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SC stamp on wealth seizure law

New Delhi, Jan. 22: The Supreme Court has upheld the validity of an anti-smuggling law that empowers the Centre to confiscate wealth amassed by individuals, companies and organisations through illegal means.

The government is fully justified in taking over such property in “larger public interest” to ensure that unscrupulous elements do not enjoy illegally acquired wealth, the apex court said, referring to the Smugglers and Foreign Exchange Manipulators Act, 1976 (SFEMA).

“If a subject acquires property by means which are not legally approved, (the) sovereign (the government) would be perfectly justified to deprive such persons of the enjoyment of such ill-gotten wealth,” a bench of Justices H.L. Gokhale and J. Chelameshwar said in its order yesterday.

The court stressed that there is “a public interest in ensuring that persons, who cannot establish that they have legitimate sources to acquire the assets held by them, do not enjoy such wealth”.

“Such a deprivation, in our opinion, would certainly be consistent with the requirement of Article 300A and 14 of the Constitution, which prevent the state from arbitrarily depriving a subject of his property. The act is immune from attack on the ground that it violates any of the rights guaranteed under Part III of the Constitution (fundamental rights),” the court said.

The order came as the court dismissed the appeal of a Calcutta resident, Biswanath Bhattacharya, against a high court verdict upholding the seizure of his properties by the authorities under SFEMA.

Bhattacharya had challenged the 2007 ruling of the high court’s division bench on the ground that the action was unconstitutional as he had already been detained under the act. He cited Article 20 of the Constitution that says no person could be subjected to punishment beyond the prescribed law.

Bhattacharya contended that as he had been kept under preventive detention for over a year, the impounding of his property was an added punishment and, therefore, unconstitutional.

According to Article 20, a person can only be convicted under laws in force at the time of the crime. Bhattacharya had been detained in December 1974 under another law, the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974.

He argued that his properties could not be taken away under SFEMA, which was passed two years later.

Bhattacharya was accused of collaborating with his brother, who was living in London at the time, and indulging in activities prejudicial to the conservation of foreign exchange.