Income Tax Officer and Anr. v. V. Mohan and Anr.
Background
A person convicted under the Customs Act had certain properties held in the names of his nephew and niece (the respondents). The Competent Authority under SAFEMA issued forfeiture notices directly to these relatives, treating the properties as the convict's illegally acquired assets screened in their names, without separately serving a "primary" notice on the convict himself (who had in fact died before the notices were issued). The Madras High Court quashed the entire forfeiture action, holding that a primary notice to the convict was mandatory before proceeding against his relatives.
Decision Breakdown
The Supreme Court resolved a conflict between High Courts and held that Section 6 of SAFEMA does not make it mandatory to serve a primary notice on the convict when the property in question is actually held, and in the possession of, the relative in their own name: the notice obligation and burden of proof then falls on that relative directly. It reversed the Madras High Court's view and restored the writ petitions to the High Court's file, so that the respondents' other pending arguments (including inordinate delay in issuing the forfeiture notices) could be decided on their own merits, without disturbing the Court's ruling on the primary-notice question.
Lesson Learnt
Under anti-forfeiture laws like SAFEMA, authorities can proceed directly against a relative who holds a convict's allegedly ill-gotten property in their own name, without first having to serve the convict (or, as here, where the convict is deceased); but other defences such as unreasonable delay remain open to be argued separately.