On this historic day of 3rd of January, the Appellate Tribunal for Forfeited Property (ATFP) was constituted in 1977. It celebrated its silvery jubilee on 7th April, 2002. The Appellate Tribunal for Forfeited Property is one of the oldest and Earliest Tribunal of our country.
Appellate Tribunal for Forfeited Property situated at ‘A’ Wing, 4th Floor, Loknayak Bhawan, Khan Market, New Delhi dealt with two Acts, namely, (i) Smugglers and Foreign Exchange Manipulators (forfeited of property) Act, 1976 (SAFEMA); and (ii) Narcotic Drugs & Psychotropic Substances Act, 1985 (NDPSA).
Appellate Tribunal for PMLA (AT PMLA) was started working from the premises of ATFP and heard the appeals against the orders passed by Adjudicating Authority under PMLA from the year 2009.
The Present Appellate Tribunal under SAFEMA Act is constituted by merger of ATFP and AT PMLA to hear the appeals filed against the orders of Competent Authority under SAFEMA/NDPS Acts and against the order of Adjudicating Authority under PMLA Act.
The Appellate Tribunal comprises a Chairman (who is or has been a Judge of the High Court or Supreme Court) and four members. The other four members may be a person who is or has been a Judge of High Court or who is a member of an Indian Revenue Service and has held the post of Commissioner/Joint Secretary or equivalent post in Indian Legal Service, Income Tax, Indian Economy Service Indian Customs and Central Excise Service or Indian Audit and Account Service in that service for at least 3 years.
Appellate Tribunal is National Tribunal having its Headquarters at New Delhi. The Tribunal Adjudicates Appeals and allied petitions filed against the attachments/forfeitures order passed by the Competent Authorities under SAFEMA/NDPS Acts and orders of attachments/forfeitures of properties involved in Money Laundering by Adjudicating Authority under PMLA. It also Adjudicates appeals filed against the orders imposing fine passed by the Director-Financial Intelligence Unit India (FIU-India). The Benches of the Appellate Tribunal sit at New Delhi without any benches elsewhere in the country.
India, had earlier, enacted two legislations on forfeiture of the proceeds of crime, namely, (i) the Smugglers and Foreign Exchange Manipulators (forfeiture of property) Act, 1976 (SAFEMA); and NDPS Act, 1985 (NDPSA).
The Central Government took necessary measures to combat the of smugglers and Foreign Exchange Manipulators by enacting the Foreign Exchange Regulation Act, 1947 and the Imports and Exports (Control) Act, 1947. Thereafter came the Import (Control) Order, 1955 to place the policy of import on a stronger footing. In the year 1962, a new Customs law replaced the antiquate Customs Act, 1878. Yet, the menace of smuggling and foreign exchange violations continued unabated. The Parliament then came forward with the legislation of the Conservation of Foreign Exchange and Prevention of Smuggling Act, 1974 (COFEPOSA). It provided for preventive detention of these anti-social elements.
THE SMUGGLERS AND FOREIGN EXCHANGE MANIPULATORS ACT,1976:
In the year 1976, during the continuance of emergency, the Parliament enacted the Smugglers and Foreign Exchange Manipulators (forfeiture of property) Act, 1976 (SAFEMA). It replaced the Ordinance promulgated for the purpose and was brought into force from the dated of the Ordinance viz., 5th November, 1975. The SAFEMA applies to the persons convicted under the Sea Customs Act, 1878 / the Customs Act, 1962 the Foreign Exchange Regulations Act, 1947 (FERA) and the FERA, 1973 and to those detained under COFEPOSA, whose detention orders were neither revoked by the Government nor set aside or quashed by the courts of competent jurisdictions. This Act is directed towards forfeiture of illegally acquired properties of a person falling under clause (a) or clause (b) of section 2(2) that is of a convict or a detenue. The relatives and associates of such persons are brought in only for purpose of ensuring that the illegally acquired properties of the convict or detenue acquired or kept in their names do not escape the net of the 4 Act, section 2 specifies the persons to whom the Act applies. Sub-section (2) of section 2 mentions five categories of persons to whom the Act applies mainly being those who are convicted under the Customs and foreign Exchange laws or those against whom detention order under COFEPOSA has been issued but which has not been set aside or revoked in any or the situations set out in the four sub-clauses of proviso to section 2(2) (b). The Act also applies to the relatives and associates of persons referred to in Clauses (a) and (b) of sub-section (2) of section 2, who has illegally acquired property on behalf of a convict, or a detenue of COFEPOSA. There is yet another category of persons who are holders of any property which was at any time previously held by a person falling in Clause (a) or Clause (b) of sub-section (2) of section 2, unless such holders prove that they are transferees in good faith for adequate consideration.
NARCOTIC DRUGS & PSYCHOTROPIC SUBSTANCES ACT, 1985 (NDPSA):
Keeping the convention of 1988 adopted by the UN Plenipotentiary Conference provided for identification, tracing, freezing, seizure and confiscation of the properties etc., related to drug crimes. The Preamble of the said Convention addresses the problem in the following words:-
“Aware that illicit traffic generates larges financial profits and wealth enabling transnational criminal organisations to penetrate, contaminate and corrupt the structures of government, legitimate commercial financial business, and society at all its levels.
Determined to deprive persons engaged in illicit traffic of the proceeds of their criminal activities and thereby eliminate their main incentive for doing.”
The scope of SAFEMA is restricted in as much as (i) it does not cover the properties acquired by the persons from internal drug trafficking which does not fall within the meaning of smuggling under section 2(39) of the Customs Act, 1962; and (ii) it also does not lay down any measure for identification, tracing, freezing and seizure of such properties. Such a measure is necessary to prevent any likely concealment or transfer of properties which may result in frustrating any proceedings relating to forfeiture of such properties. Bearing in mind the restrictive application of the SAFEMA and also for implementing the provisions of the Convention of 1988, Chapter VA providing for tracing, identifying, seizure or freezing and forfeiture of illegally acquired property derived from drug crimes, was incorporated in the NDPS Act by section 19 of the Narcotic Drugs & Psychotropic Substances (Amendment) Act, 1988 (Act 2 of 1989). The provisions of Chapter VA of the NDPS Act are more or less analogous to the provisions of the SAFEMA. Chapter VA of the NDPS Act applies to the persons (i) who has been convicted under NDPS Act of ran offence punishable with imprisonment for a term of ten years or more; or (ii) who has been convicted of a similar offence by a competent court of criminal jurisdiction outside India; or (iii) to a person against whom detention order has been issued under the Prevention of Illicit Traffic in Narcotic drugs and Psychotropic Substances Act, 1988, or the Jammu and Kashmir Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic substances Act, 1988 and (iv) the associates or relatives of the above categories of persons and also to (v) the other holders of the illegally acquired properties.
PREVENTION OF MONEY LAUNDERING ACT, 2002
The Prevention of Money Laundering Act, 2002 (PMLA 2002) forms the core of the legal framework put in place by India to combat money laundering. PMLA 2002 and the Rules notified there under came into force with effect from July, 1, 2005. Director, FIU-IND and Director (Enforcement) have been conferred with exclusive and concurrent powers under relevant sections of the Act to implement the provisions of the Act.
The PMLA 2002 and rules notified thereunder impose obligation on banking companies, financial institutions and intermediaries to verify identity of clients, maintain records and furnish information to FIU-IND. PMLA 2002 defines money laundering offence and provides for the freezing, seizure and confiscation of the proceeds of crime.
Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money laundering.