Madras High Court
The Competent Authority & ... vs Manoharan on 23 January, 2025
Author: S.M.Subramaniam
Bench: S.M.Subramaniam
WP.No.6888 of 2018
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 02.01.2025
PRONOUNCED ON : 23.01.2025
CORAM:
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
and
THE HONOURABLE MR.JUSTICE M.JOTHIRAMAN
W.P.No.6888 of 2018
and WMP.No.8531 of 2018
The Competent Authority & Administrator
SAFEMA & NDPS Acts
UTSAV, No.64/1, G.N.Chetty Road,
T.Nagar, Chennai – 17. … Petitioner
V.
1.Shri Late C.Shankar
Rep by his legal heirs Smt.Usha (wife) & ors
Usha Illam, 15A Vijayan Street
Ramakrishna Nagar, Salamedu
Villupuram – 605 602.
2.Appellate Tribunal for Forfeited Property
Government of India, 4th Floor
Lok Nayak Bhawan, Kahn Market,
New Delhi – 110 003.
Rep by its Registrar. ...Respondents
https://www.mhc.tn.gov.in/judis
1
WP.No.6888 of 2018
PRAYER : Writ petition filed under Article 226 of Constitution of India
to issue a Writ of Certiorari to call for the impugned records relating to
the order passed by the Tribunal, the 2nd respondent herein in FPA-ND-
1/MDS/2012 dated 09.08.2017, quash the same and pass any other
further or other orders.
For Petitioner : Mr.AR.L.Sundaresan
Addl. Solicitor General of India
Assisted by Mr.B.Rabu Manohar, SCGPC
For Respondents : No appearance – R1
R2 – Tribunal.
ORDER
(The Order of the Court made by Justice M. JOTHIRAMAN) Under assail is the order dated 09.08.2017 passed by the Appellate Tribunal for Forfeited Property, New Delhi in FPA-ND-1/MDS/2012. The unsuccessful Competent Authority & Administrator has preferred the writ petition before this Court.
2. The case of the petitioner is as follows :-
(i) One Shri Alexandar Vyukhin @ Alex has been charged for the offences of trafficking in Narcotic Drugs and Psychotropic Substances and late C.Shankar @ Sekar was also charged for the various offences under Narcotic Drugs and Psychotropic Substances Act [herein after https://www.mhc.tn.gov.in/judis 2 WP.No.6888 of 2018 referred to as “NDPS Act”]. While undergoing detention Shri.C.Shankar @ Sekar committed suicide on 18.03.2013 in Central Prison, Puzhal.
(ii) During enquiry, it was established that late Shri.Shankar @ Sekar, Smt.Usha w/o.late Shri.Shankar @ Sekar as associates of Shri Alexandar Vyukhin @ Alex in the illegal trafficking of NDPS.
Consequent to the seizure of 35 parcels containing Narcotic drugs consigned by one K.Sekar from the Speed Post concentration center, St.Thomas Mount, Chennai on 21.09.2011, the NCB authorities searched the residence of Shri.Shankar @ Sekar at 15A, Ushaillam, Vijayan Street, Ramakrishna Nagar, Salamedu, Villupuram – 605 602 on 26.09.2011 and detained three cardboard boxes containing tablets/capsules. Further, 42 speed post articles returned undelivered by the local post office were found in the said residence of Shri.Shankar @ Sekar at Villupuram. The said three cardboard boxes were opened and found that the drugs contained therein were Psychotropic substances covered under the NDPS Act. The undelivered returned speed post parcels were also found to contain Psychotropic substances covered under NDPS Act. Smt.Usha, as the owner of the residence / occupier of the house permitted it to be used for carrying on the illicit trafficking in drugs by Alexandar Vyukhin @ Alex and Shri.Shankar @ Sekar. The https://www.mhc.tn.gov.in/judis 3 WP.No.6888 of 2018 NCB authorities had passed freezing orders under Section 68F(1) in Fin.INV./CZU/12/2011-NCB/MDS dated 17.10.2011 freezing 23 items of movable / immovable properties which included the said residential house, motor cycle / car owned by Shri Shankar @ Sekar and Smt.Usha respectively and deposits owned by them in several banks along with balances in the SB accounts maintained with such banks.
(iii) Prima facie, it appears that 50% - 90% (approximately) of the money transmitted by Alexandar Vyukhin @ Alex being the proceeds from the drug trafficking found its way into the account of Smt. Usha and she acquired both movable and immovable properties during the years 2007-2011. In the year 2007-2008, it amounts to 99% of the credit in the bank accounts of late Shri.Shankar @ Sekar. Smt.Usha is not known to have any legitimate sources of income and not assessed to Income Tax, she acquired movable and immovable properties to the tune of Rs.90 lakhs approximately.
(iv) Late Shri.Shankar @ Sekar, in his statement dated 27.09.2011 before the NCB authorities informed that between 1985 and 2004 he was working in various pharmaceutical concerns and he came back to https://www.mhc.tn.gov.in/judis 4 WP.No.6888 of 2018 Villupuram and settled. Only in the year 2006, he got introduced to Shri.Rajesh, through him he got introduced to one Alexandar Vyukhin @ Alex in 2007. He had stated that he built a house for Rs.8 Lakhs in the year 2007 and built the first floor in 2010 by spending a sum of Rs.10 Lakhs. He further stated that he had purchased Suzuki Motor cycle and Indica Car during May 2011. He further stated that he had made deposits in his own name and in the name of his wife with ICICI bank and South Indian Bank. He had not mentioned about the sources of income from which the said assets were acquired / deposits made. Freezing order dated 14.11.2011 was passed by the NCB authorities freezing 405 grams of gold jewelery.
(v) Smt. Usha claimed that a sum of Rs.25 lakhs was given to her husband by her father some 15 ½ years back out of sale proceeds of the shop for the purpose of marriage expenses of her sisters. She further claimed that another sum of Rs.10 Lakhs was given out of the sale proceeds of her mother's house at Amman Koil Street, Nagercoil in the year 2005. She has stated that cash of Rs.12 Lakhs and 200 sovereigns of gold were given to her at the time of her marriage. She claimed that her sister living in Hyderabad gave a sum of Rs.10 Lakhs two years back https://www.mhc.tn.gov.in/judis 5 WP.No.6888 of 2018 out of the sale proceeds of the property belonging to her sister's husband one Shankar. She also stated that by selling 150 sovereigns of gold Jewelery in 2005, she acquired the house property, but she did not obtained any receipts/voucher. It is clear that neither late Shri.Shankar @ Sekar nor Smt.Usha had any known sources of income other than remittances received from Alexander Vyukhin @ Alex out of illicit trafficking in drugs, which in turn was utilized by late Shri.Shankar @ Sekar to acquire properties / car / deposits in his wife's name and making deposits with bank accounts in their names.
(vi) Yet another freezing order was also passed on 02.12.2011 in respect of investments amounting to Rs.7 Lakhs with ICICI Prudential in the name of late Shri.Shankar @ Sekar. After careful consideration of all the documents, evidences and statements of late Shri.Shankar @ Sekar and Smt.Usha, the competent authority vide order dated 14.11.2011 had confirmed the freezing order passed by the Intelligence Officer, NCB, Chennai finding late Shri.Shankar @ Sekar and Smt.Usha as “person” within the meaning of NDPS Act. By virtue of power conferred under Section 68B(b)(vii) of NDPS Act. The competent authority considered late Shri.Shankar @ Sekar and Smt.Usha residing at No.15A, Ushaillam, https://www.mhc.tn.gov.in/judis 6 WP.No.6888 of 2018 Vijayan Street, Ramakrishna Nagar, Salamedu, Villupuram – 605 602 (TN) as associates of Shri.Alexandar Vyukhin @ Alex Door No.153, Divankandappa Nagar, III Street, Periya Mudaliar Chavadi, Kottakuppam Post, Villupuram District, TN and (40355, Chereranova Street, Ekaterinberg, Russia – 620 034) passed another order dated 13.04.2016, against the order of the Competent Authority under Section 68F(2) dated 14.11.2011. Subsequently, late Shri.Shankar @ Sekar preferred an appeal before the Appellate Tribunal for Forfeited Property, New Delhi in FPA-ND-1/MDS/2012. During the pendency of the appeal, late Shri.Shankar @ Sekar committed suicide in Central Prison during 2013.
3. The Tribunal continued the appeal proceedings and the case was argued on behalf of the deceased, represented by his wife – Smt.Usha. The appellate Tribunal vide order dated 09.08.2017 in FPA-ND- 1/MDS/2012 allowed the appeal filed by late Shri.Shankar @ Sekar and directed the competent authority to release the properties under Section 68Z of NDPS Act. Aggrieved over the same, the Competent Authority & Administrator has preferred the present writ petition. https://www.mhc.tn.gov.in/judis 7 WP.No.6888 of 2018
4. Mr.AR.L.Sunderasan, the learned Additional Solicitor General of India, appearing on behalf of the petitioner would submit that as per the provisions of Section 68Z of the NDPS Act, the late Shri.Shankar @ Sekar had not been acquitted or discharged from the charges against him. He relied on sub section (1) of Rule 12 of ATFP Rules 1989, which states that the Tribunal should continue appeal proceedings and consider the sources of acquisition of properties, as forfeiture proceedings do not abate due to death or insolvency. He would submit that the Tribunal has relied on a judgment of the Hon'ble Supreme Court of India reported in (2016) 7 SCC 797 – Subhadramma V. State of A.P., but the facts of the said case were materially different and clearly distinguishable from the present case. In the above referred case, attachment was done after the death of the accused and the facts and evidence are differed from the present case. In the contrast, the attachment was done when Shri.Shankar @ Sekar was alive and he had voluntarily stated that the investments made in the properties came from the drug business.
4(i) He would further submit that the CC against the Shri.Shankar @ Sekar was not withdrawn by the NCB and remains pending. As per Chapter V-A, Section 68 of the NDPS Act, the Competent Authority has https://www.mhc.tn.gov.in/judis 8 WP.No.6888 of 2018 jurisdiction over the freezing, forfeiture & disposal of properties derived from illicit trafficking in Narcotic and Psychotropic substances. This jurisdiction extends to any person who has been arrested or against whom a warrant or authorization of arrest has been issued for the commission of an offence under the NDPS Act punishable with imprisonment for 10 years or more. The Act does not prescribe a time limit for initiation of proceedings under Chapter V-A against persons, relatives and associates etc., Therefore, the order treating Smt.Usha as an “associate” of Shri Alexander Vyukhin @ Alex was passed in accordance with law. There is only an abatement of criminal proceedings against late Shankar @ Sekar from the offence. Hence, Section 68Z will not apply in this case.
5. The learned Additional Solicitor General of India placed reliance on the judgment of the Hon'ble Apex Court reported in (2022) 10 SCC 684 – Gurmail Singh and another v. State of Uttar Pradesh and another, paragraph 27 of the aforesaid judgment is extracted below :-
“27. The term 'abatement' or 'abate' has not been defined in Code of Criminal Procedure. In the https://www.mhc.tn.gov.in/judis 9 WP.No.6888 of 2018 said circumstances, its dictionary meaning has to be looked into. As relates criminal proceedings going by the meaning given in Black's Law Dictionary, 10th Edition, abatement means 'the discontinuation of criminal proceedings before they are concluded in the normal course of litigation, as when the Defendant dies'. Thus, it can be seen that the meaning of abatement can only be taken in criminal proceedings as 'discontinuation of such proceedings owing to the death of the Accused/convict pending such proceedings'. In short, it would reveal that an appeal against conviction (except an appeal from a sentence of fine) would abate on the death of the Appellant as in such a situation, the sentence under appeal could no longer be executed.
6. We have considered the submissions made by the learned Additional Solicitor General of India and perused the materials available on record. There is no representation on behalf of the first respondent either in person or through the Counsel.
https://www.mhc.tn.gov.in/judis 10 WP.No.6888 of 2018
7. It is not in dispute that the appellate Tribunal without examining the merits of the case regarding the sources of acquisition of the properties allowed the appeal and directed the competent authority to release the properties under Section 68Z of the NDPS Act. The decision of the Tribunal was solely based on the ground that all the charges against late Shankar @ Sekar abated due to his death, during trial proceedings. The Tribunal held that the presumption of innocence is available to the accused until he is convicted and it is not open to the Competent Authority to proceed against his property under the NDPS Act. It is pertinent to mention that during the confirmation proceedings under Section 68F(2) of the NDPS Act, the involvement of Smt.Usha in acquiring assets through the illicit income of the late Shankar @ Sekar along with Alexandar Vyukhin @ Alex was elaborately discussed.
8. The proceedings of the Competent Authority, SAFEM (FOP)A & NDPS Act, Chennai dated 13.04.2016 which declared Smt.Usha as an associate of Shri Alexander Vyukhin @ Alex were not a fresh order. Instead, they were a continuation of the proceedings initiated in 2011 by informing her active involvement in the illicit trafficking of drugs and https://www.mhc.tn.gov.in/judis 11 WP.No.6888 of 2018 subsequent acquisition of assets, even during the lifetime of late Shri.Shankar @ Sekar.
9. It is relevant to refer Section 8A of NDPS Act 1985 (61 of 1985) as amended :-
8A. Prohibition of certain activities relating to property derived from offence.—No person shall —
(a) convert or transfer any property knowing that such property is derived from an offence committed under this Act or under any other corresponding law of any other country or from an act of participation in such offence, for the purpose of concealing or disguising the illicit origin of the property or to assist any person in the commission of an offence or to evade the legal consequences; or
(b) conceal or disguise the true nature, source, location, disposition of any property knowing that such property is derived from an offence committed under this Act or under any other https://www.mhc.tn.gov.in/judis 12 WP.No.6888 of 2018 corresponding law of any other country; or
(c) knowingly acquire, possess or use any property which was derived from an offence committed under this Act or under any other corresponding law of any other country.]
10. It is pertinent to refer Section 68B(b)(vii) of NDPS Act states hereunder :-
68B. Definitions.— In this Chapter, unless the context otherwise requires,—
(b) “associate” in relation to a person whose property is liable to be forfeited under this Chapter, means— ….
….
(vii) where the competent authority, for reasons to be recorded in writing, considers that any properties of such person are held on his behalf by any other person, such other person;
11. The proceedings initiated in the year 2011 and the https://www.mhc.tn.gov.in/judis 13 WP.No.6888 of 2018 confirmation order mentioned the materials available against Smt.Usha and her husband would reveal that there were sufficient reasons to believe that she concealed the illicit origin of property and assisted her husband late Shankar @ Sekar and Shri Alexander Vyukhin @ Alex in the commission of the offence of illicit trafficking of drugs. Therefore, by virtue of powers conferred under Section 68B(b)(vii) of NDPS Act, the Competent Authority conceded that late Shankar @ Sekar and his wife Smt.Usha, as associates of Alexander Vyukhin @ Alex and passed an order dated 13.04.2016. As against the order of the Competent Authority under Section 68F(2) dated 14.11.2011, late Shankar @ Sekar preferred an appeal before the Appellate Tribunal for Forfeited Property, New Delhi. In the meantime, the Shankar @ Sekar committed suicide at Central Prison in 2013. The Tribunal continued the appeal proceedings and the case was argued on behalf of the late Shankar @ Sekar by his wife Smt.Usha.
12. The Tribunal erred in terming the subsequent order dated 13.04.2016, which treated Smt.Usha w/o.late Shankar @ Sekar / deceased as misconceived and illegal. The order passed by the competent authority on 13.04.2016 has nothing to do with this appeal https://www.mhc.tn.gov.in/judis 14 WP.No.6888 of 2018 and merely declared Smt.Usha w/o.late Shankar @ Sekar / deceased person as an “associate” of Shri.Alexander Vyukhin @ Alex, the co- accused person of late Shankar @ Sekar considering her involvement in the commission of illicit trafficking of the drugs. Further, the Act prescribes no time limit for initiation of proceedings under Chapter V-A against persons, relatives and associates etc.
13. It is relevant to refer Section 68J and 68Z of NDPS Act :
68J. Burden of proof.—In any proceedings under this Chapter, the burden of proving that any property specified in the notice served under section 68H is not illegally acquired property shall be on the person affected.
68Z. Release of property in certain cases.—(1) Where the detention order of a detenu is set aside or withdrawn, properties seized or frozen under this Chapter shall stand released.
(2) Where any person referred to in clause (a) or clause (b) or clause (cc) of sub-section (2) of https://www.mhc.tn.gov.in/judis 15 WP.No.6888 of 2018 section 68A has been acquitted or discharged from the charges under this Act or any other corresponding law of any other country and the acquittal was not appealed against or when appealed against, the appeal was disposed of as a consequence of which such property could not be forfeited or warrant of arrest or authorisation of arrest issued against such person has been withdrawn, then, property seized or frozen under this Chapter shall stand released.
14. It is settled law that in any proceedings under Chapter V-A of the NDPS Act, the burden of proving that any property specified in the notice served under section 68H is not illegally acquired property shall be on the person affected. In the instant case, the burden of proof lies on the respondent and he was not acquitted nor discharged.
15. It is relevant to refer the Appellate Tribunal for Forfeited Property (Procedure) Rules 1989. Specifically Rule 2 (h) and Rule 12(1) & (2) which states hereunder:-
2(h) - “legal representative” means a person https://www.mhc.tn.gov.in/judis 16 WP.No.6888 of 2018 who in law represents the estate of deceased person, and includes any person treated by the Tribunal as representing the deceased person in the proceedings pending before the Tribunal.
12(1) An Appeal shall not abate by reason only of the death of an appellant or on his adjudication as an insolvent.
(2)The Tribunal may on an application made in this behalf by a legal representative of a deceased appellant make him a party and proceed with the appeal.
16. The Tribunal's findings that the presumption of innocence is available to the accused until he is convicted and that it is not open to the Competent Authority to proceed against his property under the NDPS Act, is in correct. The above finding of the Appellate Tribunal is contrary to the statute as Sub Section (1) of Rule 12 of the ATFP (PRO) Rules provides for continuation of proceedings. https://www.mhc.tn.gov.in/judis 17 WP.No.6888 of 2018
17. The Tribunal, without examining the merits of the case allowed the appeal solely on the ground that the criminal proceedings abated due to the death of the accused. Consequently, the Tribunal directed the release of the forfeited properties under Section 68Z of the NDPS Act. The proposition of law cited by the Appellate Tribunal reported in 2016 (7) SCC 797 (cited supra) is distinguishable from the present case. In that case, the attachment was done after the death of the accused. In contrast, the attachment in this case was done when Shankar @ Sekar was alive and he had voluntarily disclosed investments in his name and those of his family members.
18. We are of the opinion that during the confirmation proceedings under Section 68F(2) of the NDPS Act, the deceased Shankar was failed to rebut the claim that the properties listed in the freezing order were acquired from illicit sources. As per Section 68J of the NDPS Act, the Appellate Tribunal erred in not considering the facts of the case regarding the sources of the acquisition of the properties listed in the freezing order. The Tribunal also found fault with the Competent Authority's decision to treat Smt.Usha w/o.deceased as an associate of Shri Alexander Vyukhin @ Alex which was incorrect. https://www.mhc.tn.gov.in/judis 18 WP.No.6888 of 2018
19. It is settled law the crime cannot be abate on the death of the Criminal. It is relevant to cite the case of State by the Inspector of Police, B8 Variety Hall Road Police Station, Coimbatore Vs. Manoharan reported in 2014 SCC Online Mad 751, wherein it has been held as follows :-
“15. Incidentally, a very seminal question arises as to whether a Court can rely upon evidence against a dead person, especially, when he has not had the opportunity to defend himself. In other words, Can a final report be filed at all against a dead person and does not the accusation against a dead person abate? Unlike Civil law where no plaint can be filed against a dead person nor a decree be passed against a dead person, the Code of Criminal Procedure nowhere postulates abatement of accusation against a dead person for the crime committed by him vis-a-vis the victim. The crime cannot abate on the death of the criminal and that is why, time and again, it is stated that the Court under Section 190 Cr.P.C, takes https://www.mhc.tn.gov.in/judis 19 WP.No.6888 of 2018 cognizance of the offence and only thereafter, it proceeds to search for the offender. Section 256(2) Cr.P.C. empowers a Magistrate in a summons case to acquit the accused on the death of the complainant. Section 394 Cr.P.C. is the only section in the Code which provides for abatement of appeal on the death of the accused.
20. It is pertinent to mention that the forfeiture proceedings cannot be terminated as per the provisions of NDPS Act, since there was no acquittal or discharge of the late Shankar @ Sekar from the offences. Hence, Section 68Z is not applicable in this case. The Tribunal erred in holding of the proceedings under Chapter V-A should be closed, relying on the ratio expressed by the Hon'ble Supreme Court in the case of 2016 (7) SCC 797 (cited supra) which is not applicable to the present case. The Tribunal's decision without examining the merits of the case regarding the sources of acquisition of the properties covered in the freezing order, has the effect of abating the appeal proceedings under the ATFP Rules, 1989 contrary to the provisions of Sub Section (1) of Rule 12 of the ATFP Rules. We are inclined to interfere with the order of the https://www.mhc.tn.gov.in/judis 20 WP.No.6888 of 2018 Appellate Tribunal as there are merits in the writ petition and the writ petition is liable to be allowed.
21. In the result, the writ petition is allowed and the order of the 2nd respondent / Appellate Tribunal for Forfeited Property, New Delhi in FPA-ND-1/MDS/2012 dated 09.08.2017 is quashed. The order of the Competent Authority, Chennai dated 14.11.2011 in F.No.OCA/MDS/4/2011-NDPS is hereby confirmed. Consequently, connected miscellaneous petition is closed. No costs.
(S.M.S., J.) (M.J.R., J.)
23.01.2025.
tsh
Index : Yes / No
Internet : Yes / No
Neutral Citation: Yes / No
To
1.Appellate Tribunal for Forfeited Property Government of India, 4th Floor Lok Nayak Bhawan, Kahn Market, New Delhi – 110 003.
Rep by its Registrar.
https://www.mhc.tn.gov.in/judis 21 WP.No.6888 of 2018 S.M.SUBRAMANIAM.J, and M.JOTHIRAMAN.J, tsh Pre-Delivery Order in W.P.No.6888 of 2018 23.01.2025 https://www.mhc.tn.gov.in/judis 22