Delhi High CourtShri Zahid Parwez vs Union Of India & Ors. on 13 July, 2012Author:A.K.SikriBench:Rajiv Sahai Endlaw,A.K.Sikri*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                 LPA No.996/2011, CM No.570/2012, 21654/2011

                                      Reserved on: 15th March, 2012
%                                     Pronounced on: 13th July, 2012

      SHRI ZAHID PARWEZ                          .....APPELLANTS
                    through :               Mr.Saurav Kirpal with Mr.
                                            B.B. Bhatia, Mr.Navjot
                                            Kumar, Mr. Rajendra Sahu
                                            and Ms. Jyoti Taneja

                               VERSUS

      UNION OF INDIA & ORS.                 .....RESPONDENTSthrough:                Mr. A.S. Chandhiok, ASG
                                            with Mr.Ruchir Mishra, Mr.
                                            Ritesh Kumar, Mr. Piyush
                                            Sanghi and Mr. Yash
                                            Wardhan Tiwari for the
                                            UOI.

      CORAM :-
      HON'BLE THE ACTING CHIEF JUSTICE
      HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

A.K. SIKRI (Acting Chief Justice)1.    The appellant was issued a show cause notice dated 20.4.1994
      underSection 68H(1)of the Narcotic Drug and Psychotropic
      Substances Act, 1985 (hereinafter referred to as the „NDPS Act‟)
      stating that he was covered underSection 68A(2)(d)of the NDPS
      Act and had acquired certain properties specified in the said notice
      illegally within the meaning of the said provision ofSection
      68B(g)of the NDPS Act. After receiving the reply, the Competent
      Authority passed the orders dated 16.10.1997 holding that the
      properties were acquired illegally, which were forfeited by theLPA No.996/2011                                                 Page 1 of 23Central Government free from all encumbrances. The appeal filed
      by the appellant before the Competent Authority for the forfeited
      properties was dismissed. Challenging that order, the appellant
      preferred a Writ Petition underArticle 226of the Constitution,
      which was also dismissed vide impugned judgment dated
      21.10.2011.   It is against this order, the present Letters Patent
      Appeal is filed by the appellant under Clause 10 of the Letters
      Patent Charter.2.    The relevant facts leading to the passing of the aforesaid orders
      may be recapitulated at this stage. The appellant herein is brother
      of one Mohd. Azad @ Avid Parwiz son of Abdul Rouf (hereinafter
      referred to as the „Detenu‟). In the case of the detenu, orders dated
      26.7.1989 were passed by the Government of India underSection
      3(1)of the Prevention of Illicit Traffic in Narcotic Drugs and
      Psychotropic Substances Act, 1988(PITNDPS Act) with a view to
      prevent him from engaging in manufacture, possession, sale,
      purchase, transportation, warehousing, import and export inter-
      state of narcotic drugs. Pursuant thereto, the detenu was detained
      on 10.7.1991. The period of detention is three months. However,
      on 12.8.1991 the Government issued a declaration underSection
      10(1)of the PITNDPS Act to justify the detention beyond the
      initial period of three months. The detenu challenged the said
      detention order dated 26.7.1989 before the Calcutta High Court.
      The writ petition filed by him was dismissed upholding the
      detention. The detenu had approached the Supreme Court by way
      of Special Leave which was also dismissed.         The detenu also
      challenged the declaration made underSection 10(1)of the
      PITNDPS Act by filing a writ petition in this Court. This writLPA No.996/2011                                                 Page 2 of 23petition was allowed holding that though initial period of detention
      was justified, continuous detention beyond three months was
      vitiated.3.Under Chapter V-A of the NDPS Actthere can be forfeiture of
      property derived from or is used in illicit traffic.Section 68Aenlists the persons who would be covered by the said chapter. A
      person in respect of whom an order of detention has been made,
      inter alia, under thePITNDPS Actis obviously covered by the
      provisions of this Chapter. In addition, as perSection 68A(2)(d),
      any person who is relative of a person so detained, also gets
      covered. The appellant being a brother of the detenu would fall
      within the coverage net. He was issued show cause notice underSection 68H(1)of the NDPS Act on 20.4.1994.           It would be
      relevant here to reproduceSections 68H(1),68-I(1)and68J, which
      read as under:-"68H. Notice for forfeiture of property.-(1) If,
                  having regard to the value of the properties held
                  by any person to whom this Chapter applies,
                  either by himself or through any other person on
                  his behalf, his known source of income, earnings
                  or assets, and any other information or material
                  available to it as a result of a person from any
                  officer making an investigation undersection 68Eor otherwise, the competent authority has reason
                  to believe (the reasons for such belief to be
                  recorded in writing) that all or any of such
                  properties are illegally acquired properties, it may
                  serve a notice upon such person (hereinafter
                  referred to as the person affected) calling upon
                  him within a period of thirty days specified in the
                  notice to indicate the sources of his income,
                  earnings or assets, out of which or by means of
                  which he has acquired such property, the
                  evidence on which he relies and other relevant
                  information and particulars, and to show causeLPA No.996/2011                                                 Page 3 of 23why all or any of such properties, as the case may
                  be, should not be declared to be illegally acquired
                  properties and forfeited to the Central
                  Government under this Chapter.68-I Forfeiture of property in certain cases (1)
                  The competent authority may, after considering
                  the explanation, if any, to the show cause notice
                  issued undersection 68H, and the materials
                  available before it and after giving to the person
                  affected (and in a case where the person affected
                  holds any property specified in the notice through
                  any other person, to such other person also) a
                  reasonable opportunity of being heard, by order,
                  record a finding whether all or any of the
                  properties in question are illegally acquired
                  properties:Provided that if the person affected (and in a case
                  where the person affected holds any property
                  specified in the notice through any other person
                  such other person also) does not appear before the
                  competent authority or represent his case before it
                  within a period of thirty days specified in the
                  show cause notice, the competent authority may
                  proceed to record a finding under this sub-section
                  ex parte on the basis of evidence available before
                  it.68-J. Burden of Proof.-- In any proceedings
                  under this Chapter, the burden of proving that any
                  property specified in the notice served undersection 68His not illegally acquired property
                  shall be on the person affected."4.    In the notice dated 20.4.1994 it was stated that the appellant had
      acquired certain properties, particulars whereof were furnished
      therein, which were beyond known source of income and an
      opportunity to show cause was given to him as to why theseLPA No.996/2011                                                Page 4 of 23properties be not forfeited. The appellant gave his reply which was
      considered by the Competent Authority but was not found
      satisfactory. Order dated 16.10.1997 was passed underSection 68-I(3) of theNDPS Actwas passed. The appellant submitted his
      reply wherein the case set up by him was that he was running his
      own business under the name and style of "Nu-York" at Motiganj
      Bazar, Balasore. He was an income-tax assessee. The properties
      in question were actually purchased by his father Abdul Rouf in the
      year 1985 out of his father‟s own income and since then he was
      possessing and looking after these properties. He also stated that
      he has no connection with his brother Mohd. Azad (the detenu) and
      they did not live in the same house. He also stated that since the
      properties were purchased by his father, who died in 1989, source
      of money would be known to his mother and as such he would
      have to refer to the documents showing the knowledge of his
      mother regarding the source of the money. However, he did not
      produce any such documents. Reply was considered and order was
      passed, inter alia, stating that he could not give any evidence
      whatsoever in support of his contention and could not offer the
      source of money from which the aforesaid properties were
      purchased.   It was, thus, concluded that these were illegally
      acquired properties within the meaning ofSection 68Gof the
      NDPS Act and stood forfeited to the Central Government free from
      all encumbrances.5.    The appeal preferred by the appellant was dismissed by the
      Appellate Authority vide order dated 7.6.1999.      The Appellate
      Authority gave the following reasons while upholding the order of
      the Competent Authority:-LPA No.996/2011                                                Page 5 of 23"3. The source of funds for the above stated
                   properties is claimed to be from the father of the
                   appellant, who is stated to have expired in 1989.
                   However, there is no corroboratory evidence to
                   indicate that the father of the appellant was in any
                   position to have provided the money for the
                   investment in these properties or had actually
                   done so. The Competent Authority did not accept
                   this contention of the appellant as according to
                   him there was no documentary evidence to
                   support such a claim. The Competent Authority
                   has discussed this point in para 4 of his order.4.     It had been further claimed before the
                   Competent Authority that the appellant had been
                   running his own business under the name and
                   style of M/s. NU YORK at Motiganj Bazar,
                   Balasore. However, the Competent Authority has
                   mentioned in para 5 of his order that enquiries
                   made from the office of the Balasore
                   Municipality indicated that no trade licence was
                   issued by the municipality in the business name
                   and style of M/s. NU YORK. Keeping in view
                   the facts and circumstances of the case,
                   apparently the appellant must have been helping
                   his detenu brother in his illegal activities and was
                   either being rewarded by the detenu brother with
                   some of the funds earned from the drug trade or
                   the younger brother was being used as the benami
                   to make some investments by the elder brother. It
                   is not very material as to whether these properties
                   were being held by holding them in trust for his
                   detenue brother as in either case the money
                   invested in them appears to have come from
                   illegal activities of the detenu brother. Under the
                   circumstances the order of the Competent
                   Authority forfeiting all the three immovable
                   properties is upheld. The appeal is dismissed."6.     Before the learned Single Judge the appellant raised the following
      contentions:-LPA No.996/2011                                                  Page 6 of 23a) Show cause notice was incompetent as the appellant was not
          covered underChapter V-A of the NDPS Act. It was premised
          on the basis that as detention beyond three months was held to
          be illegal underSection 68Zof the NDPS Act came into play
          which provides that where the detention order of the detenu is
          set aside or withdrawn, properties seized or frozen under the
          said Chapter stand released.b) show cause notice issued to the appellant was without any
          inquiry or prima facie appreciation of any relevant material.7.    It was argued that there is absolutely no nexus established between
      the appellant‟s properties and the detenu or his income allegedly
      derived from his alleged dealings in narcotic drugs and
      psychotropic substances. It was argued that onus to establish this
      nexus was upon the respondents which they failed to discharge.8.    As far as first contention is concerned, the detailed submission of
      the appellant‟s counsel was that the effect of order dated 16.5.2002
      was considered by this Court inShahid Parvez v. Union of India
      & Others, 175 (2010) DLT 547. The said order dated 16.5.2002
      held that the detention for the initial period of three months was
      valid but for the remaining period it was invalid.InShahid Parvez(supra) the Court held that order dated 16.5.2002 had attained
      finality.   In that order, while the period of three months of
      detention was held valid, the detention order was itself held to be
      void ab initio, that is from the date it was issued. On this basis, it
      was argued that since the detention order itself was void ab initio,
      there could not have been any notice to the appellant as provisions
      ofChapter V-A of the NDPS Actdid not apply. The learned
      Single Judge has repelled this contention holding that the factsLPA No.996/2011                                                  Page 7 of 23clearly demonstrate that the detention order was not void ab initio.
      In fact, it was affirmed by the Calcutta High Court and even the
      Supreme Court had dismissed the SLP.            Further order dated
      16.5.2002 passed by this Court in WP(Crl.) No.351/1992 wherein
      continued detention was held to be illegal, in so far as initial
      detention order dated 26.7.1989 is concerned, same was held to be
      legal and valid.The learned Single Judge has taken pains to point
      out that inShahiz Parvez(supra) where the word „detention‟ is
      mentioned, in the 13th line of para 16, it appears to be a
      typographical error and the word should have been „declaration‟.9.    We entirely agree with the aforesaid conclusion of the learned
      Single Judge. The initial detention order dated 26.7.1989 was the
      subject-matter before the Calcutta High Court and was specifically
      affirmed. This order had attained finality. It is only a declaration
      underSection 10(1)regarding continuous detention, which was
      challenged in WP(Crl.) No.315/1992 in this Court and therefore,
      while holding the continued detention to be illegal, this Court could
      not have held initial detention also to be illegal, which was not
      even the subject-matter.     On the contrary, it was specifically
      obscured and concluded that initial period of detention was valid
      and the learned counsel for the detenu had even conceded this
      position as is clear from the following portion of the order in
      WP(Crl.) No.315/1992:-"It is agreed between the parties that this matter is
                   covered by the decision of this Court inAkhilesh
                   Kumar Tyagi Vs. Union of Indiareported in 1995
                   IV AD (Delhi) 107. The writ petition is allowed
                   in terms thereof. The initial period of detention
                   of three months is sustained.LPA No.996/2011                                                   Page 8 of 23..... ..... ..... ..... ...... I, therefore, hold that the
                   detention for a period of three months is valid and
                   continue detention is vitiated."10.In so far as second contention is concerned, namely, absence of
      nexus between the appellant‟s property and the detenue or his
      income allegedly derived from his alleged dealing in narcotic drug
      and psychotropic substances, the appellant had again relied upon
      the decision inShahid Parvez(supra). We would like to point out
      that Shahid Parvez was also the brother of the detenu and identical
      notice was issued to him also and order was passed forfeiting his
      property which order was confirmed by the Appellate Authority as
      well.However, writ petition filed by Shahid Parvez was allowed
      vide judgment dated 27.10.2010 passed in WP(C) No.4800/2008
      titledShahid Parvez v. Union of India & Ors., 175 (2010) DLT
      547, as noted above. In this judgment, the Court observed that
      there was no systematic inquiry or investigation by the Appellate
      Authority appreciating the passing of the order of forfeiture of
      properties of Shahid Parvez.       No effort was made by the
      Competent Authority to be prima facie satisfied that essential
      conditions existed to attract that provision. Initial burden was on
      the office of the Competent Authority to show that the properties in
      the name of Shahid Parvez were acquired by him through illegal
      earnings of his brother.11.   On the facts of this case the learned Single Judge opined that the
      appellant was a minor of about 12 years at the time when the
      properties in question were acquired in the year 1985. He did not
      have any independent source of income of his own at that time.
      The case set up by the appellant at the appellate stage was that hisLPA No.996/2011                                                 Page 9 of 23father acquired the properties but he failed to produce any material
      in support of this plea. The learned Single Judge observed that for
      the first time in the present writ petition the appellant asserted that
      his father was having liquor vends; he was an income-tax assessee
      and that he had rental income. This, according to the learned
      Single Judge, was an afterthought plea with an attempt to improve
      his case inasmuch as from the known source of the income of the
      appellant or the aforesaid properties were not established to have
      been acquired. The learned Single Judge alsoplaced reliance uponthe judgment of the Supreme Court inKesar Devi v. Union of
      India & Others, (2003) 7 SCC 427 and on that basis observed that:"18. The statutory framework appears to be founded
                  upon the fact that the details and particulars as to
                  how a particular property has been acquired by a
                  person are within his special knowledge. It is for
                  him to explain as to how he has acquired it, and the
                  source of the funds from which the property had
                  been acquired."12.   Mr. Kirpal, learned counsel appearing for the appellant, expressed
      serious reservation on the aforesaid approach taken in the
      impugned order. His first submission was that in case the learned
      Single Judge wanted to record a discordant note, in so far as the
      ratio inShahid Parvez(supra) is concerned, the appropriate
      course of action was to refer the matter for a decision by a larger
      Bench. It was also contended that even otherwise the contention of
      the appellant was not appreciated in the right perspective. Mr.
      Kirpal reiterated the submission with much emphasis that the
      notice of forfeiture of property underSection 68Hof the NDPS Act
      could be served only if the Competent Authority had "reasons to

LPA No.996/2011                                                   Page 10 of23believe (the reasons for such belief to be recorded in writing)" that
      all or any such properties are illegally acquired properties. His
      submission was that there could be a forfeiture of the properties
      only if nexus was established between these properties and the
      purported illegal earnings of the detenu from dealing in narcotic
      drugs and psychotropic substances. His submission was that this
      plea should have been reflected in the show cause notice itself and
      when it was not there, the very show cause notice was illegally and
      proceedings generated as a consequence thereof were also illegal
      and vitiated.    In support of his submission he relied upon the
      following two judgments of the Supreme Court:-1. P.P. Abdulla and Another, (2007) 2 SCC 5102.Aslam Mohammad Merchant v. Competent
                     Authority and Others(2008) 14 SCC 18613.    Mr. A.S. Chandhiok, learned Additional Solicitor General, refuted
      the aforesaid contention of the appellant‟s counsel. It was his
      submission that entirely a new case was projected in the writ
      petition and the appellant was precluded from setting up a new
      case. He argued that after the show cause notice was issued to the
      appellant vide letter dated 1.6.1994, he requested for a copy of the
      reasons recorded for initiating the proceedings underSection
      68H(1)of the NDPS Act. These reasons were supplied to him by
      letter dated 8.2.1996 and were duly received by the appellant. He
      further pointed out that in so far as stand of the appellant to the
      show cause notice is concerned, he initially submitted that he was
      running his own business under the name and style of „NU-York‟
      and was an income-tax assessee. Thereafter, he stated that the
LPA No.996/2011                                                 Page 11 of23properties in question were purchased by his father out of his
      father‟s own funds and he had no connection with the detenu.
      Even when he had asked for opportunity to provide documents to
      show that properties were purchased by his father out of his income
      he had failed to do so. Mr. Chandhiok, thus, argued that in view of
      such an explanation, the matter was to be examined from this angle
      only, which was examined and no fault is found in the orders of the
      Competent Authority or the Appellate Authority.             He also
      submitted that the appellant was changing stand as he initially
      claimed that the properties were acquired by his father but before
      the Appellate Authority his submission was that these were
      acquired properties of the appellant.14.   Mr. Chandhiok also referred to the reasons given by the learned
      Single Judge in the impugned judgment and made his endeavour to
      justify the same.15.   We have considered the submission of both the sides. We would
      first like to deal with the contention of the learned counsel for the
      appellant that the learned Single Judge could not have held that the
      judgment of another Single Judge inShahid Parvez(supra) was
      per incuriam and the only course open was to refer the matter to
      the larger Bench.We find the following comments of the learned
      Single Judge in the impugned judgment pertaining toShahid
      Parvez(supra):"15. On the other hand, the principle of law
                   contained in the aforesaid observations made by
                   this Court inShahid Parvez(supra), with due
                   respect, appears to be per incuriam. I may refer
                   to the provision contained inSection 68Jof the
                   NDPS Act which provides that "in any
                   proceedings under this Chapter, the burden of
LPA No.996/2011                                                 Page 12 of23proving that any property underSection 68His
                   not illegally acquired property shall be on the
                   person affected." Therefore, the observation of
                   the learned Judge that the onus would be on the
                   respondent authorities is in the teeth of the said
                   statutory provision.I may note thatSection 68Jhas not been noticed by the learned Judge inShahid Parvez(supra)."16.   We are of the opinion that it would have been more appropriate for
      the learned Single Judge to refer the matter to Division Bench in
      the case of difference of opinion. Be as it may, since the matter is
      now before the Division Bench we proceed to determine as to
      which opinion is correct in law and therefore, advert ourselves to
      the central issue raised before us. It was agreed to by the learned
      counsel for the parties as well.17.   Submission of the learned counsel for the appellant questioning the
      validity of show cause notice and resultant proceedings is
      precluded of P.P. Abdulla and Another (supra) andAslam
      Mohammad Merchant v. Competent Authority and Others(supra).18.    It is pertinent here to reproduce paras 4 to 7 of the judgment in the
      case of P.P. Abdulla and Another (supra):"4. .....The appellant challenged Exts.P5 and
                   P6 orders in O.P. No. 27488/2000 which was
                   allowed by the learned Single Judge of the High
                   Court relying on the decision of the Supreme
                   Court in Fatima Mohd. Amina (dead) through
                   LRs. v. Union of India and Anr., (2003) 7 SCC
                   436, holding that since there is no allegation
                   regarding the existence of any link or nexus
                   between the property sought to be forfeited and
                   the illegally acquired money of the detenu under
LPA No.996/2011                                                  Page 13 of23the Act, the orders of forfeiture could not be
                  maintained.5.    Against the aforesaid judgment of the
                  learned Single Judge the competent authority and
                  Union of India filed an appeal before a Division
                  Bench of the High Court which was allowed by
                  the impugned judgment, hence this appeal.6.     Learned Counsel for the appellant has
                  invited our attention toSection 6(1)of the Act
                  which states :"6(1) If, having regard to the value of the
                        properties held by any person to whom
                        this Act applies, either by himself or
                        through any other person on his behalf,
                        his known sources of income, earnings or
                        assets, and any other information or
                        material available to it as a result of
                        action    taken    underSection 18or
                        otherwise, the competent authority has
                        reason to believe (the reasons for such
                        belief to be recorded in writing) that all
                        or any of such properties are illegally
                        acquired properties, it may serve a notice
                        upon such person (hereinafter referred to
                        as the person affected) calling upon him
                        within such time as may be specified in
                        the notice which shall not be ordinarily
                        less than thirty days, to indicate the
                        sources of his income, earnings or assets,
                        out of which or by means of which he has
                        acquired such property, the evidence on
                        which he relies and other relevant
                        information and particulars, and to show
                        cause why all or any of such properties,
                        as the case may be, should not be
                        declared to be illegally acquired
                        properties and forfeited to the Central
                        Government under this Act." (emphasis
                        supplied)
LPA No.996/2011                                                Page 14 of237. Learned Counsel submitted that it has been
                   expressly stated inSection 6(1)that the reason to
                   believe of the competent authority must be
                   recorded in writing. In the counter-affidavit it has
                   also been stated in paragraph 8 that the reasons in
                   the notice underSection 6(1)were recorded in
                   writing. In our opinion this is not sufficient.
                   Whenever the statute required reasons to be
                   recorded in writing, then in our opinion it is
                   incumbent on the respondents to produce the said
                   reasons before the Court so that the same can be
                   scrutinized in order to verify whether they are
                   relevant and germane or not. This can be done
                   either by annexing the copy of the reasons along
                   with the counter- affidavit or by quoting the
                   reasons somewhere in the counter-affidavit.
                   Alternatively, if the notice itself contains the
                   reason of belief, that notice can be annexed to the
                   counter-affidavit or quoted in it. However, all that
                   has not been done in this case."19.   It would be worthwhile to reproduce paras 30, 31, 34, 40 and 41
      from the judgment in the case ofAslam Mohammad Merchant v.
      Competent Authority and Others(supra):"30.     Before, however, the actual order of
                  forfeiture of such illegally acquired property is
                  passed, issuance of a notice to show cause is
                  essential so as to fulfill the requirements of natural
                  justice.Such a notice is to be issued by the Authority
                  having regard to:(i) The value of the property held by the person
                  concerned,(ii) His known source of income, earning or assets,


LPA No.996/2011                                                   Page 15 of23(iii) Any other information or material made
                  available as a result of a report from any officer
                  making an investigation underSection 68Eof the
                  Act or otherwise.When the aforementioned conditions are satisfied,
                  the competent authority would be entitled to issue a
                  show cause notice, if he has reason to believe,
                  wherefore reasons are to be recorded in writing that
                  the properties are illegally acquired properties.31.      Once the notice to show cause is found to
                  be satisfying the statutory requirements which are
                  condition precedent therefor, a valid proceeding
                  can be said to have been initiated for forfeiture of
                  the property. Only in a case where a valid
                  proceeding has been initiated, the burden of proof
                  that any property specified in the notice is not
                  illegally acquired property, would be on the
                  `person' affected.xxxxx         xxxxx        xxxxx34.     Analysis of the aforementioned provisions
                  clearly establish that a link must be found between
                  the property sought to be forfeited and the income
                  or assets or properties which were illegally
                  acquired by the person concerned.xxxxx         xxxxx        xxxxx40.     Both the statutory elements, namely,
                  `reason to believe' and `recording of reasons' must
                  be premised on the materials produced before him.
                  Such materials must have been gathered during the
                  investigation carried out in terms ofSection 68Eor
                  otherwise. Indisputably therefore, he must have
                  some materials before him. If no such material had
                  been placed before him, he cannot initiate a
                  proceeding. He cannot issue a show cause notice
                  on his own ipse dixit. A roving enquiry is not
LPA No.996/2011                                                 Page 16 of23contemplated under the said Act as properties
                  sought to be forfeited must have a direct nexus
                  with the properties illegally acquired.41.     It is now a trite law that whenever a statute
                  provides for `reason to believe', either the reasons
                  should appear on the face of the notice or they
                  must be available on the materials which had been
                  placed before him."20.   It is mentioned that as per these judgments the requirements of
      valid show cause notice are: (i) „reasons to believe‟ of the
      Competent Authority must be recorded in writing; (ii) on that basis
      show cause notices to be issued to the concerned persons and in
      this notice, apart from other essential requirements to be fulfilled,
      two statutory requirements, namely, „reason to believe‟ and
      „recording of reasons‟ must be premised on the basis of material
      produced by the Competent Authority.         This material must be
      gathered during the investigation carried out in terms ofSection
      68Eof the NDPS Act or otherwise. If no such material has been
      placed before the Competent Authority, it cannot initiate the
      proceedings; and (iii) this show cause notice should satisfy the
      statutory requirements, which are condition precedent therefor and
      only then it can be held that a valid proceedings have been initiated
      for forfeiture of the property. Link must be found between the
      properties sought to be forfeited and the income or assets or
      properties, which were illegally acquired by the persons concerned.
      Once statutory conditions are satisfied and it is found that valid
      proceedings had been initiated, the burden of proof that any
      property specified in the notice is not illegally acquired property,
      would be on the „person affected‟.LPA No.996/2011                                                  Page 17 of2321.   It would be pertinent to point out at this stage that in the impugned
      judgment the learned Single Judge has referred to and relied upon
      two Judge Bench judgment of the Supreme Court inKesar Devi v.
      Union of India & Others(supra) wherein the Supreme Court has
      opined that no nexus or link between the money or the debt
      sought to be forfeited is required to be established under the
      Scheme of the Act.However, inAslam Mohammad Merchant v.
      Competent Authority and Others(supra) the Supreme Court
      expressed his inability to agree with the said opinion held inKesar
      Devi v. Union of India & Others(supra) in the following words:-"45. .....We, with utmost respect to the learned
                   Judges express our inability to agree to the said
                   observations. The necessity of establishing link or
                   nexus in our opinion is writ large on the face of
                   the statutory provision as would appear from the
                   definition of `illegally acquired property' as also
                   that of 'property'. The purport and object for
                   which the Act was enacted point out to the same
                   effect.46.Fatima Mohd. Amin(supra) was followed
                   by      a      Bench       of   this     Court
                   inP.P.Abdulla v. Competent Authority:(2007) 2
                   SCC 510, wherein it was observed: (P.P. Adbullacase, SCC p. 512, paras 7-8)

                         "7. Learned Counsel submitted that it
                         has     been     expressly     stated    inSection 6(1)that the reason to believe of
                         the competent authority must be recorded
                         in writing. In the counter-affidavit it has
                         also been stated in para 8 that the reasons
                         in the notice underSection 6(1)were
                         recorded in writing. In our opinion this is
LPA No.996/2011                                                 Page 18 of23not sufficient. Whenever the statute
                        requires reasons to be recorded in
                        writing, then in our opinion it is
                        incumbent on the respondents to produce
                        the said reasons before the court so that
                        the same can be scrutinised in order to
                        verify whether they are relevant and
                        germane or not. This can be done either
                        by annexing the copy of the reasons
                        along with the counter-affidavit or by
                        quoting the reasons somewhere in the
                        counter-affidavit. Alternatively, if the
                        notice itself contains the reason of belief,
                        that notice can be annexed to the counter-
                        affidavit or quoted in it. However, all that
                        has not been done in this case.8.     It must be stated that an order of
                        confiscation is a very stringent order and
                        hence a provision for confiscation has to
                        be construed strictly, and the statute must
                        be strictly complied with, otherwise the
                        order becomes illegal."It was also observed: (SCC p. 512, para 10)

                        "10. In the present case, in the notice
                        dated 15-3-1988 issued to the appellant
                        underSection 6(1)of the Act (copy of
                        which is annexed as Annexure P-1 to this
                        appeal), it has not been alleged therein
                        that there is any such link or nexus
                        between the property sought to be
                        forfeited and the alleged illegally
                        acquired money of the appellant.47. In the final order, the rule of evidence as
                  envisaged underSection 68-Iread withSection 68Jof the Act must be applied. A person
                  affected would be called upon to discharge his
                  burden provided a link or nexus is traced between
LPA No.996/2011                                                 Page 19 of23the holder of the property proceeded against and
                   an illegal activity of the detenu. Such a formation
                   of belief is essential."22.   We are of the opinion that what is provided in para 47 reflects the
      principle of lawlaid down bythe Apex Court. Reading this, it can
      be concluded that before issuing show cause notice some
      information or material has to be placed before the Competent
      Authority gathered during the investigation carried out in terms ofSection 68Eor otherwise.      On the basis of this material the
      Competent Authority has to record his satisfaction to the effect that
      he has reason to believe that the property sought to be forfeited has
      link with the income or assets or properties which were illegally
      acquired by the persons concerned. The Competent Authority is
      required to record his reasons on the basis of that belief which
      reason should be either in the show cause notice itself or are
      recorded in the file. Once this exercise is done and reflected either
      in the notice or from record then the statutory requirement of show
      cause notice as perSection 68Hof the NDPS Act shall be treated
      as satisfied. In that event the burden of proof would be on the
      notice to prove that any property specified in the notice served
      underSection 68His not illegally acquired property.Section 68His enacted keeping in mind the fact that the details and particulars
      as to how a particular property has been acquired by a person are
      within his special knowledge and it is for him to explain the source
      thereof.23.   We find that in the instant case the learned Single Judge has, on the
      basis ofSection 68Jof the NDPS Act, jumped to the second aspect
      holding that the appellant could not discharge the burden as to how
LPA No.996/2011                                                 Page 20 of23he acquired the property. First aspect, namely, validity ofSection
      68Hof the Act, i.e., whether it fulfilled the statutory requirement as
      explained inP.P. Abdulla and Another(supra) andAslam
      Mohammad Merchant v. Competent Authority and Others(supra) has not been gone into and in fact, two issues are mutually
      exclusive and are required to be examined independent of each
      other.24.   Be as it may, Mr. Chandhiok may be correct in his submission that
      this argument about the validity of the show cause notice was
      raised for the first time in the writ petition. The validity was not
      questioned before the adjudicating authority or the appellate
      authority and defence was given only on the sound aspects, i.e., on
      merits trying to explain the source of funds wherefrom the
      properties were purchased. Probably, that is the reason that the
      learned Single Judge has dealt with this aspect only. To examine
      the validity of show cause notice, we called for the records. We
      may point out that the „reasons to believe‟ supplied to the appellant
      have not been placed on the record of this case.            We were,
      therefore, in a disadvantageous position as in the absence thereof it
      could not be found as to whether necessary requirement for
      issuance of the show cause notice are fulfilled or not. For this
      reason, we directed production of the original records, including
      „reasons to believe‟. We have examined those records.25.   Record shows that the Inspector, Narcotics Control Bureau,
      Eastern Zonal Unit, Calcutta had frozen the properties in question
      by orders dated 15.7.1993 underSection 68F(1)of the NDPS Act
      and this order was confirmed by the Competent Authority, Calcutta
      on 28.7.1993 underSection 68F(2)of the Act. Thereafter, show
LPA No.996/2011                                                   Page 21 of23cause notice was issued to the appellant on 20.4.1994, inter alia,
      stating that on the basis of the relevant information and/or relevant
      materials available to the Competent Authority, he had reason to
      believe that properties in question held by the appellant were
      illegally acquired properties within the meaning ofSection 68B(g)of the NDPS Act. The „reasons to believe‟, which were recorded
      and supplied to the appellant start with the narration regarding
      detention order passed against the brother of the appellant underPITNDPS Act, 1988and being a brother the appellant was a person
      covered underSection 68A(2)(d)of the NDPS Act. Thereafter,
      description of the three properties is given and it is mentioned that
      since the source of fund of the said properties could not be verified,
      the properties are taken as wholly and illegally acquired properties
      underSection 68B(g)of the NDPS Act and therefore, it is stated
      that for this reason notice be issued to the appellant to indicate
      source of his income, earnings or assets out of which or by means
      of which he had acquired such properties.26.   From the narration in „reasons to believe‟ it becomes clear that the
      properties in question ostensibly in the name of the appellant were
      sought to be connected with his brother by specifically mentioning
      about his detention. Though it is not stated in so many words that
      the properties in question were acquired from the illegal income of
      the detenu, such a link can clearly be inferred and is discernible
      from the entire reading of the „reasons to believe‟. Record shows
      that the material gathered during investigation carried out in terms
      ofSection 68Eof the NDPS Act was produced before the
      Competent Authority. Investigation revealed that the source of
      fund of these properties could not be verified even when the
LPA No.996/2011                                                  Page 22 of23appellant was an income-tax assessee. On that basis, link was
      inferred with the detenu and the properties were taken wholly and
      illegally acquired properties underSection 68B(g)of the NDPS
      Act. On the basis of this material, we are of the opinion that
      statutory conditions laid down under the Act stand satisfied and the
      burden is shifted upon the appellant to show the source of the said
      properties and prove that they were not illegally acquired.27.   In so far as discharge of burden by the appellant as contemplated
      underSection 68Jis concerned, from the reading of the orders of
      all the authorities below, including the learned Single Judge it is
      clear that he has miserably failed to do so and in fact, no attempt
      was made even before us to show the source of income from which
      the properties were purchased as there is no explanation worth the
      name coming on record from where the funds for purchase of these
      properties were arranged.28.   For the aforesaid reasons, we hold that the orders of the authorities
      below do not call for any interference. We accordingly dismiss the
      appeal with costs.ACTING CHIEF JUSTICE



                                            (RAJIV SAHAI ENDLAW)
                                                      JUDGE

July 13, 2012
HP



LPA No.996/2011                                                 Page 23 of23