable to first collect names addresses and profession of all relatives and associates as per definition in the Act . The best time to collect this information is immediately after the arrest of the person.

Stage 2 :  All relatives and associates will not be getting monetary benefit from the drug trafficker .Identify such relatives and associates who are either directly invoved with the trafficker in his drug business or are getting monetary benefits from him. After short listing the target persons proceed to trace their properties.

Stage 3 : Tracing the properties : The properties of persons identified in stage 2 can be traced by making detailed inquiries in the area where the person lives. Often the best source of information is the person himself. A few of the other possible sources are:

a)    Public Agencies: The Income Tax Department; The Municipals Bodies; The Transport Authority; Registrar of companies:

b)    The Financial Institutions : Banks;Stock exchanges;Mutual fund Companies;Other finance companies:

c)     Individual Records: Books of accounts;IT Returns;Loan applications;Balance Sheets;Other financial records

d)     Individuals The person himself ;The informants;The neighbor;The Co worker;The business associates; The Relatives

Seizing & Freezing

The seizing /freezing is a two stage process .

Stage 1The first level assessment of the illegal nature of properties:  This involves evaluation of the properties for having been acquired from drug income. The officer shall examine with reference to available evidence before him as to whether the properties prima –facie appear to be have been acquired from drug earning. If he has reasons to believe that the properties prima facie appears illegal and may be transferred by the time he completes investigation he may seize the properties under section 68 F of the Act. If it is not practicable to seize the properties the officer may freeze them .For seizing/freezing the properties he has to pass a seizing/freezing order.

Stage 2 :   Passing of Seizing/freezing order : A seizing/freezing order must contain proper identification detail of the properties, its market and acquisition value if available and the names and addresses of the owners.The seizing /freezing officer must record his reasons to believe and it must be mentioned in the order. The order must be sent to the Competent Authority within forty eight hours of it being passed for confirmation > The Competent Authority has to take a decision regarding confirmation within thirty days of the passing of the order.Once confirmed the properties have to be taken under administration for management/disposal.

Click for Draft seizing order

Examination Of Source :

Further evidence in support of the belief that the properties are illegally acquired may be carried out if needed or if directed by the Competent Authority. Normally such investigations are got conducted through departments like Income tax,however some times the investigating officer also has to carry out investigations in this regard.

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