SMUGGLERS AND FOREIGN EXCHANGE MANIPULATORS
(FORFEITURE OF PROPERTY) ACT
and
NARCOTICS DRUGS AND PSYCHOTROPIC SUBSTANCES
ACT
FORFEITURE UNDER
SAFEMA AND NDPS ACT
Introduction
• The SAFEM(FOP)A or SAFEMA provides for
forfeiture of assets of smugglers and foreign
exchange manipulators. It was introduced in 1976
as a sequel to the COFEPOSA of 1974.
• Similar law exists for forfeiting properties of drug
traffickers (the NDPS Act) and properties out of
money laundering (the PMLA).
• If right to property is sacrosanct, then why such
laws to deprive private property of individuals?
• Preamble to COFEPOSA and SAFEMA.
• Smuggling activities and FERA violations
• have deleterious effect on economy
• adversely affect the security of the state
• Forfeiture of property is considered as a
tool in the fight against threats to peace,
prosperity and security (the UNCTOC 2000)
Philosophy of Forfeiture
• Why forfeiture?
• It hits at the heart of the offence.
• It hits where it hurts more – financially.
• The principle is “No person has a right to the
profits of crime, but such money is that of the
State.”
• Evolution of law from “deprivation of liberty to
deprivation of property”.
• An imprisoned member of a criminal syndicate is
usually replaced and criminal activities continue.
• Forfeiture
• Is preventive, as economic profit is the rationale
• Deprives the ill-gotten wealth of offenders and associates
• Prevents infiltration of illegal profits and corruption into the legal
economy
• Takes away tools and instruments to commit future crimes
• Has a crippling effect – takes away the capital
• Provides evidence
• Provides intelligence input to target the top management
• Supports and supplements enforcement
• The objective is to make crime not profitable.
• Forfeiture can cripple the criminal operations by
taking out the capital.
• Enforcement provides disincentive and forfeiture
removes the incentive.
• Forfeiture is to tell – ‘crime does not pay’.
Offence
Criminal
prosecution
Forfeiture
proceedings
under
NDPS Act
Conviction
Assets
forfeited
Forfeiture – the framework
• “Illegally acquired properties” of specified
“persons” are liable for forfeiture under SAFEMA
(and also under NDPS Act) by the Competent
Authority.
• Such forfeiture action is immediate if the person
is detained under COFEPOSA.
• If COFEPOSA is not invoked, all such properties
can still be forfeited after a conviction is obtained
under the Customs Act or the FERA.
• Identification of properties is the sine qua non
• Investigating officers are in the best position to
do financial investigation.
• SAFEMA has role for enforcement authorities and
for Competent Authority.
• Need to be aware of the powers and
responsibilities you have under SAFEMA.
• We need to work together to be more effective in
achieving the goals of government.
• We have a common purpose or objective
• We have a joint statutory responsibility under
SAFEMA and also under Chapter V-A of NDPS Act.
• Mutual cooperation among implementing
agencies is essential to effectively combat the
offences.
Administration of Forfeiture
• The Competent Authority administers the
forfeiture provisions under the SAFEMA and also
Chapter V-A of the NDPS Act, 1985
• He is also called the “Administrator” under the
NDPS Act for administering the forfeited
properties.
• The Competent Authority and Administrator is of
the level of Joint Secretary to Government and is
appointed under the relevant Act.
Competent Authority
– Zonal Offices
COMPETENT AUTHORITY
SOUTH
NORTH
EAST
WEST
South Zone
•
•
•
•
•
•
Tamil Nadu
Kerala
Karnataka
Andhra Pradesh
Pondicherry
Lakshadweep
SOUTH ZONE
Competent Authority and
Administrator [SAFEM(FOP)A & NDPS Act],
‘UTSAV’, No.64/1, G.N. Chetty Road,
T. Nagar, CHENNAI 600 017.
Fax : 044 2815 4636
Phone: 044 2815 4636, 2815 0896, 2815 2826
Jurisdiction
• The jurisdiction of the Competent Authorities is on
the basis of the address/residence of the person
affected. If there is more than one address/place of
residence, the Competent Authority in whose
jurisdiction the investigating agency is located shall
have the jurisdiction.
Forfeiture – when?
SAFEMA [Sec 2]
• Preventive detention under COFEPOSA
• Conviction under Customs Act or FERA
NDPS Act [Sec 68A]
• Preventive detention under PITNDPS Act
• Conviction under NDPS Act
Two Routes to Forfeiture
Arrest
Preventive
Detention
Prosecution
Conviction
FORFEITURE
‘PERSON’ UNDER SAFEMA – Sec 2
‘PERSON’ UNDER NDPS ACT - Sec 68A
• Person convicted of an offence under NDPS Act,
punishable with imprisonment for 10 years or
more
• Person who has been convicted of a similar
offence by a competent Court outside India.
• Person against whom an arrest warrant has been
issued for an offence punishable with an
imprisonment for 10 years or more.
• Person against whom a detention order under
PITNDPS Act has been made.
• Relative or associate of such person
• Present holder of the property of convict or
detenue
• Proceedings valid even if the person convicted
or detained is absconding.
• No proceedings if the detention is set aside by the Advisory
Board or any competent court.
CHILDREN
SPOUSE
PARENTS
PARENTS
BROTHER
/SISTER
SPOUSE
SPOUSE
PERSON
CHILDREN
CHILDREN
ASSOCIATES/
TRUSTS/
OTHER PERSON
SPOUSE
BROTHER
/SISTER
Salient Features
• The Competent Authority has the powers of the
civil court under the Code of Civil Procedure
• Therefore, no civil court shall have jurisdiction in
respect of which the CA is empowered
• No injunction shall be granted by any court.
• Burden of proof is always on the Person Affected
in terms of Section 68J of NDPS Act.
• Findings under other laws not conclusive [68W].
• If any property is transferred by any mode after
the issue of a notice under the NDPS Act, such
transfer shall be deemed to be null and void
under the NDPS Act [68M].
FINE IN LIEU OF FORFEITURE
• Under NDPS Act a fine equal to the market value
of such part which has not been proved to be
legally acquired is permissible [68K], in lieu of
forfeiture.
SEIZURE OR FREEZING
• The investigating officer under Section 53 is
empowered u/s 68F(1) to seize/freeze assets, if he
has reason to believe that the property might be
transferred, concealed or disposed of. This is
essentially a provisional attachment.
• Reasonable evidence/belief is enough. Burden of proof is
on the person affected as per Section 68J.
• He should intimate the Competent Authority within 48
hours.
• The Competent Authority to confirm the seizure or
freezing order within 30 days u/s 68F(2).
• However, notice for forfeiture of the property can be
issued only after the person is convicted.
For quick forfeiture
• Invoke PITNDPS Act
• On arrest, go for freezing of properties of
PA / relatives / associates.
Procedure for forfeiture
Commencement of proceedings
• A notice under Section 68H of NDPS Act, is issued to
the Person Affected to show cause why the
properties mentioned should not be forfeited.
• 30 days time is given to the Person Affected to reply
to the notice.
• After considering the reply or oral submissions by
the Person Affected, an order forfeiting the property
[or dropping the proceedings] is passed by the
Competent Authority under Section 68-I. Act.
• Death of PA does not result in abatement of
proceedings - estate can be proceeded against.
• PA absconding - proceedings would continue
INFORMATION TO COMPETENT
AUTHORITY
• All officers of Central Government or
• State Government or
• Local Authority
are required to furnish information [68-S] in
relation to Person Affected which will be relevant
for the purposes of the NDPS Act.
ASSISTANCE TO COMPETENT AUTHORITY
•
•
•
•
•
•
•
•
Customs Department/Central Excise Department
Directorate of Revenue Intelligence
Income Tax
Enforcement Directorate
Narcotics Intelligence Bureau
Narcotics Control Bureau
Officers of Police
Other officers of Central / State Government as specified
are required to assist the Competent Authority
[68-T]
for identifying illegally acquired property and
maintenance of the forfeited property as well as disposal
of the property forfeited.
Time limit
• Under NDPS Act, any property acquired before a period
of 6 years from the date of arrest or a warrant or
authorisation of arrest has been issued or from the
date of order of detention against the Person cannot be
forfeited.
• However no time limit is prescribed for concluding
forfeiture as far as illegally acquired property is
concerned.
Appeal
• One tier appeal is provided
• Appeal lies with Appellate Tribunal for Forfeited
Property (ATFP)
• 45 days time period is allowed for the Person
Affected to file an appeal against an order passed by
the Competent Authority under Section 68F (2) or 68
I of the NDPS Act.
• ATFP has been empowered to condone a delay of 15
days only, if it is satisfied that the appellant was
prevented from filing the appeal for sufficient cause.
Powers to take possession
• The Competent Authority or any person duly
authorised by the Competent Authority may take
possession of any forfeited property u/s 68 U of
the NDPS Act within 30 days of the service of the
forfeiture order issued.
Safeguards
• Holder of the property, before issue of notice for
forfeiture, if he was a transferee in good faith for
adequate consideration is excluded.
• Vexatious action u/s 58 of NDPS is punishable.
Increased Effectiveness
• Increased inter-agency co-operation.
• Catch not just peripheral persons but go after the
network.
• Exchange information promptly.
• Reach out to all the illegally acquired assets.
Summary of the functions of the
Competent Authority
• The function of the Competent authority has a multiagency dimension.
• Action for forfeiture is initiated on information from
DRI, Customs, or NCB/NIB authorities.
• After forfeiture with the help of the sponsoring agency
or the district revenue authorities
maintenance/
disposal of the forfeited property is undertaken.
Parting on the subject
Request to this august body
• Notify liable cases to the Competent Authority
• PITNDPS detentions
• Conviction under Drug Laws violations
• Go for freezing of assets on arrest
• Identify the properties of the detenue
• Relatives and associates and also their properties and
inform